by Bruce Raynor and Edgar Romney

Dear Sisters and Brother in the Labor Movement,

The failure of the UNITE HERE merger and the current dispute between the remaining leaders of UNITE HERE and Workers United has been ugly and not helpful to the labor movement at large.

Like most of you, we are concerned with issues such as passing the Employee Free Choice Act with majority sign-up intact, reforming our national healthcare plan, and of course, helping all our members and local leaders deal with employers who are exploiting this economic crisis to stall negotiations, shed workers and cut benefits.

In the middle of this, we are also fighting to preserve the legacy and assets built up by generations of garment workers whose predecessor unions made us what we are today.

For weeks now, John Wilhelm has insinuated that we are involved in a concerted attempt to steal the assets of UNITE HERE. He’s made the allegation in the press, in e-mails to all of you and in the courts. He has even had the audacity to state, “We are committed to ensuring that assets that have been built by generations of hardworking members remain in the hands of our members and are not subject to the takeover scheme of any individual or group.”

That statement is rich with irony, given that Wilhelm’s members played no role in building those assets.

We have tried to take the high road and ignore these attacks, but let’s put the facts out there:

UNITE entered the marriage with HERE a wealthy union with a strong and diverse financial portfolio worth hundreds of millions of dollars. In addition, UNITE Joint Boards also brought millions of dollars in real estate and cash into the merger. HERE had almost nothing.
Within hours of the merger, UNITE committed millions of dollars of its reserves to help out HERE.
Over five years, we spent more than $100 million supporting Wilhelm, his lieutenants and their expensive consultants’ failed organizing strategies, including more than $10 million on one of his Yale buddies in Toronto.
Now that we have ended this failed merger, John Wilhelm is laying claim to hundreds of millions of dollars of assets that we brought to the merger. (see the fact sheet Taking the Shirts Off Our Back below)

Let’s be frank: The only person trying to take something that doesn’t belong to him here is John Wilhelm.

150,000 former UNITE HERE members left that union to form Workers United and affiliate with SEIU. It was their predecessor union, UNITE, that contributed virtually ALL of the assets that John Wilhelm is nowclaiming belong to HERE’s leaders. They want our bank. They want our building. They want our members’ dues.

Workers United members and retirees are only asking to keep some of what already belonged to them. These garment and textile workers should not be forced to pay the price for this failed merger, and we will fight this outrageous attempt to cut them off from their rightful inheritance: the assets that their unions saved and built and brought to the merger.

Thank you for your support and all you do each day to help hardworking men and women.

In solidarity,
Bruce Raynor
President, Workers United

Edgar Romney
Secretary-Treasurer, Workers United

TAKING THE SHIRTS OFF OUR BACKS?
John Wilhelm Attempts to Lay Claim to Garment and Textile Workers’ Legacy

“The union assets-the buildings, medical centers, housing and the bank-were built with our sweat, tears, pennies and dimes. We built these things, which are now called assets, to provide a better future for our brothers and sisters who followed us in the labor movement … Our assets are not a checkbook; they’re a symbol of what workers can accomplish. Our assets are our source of hope, accomplishment and victory. To lose our buildings, medical centers, housing and bank is to lose a piece of ourselves.”

–Workers United National Retiree Council

In 2004, two independent unions-UNITE and HERE-merged to form UNITE HERE.

UNITE, the result of an earlier merger of the International Ladies’ Garment Workers’ Union (ILGWU) and the Amalgamated Clothing and Textile Workers Union (ACTWU), developed through years of careful saving and investing into a union with a strong financial portfolio despite its shrinking jurisdiction.

HERE, the Hotel Employees and Restaurant Employees Union, had enormous potential for organizing given its jurisdiction but was nearly broke at the time of the merger, with few assets and significant liabilities given the Sept. 11 terrorist attacks and the history of HERE’s infiltration by organized crime. In fact, it was common knowledge across the labor movement that the main reason HERE leadership was seeking a merger was the union faced dire financial circumstances and an inability to organize within its core jurisdictions.

Five years later, after the 2009 breakup of UNITE HERE and the formation of Workers United out of most of the original UNITE, HERE is brazenly attempting to lay claim to a number of the assets UNITE brought to the merger, including:

The Amalgamated Bank
estimated value: $225 million
Founded by the Amalgamated Clothing Workers of America in 1923, the Amalgamated Bank was built over the years on the backs of immigrant garment workers and is the only fully union-owned bank in the United States. At the time of the UNITE HERE merger just five years ago, the bank was owned by UNITE and its affiliates-not by HERE. The bank has come to pay an annual dividend worth millions of dollars to UNITE and its joint boards. Today, the bank has nearly $4.7 billion in total assets and it generates millions of dollars of annual revenue for the union, which allows it to keep dues for its members low.

Despite the long-standing ownership stake of UNITE and its predecessor unions in the needletrades, leaders of the HERE side of the failed merger are attempting to seize ownership of the bank.

275 Seventh Ave., New York, N.Y.
estimated value: $75 million-$100 million
Purchased by the International Ladies’ Garment Workers’ Union more than 60 years ago, this 28-story office building has housed over time ILGWU garment shops, a manufacturing center, the ILGWU headquarters, the union’s health center and many of its locals, a training center for immigrant workers and many progressive organizations supporting workers’ rights and other causes. Today it is a Class B commercial office property and it is estimated to be worth $75 million-$100 million.

Leaders of the HERE are currently occupying the 275 Seventh Ave. offices that once served as home to UNITE, and they have locked out the former occupants. UNITE HERE President John Wilhelm has made a claim for total ownership of the building in court and in public statements. His supporters have also made a move to raid the building fund, approximately $9 million, in complete disregard of the needs of the building and the authority of the independent managers of the building.

The UNITE Strike Fund
estimated value $20 million
At the time of the merger, UNITE had approximately $12.8 million in its Strike and Defense Fund. In contrast, HERE’s strike fund had very little-about $2.9 million. After the merger, UNITE HERE used the merged fund to support a major, and enormously successful, strike of Atlantic City, N.J., casino workers and an ongoing strike at the Congress Hotel in Chicago. These two strikes cost the fund more than $10 million.

The strike fund has been replenished by utilizing a portion of the international union’s per capita receipts and is now worth about $20 million. It has been built by all the former members of UNITE HERE, including those members who are now part of Workers United, despite the solidarity shown by former UNITE members in support of HERE members, Wilhelm is laying claim to the entire strike fund. Workers United members deserve the ability to support themselves in a strike and are entitled to a portion of the fund.

Dues Payments of Workers United Members
estimated value: approximately $2.5 million per month
In March 2009, almost 150,000 members and their representatives voted to disaffiliate from UNITE HERE, formed Workers United and then affiliated with the Service Employees International Union (SEIU)*. Despite the workers’ democratic decision to leave UNITE HERE, President Wilhelm sent a number of letters to as many as 1,600 employers of these workers challenging their representation and suggesting their dues should be escrowed. At the same time, the National Labor Relations Board-along with seven NLRB regional directors-ruled that the Workers United affiliate is the legitimate union for the workers, rejecting UNITE HERE’s arguments to the contrary.

President Wilhelm stepped up his efforts July 14 to claim dues payments of Workers United members. He sent a letter to employers all over the country threatening employers who “continue making dues payments to an entity that no longer claims to be affiliated with UNITE HERE” and “dues should be sent directly to [UNITE HERE] to satisfy its priority claim.” While the NLRB has already found that Workers United is the rightful representative of these workers in every case that has come up, UNITE HERE is trying to divert more than $2.5 million a month of Workers United members’ dues money to its own coffers.

A SETTLEMENT OFFER

In addition to proposing a deal on jurisdiction and the members who are currently in dispute, Workers United/SEIU has made an offer of almost $50 million to UNITE HERE as part of a good faith effort to resolve the outstanding issues between the unions.

This financial offer would provide nearly $31 million in immediate cash to President Wilhelm’s cash-strapped union, as well as a payment of $3 million per year for the next five years. This amount of money would also ensure that HERE walks away from the merger having more than doubled what it brought to it.

The predecessor unions of Workers United, including the ILGWU, ACTWU and UNITE, spent a lifetime amassing a financial base and diverse portfolio to help these workers, historically some of the most low-paid and exploited workers in North America, achieve better lives. Ironically, UNITE HERE President John Wilhelm is now positioning HERE as the heir to the work of previous generations of ILGWU and ACTWU members. “We are committed to ensuring that assets that have been built by generations of hardworking members remain in the hands of our members and are not subject to the takeover scheme of any individual or group,” he has said**.

The legacy of ILGWU, ACTWU and UNITE, must not fall victim to opportunism, greed or a legal scheme by HERE to seize their assets. Workers United is committed to defending the interests of our members, as well as the legacies of the hardworking women and men who built a foundation for other workers in the needletrades to thrive and achieve a better life.

* As part of the affiliation agreement between SEIU and Workers United, SEIU has no stake in or control over the bank, and Workers United retains ownership and control over all its assets, including the building.

**UNITE HERE press release, July 16, 2009.