Union violated Most Favored Nation provision, ordered to reduce wages and benefit contributions

Arbitrator Rosemary Townley has issued an award finding that the New York District Council of Carpenters breached the MFN provision of its contract with the Manufacturing Woodworkers Association of Greater New York. Arbitrator Townley’s award can be found here. The arbitrator determined that the MWA was entitled to retroactive application of the better terms and conditions to the date of the more favorable contract.


The contract provided “Should the Union knowingly allow its members to work for competitors of the employers for less than the wages established by this agreement… then the wages and/or conditions contained in this agreement shall immediately be changed to conform to the more favorable conditions.”


While there was conflicting testimony over whether the companies involved were in fact competitors, the arbitrator found that:


Although the DC argues that Gilbert’s business is 95% trade show oriented, while the MWA’s is a small percentage of its overall business, such facts are irrelevant in light of Article XXIV which is silent with respect to the percentage of work to be performed by a company to qualify as a “competitor.” Rather, the issue is whether the Company has any sales in the same market as the MWA employees. If the parties intended to attach percentages to the level of competition, then they would have added such language to this provision of the Agreement.

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Accordingly, Gilbert must be regarded as a “competitor” to the MWA employers, who are entitled to its requested remedy of the retroactive application of the better terms and conditions….

Update: Arbitrator Townley has issued her award on the remedial phase of the dispute here.