CASE NUMBER: 551
CASE MNEMONIC : BIGMAC
CASE NAME: Teamsters Test NAFTA's Teeth with the Burger Industry
CASE NUMBER: 551
CASE MNEMONIC : BIGMAC
CASE NAME: Teamsters Test NAFTA's Teeth with the Burger Industry
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Beyond this victory, two major defeats decided the fate of the unions’ drive to win McDonald’s restaurants. The first defeat came on February 27, 1998, and is the central issue behind the submission to the NAO. This case concerning the franchise in St. Hubert, Quebec, involved the owner shutting down his restaurant during the certification process claiming it was no longer profitable (Hamstra 3, 1998). The second involved a defeat of a different sort. In Montreal’s Mont Royal District, the Teamsters filed for accreditation with the provincial Labor Department in 1997, after the majority of workers at a McDonald’s there signed accreditation cards to join the Teamsters. The process of accreditation under Quebec’s Labor Code delayed public hearings on the unionization until April 1998. After months of sporadic hearings the two sides remained far from a settlement until, in January 1999, the general commissioner for the Labor Department, Serge Lalande called for a straight vote by the employees of the restaurant for or against unionization. Due to the notoriously high employee turnover rate in the fast food industry, few of the employees who had signed accreditation cards in 1997 remained employed at the Plateau restaurant. Consequently, the vote defeated the union drive on February 22, 1999 (King A6, 1998). In both cases the major factor in the defeat of the unions was the long delays caused by the certification process under Quebec Labor Code. While it took a mere 28 days to win accreditation for the restaurant in British Colombia, the two Quebec failures encompassed nearly a year and 15 months respectively.
The Teamsters have since abandoned a $100,000 campaign to unionize workers at McDonald’s restaurants throughout Canada. This national battle against McDonald’s began after the defeat at the St. Hubert restaurant and ended with the defeat at the Plateau shop. Henri Masse, president of the Quebec Federation of Labor, stated at a press conference announcing the end of the campaign that any such campaign would not begin again in Quebec until the provincial labor laws are changed to allow for faster certification of workers who sign union cards (“Teamsters…” A4, 1999).
Dispute Transformation
What began as a battle between international giants on a local, store
by store level, has dominoed into a national concern for two nations.
Now that the complaint has been brought to and accepted by the U.S. NAO
it holds the responsibility to investigate the claim that the provincial
labor laws of Quebec are in violation of the NAALC.
Annex 1 of the NAALC lists eleven basic labor rights that the signing parties agree to promote the first of which is the freedom of association and protection of the right to organize (North American... 1993). According to a notice in the Federal Register, those who brought the complaint against the government of Quebec allege that the long certification process which occurs after a majority of workers have agreed to forming a union is a hindrance to the formation of a union. Also, they charge that the absence of recourse for individual workers who lost their jobs when the plant closed due to union activity violates the terms of the NAALC (Federal Register 71162, 1998).
Gingivitis and the NAALC Process
Now that it is in the hands of the U.S. NAO, an understanding of the
process and possible force behind the NAALC is vital to understanding the
future of the case. When the NAALC appeared as a linked side agreement
with NAFTA in 1993, the press and pundits on all sides of the spectrum
described it with one simple word, toothless. Critics at the time
had three main problems with the treaty.
The first of these issues was that the agreement failed to establish trilateral common norms for labor code. Rather than infringe on the sovereignty of the nations the negotiators chose to pursue a course of “effective enforcement” of existing labor code. Detractors of the agreement felt that it such a plan leaves substandard practices in place rather than pulling them up to a higher standard (Compa 45, 1997).
The second such
complaint revolved around the creation of a complicated bureaucracy in
which each country’s NAO would have a variety of duties to split with a
Commission for Labor Cooperation and a trinational secretariat.
Through this system litigants must file with another nation to bring a
case against theirs through a maze of red-tape often taking a minimum of
several months and as much as a few years. Also, this red tape gauntlet
often must be traversed in another language. Since submissions require
a complaint against another government over lack of enforcement, the bureaucracy
merely spends its time investigating other bureaucrats and not labor rights
offenders (Millman A19, 1997).
Finally, and possibly most importantly for this case, critics cited the division of NAALC’s eleven basic labor principles into three tiers based on treatment. Receiving the highest level of importance in the system are the issues of child labor, minimum wage, and occupational health and safety. A complaint lodged under one of these issues may incur review of the problem, a second stage of evaluation by a committee of experts, and a final stage of arbitration between the states involved with possible sanctions or fines for non-cooperation. The labor issues of forced labor, nondiscrimination, equal pay for men and women, worker's compensation and protection of migrant workers encompass the second tier and can thus receive the first two stages of review and evaluation. Finally, freedom of association and the right to organize, the right to bargain collectively and the right to strike all fall within the tier that garners the least reaction from the NAALC. In cases involving these rights the only action which may be taken once a submission has been accepted is a review by the NAO (Compa 46, 1997).
Under cases such as the one the teamsters have brought to the U.S.
NAO a certain procedure is followed to complete the submission review process.
After the case has been accepted by the NAO the Secretary of the NAO, its
chief officer, investigates the allegations. After investigation
he conducts a noticed public hearing at which the Secretary of another
party’s NAO may be a participant. And, finally, within 120 days of
the submission issues a public report which includes findings and recommendations.
The point of this process is to gather information so that the NAO can
disseminate it findings concerning the Party’s effective enforcement of
its labor law. If the Secretary feels that the nation in question
has not remedied the situation, he or she may recommend to the Secretary
of Labor that he make an attempt to resolve the situation through consultation
with his counterpart in said country (Englehart 353,
1997).
At this point in the process in a case such as the one at hand, there is nothing more that the NAO or government of the United States can do to change state of labor in the other nation. Mickey Kantor, U.S. Trade Representative at the time, explained why the NAALC lacks this particular tooth. He stated that allowing collective rights to be enforced by trade sanctions or fines would allow parties in collective bargaining to hold the prospect of NAALC intervention as a bargaining chip. He also showed that the NAALC offers the disincentive to labor law violation of negative publicity generated through the procedure (Englehart 385, 1997).
The Sovereign Nation and Province
Despite Kantor’s, assurance that the public nature of the procedure
will create a mechanism for positive change in the labor practices of the
United States and its neighbors, it is clear that the conclusion of this
case will not ride to shore on a sea of public embarrassment on the part
of Quebec over criticism from the United States. One of the major
difficulties with the negotiation of the NAALC was the fact that both Mexico
and Canada’s federations of states allow for the states and provinces to
set labor code, unlike the United States where labor code is primarily
a federal responsibility. Thus, those two nations would have to work
within a varying set of laws to appease the NAALC. Also, this fact
complicates the complaint process because submissions are filed against
federal governments not provinces (Compa 47, 1997).
In addition to the difficulty of holding provincial statute to international treaty, the case brought to the U.S. NAO on behalf of the workers of Quebec has another major pair of obstacles in its path to resolution, Canada and Quebec. During negotiations over the structure of the NAALC, Canada refused to allow the United States and Mexico any power to impose sanctions or fines on it through the NAALC process. The people of Canada began to harbor a great deal of resentment for the United States after the passing of the U.S.-Canada Free Trade Agreement in 1989. From this point on the Canadians found themselves embroiled in many disputes against the United States often viewing this as bullying on the part of its more powerful neighbor to the south. Of Canada’s reluctance to allow economic penalties to be levied against it, Gordon Ritchie, Canada’s former trade negotiator stated that, “The worry was that if you give the Americans a club, sooner or later they’ll get around to hitting you with it.” (Clayton 3, 1993)
Compounding general Canadian sour feelings toward the United States, is the Province of Quebec’s utter disdain for the United States in addition to its own nation. Mostly descendants of the French and still French speaking, the province of Quebec often finds its culture at odds with that of the United States or the rest of Canada. Recently, the major city in the province, Montreal, decided with nearly no opposition that it was no longer interested in hosting a Major League Baseball team (Pearlstein A1, 1999). There will obviously be considerable difficulty convincing a province which has held votes on secession from the Canadian Federation that it needs to comply with a treaty signed by the federal government or listen to criticism from the United States.
Conclusion
The lack of enforceability built into the NAALC, though for understandable
reasons, and the lack of enthusiasm in Canada and especially Quebec for
cooperating with the United States ensure that the case recently submitted
to the U.S. NAO will have no direct effect on the labor code of that province.
The NAALC’s exclusion of collective rights from possible arbitration and
sanctions allows for the governments of Canada and Quebec to ignore the
investigation of the U.S. NAO. Also, the poor cultural relationship
between the nations and the province encourages even further disregard
for what the investigation might conclude.
b. Geographic Site: NORTHERN NORTH AMERICA
c. Geographic Impact: CANADA
b. Indirectly Related to Product: N/A
c. Not Related to Product: N/A
d. Related to Process: N/A
Type: N/A
Diversity: N/A
Clayton, Mark. "Canada’s Premier Gets a Boost
from the U.S. yielding on NAFTA." Christian
Science Monitor
16 Aug. 1993: 3.
Compa, Lance. "Another Look at NAFTA." Dissent Winter 1997: 45-48.
Englehart, Frederick. "Withered Giants: Mexican
and U.S. Organized Labor and the North
American Agreement on Labor Cooperation." Case
Western Reserve Journal of International Law Spring
1997: 323-388.
Federal Register. 23 Dec. 1998: 71162.
Hamstra, Mark. "Unions Seek Momentum from Canadian
McDonald’s Certification." Nation’s
Restaurant News
7 Sept. 1998: 36.
King, Mike. "Flippin’ Union?: Labour Commissioner
Orders Vote to Settle Accreditation at McDonald’s." The
Gazette
(Montreal) 8 Jan. 1999: A6.
Millman, Joel. "NAFTA’s Do-Gooder Side Deals Disappoint:
Efforts to Protect Labor, Environment Lack
Teeth." Wall Street
Journal 15 Oct. 1997: A19.
Norris, Alexander. "Employees Reject Union: Managers
Played Dirty, Teamsters Boss Charges." The
Gazette
(Montreal)
23 Feb. 1999: A3.
North American Agreement on Labor Cooperation.
Pearlstein, Steve. "Montreal Expos Out at Home." The Washington Post 25 March 1999: A1.
"Teamsters Drop Drive after McDonald’s Vote."
The
Gazette (Montreal) 24 Feb. 1999: A4. 