New York Local Puts $2.6 Million in Escrow for Discrimination Suit

Sheet Metal Workers Int’l Ass’n Local 28 in N.Y.C. must set aside $2.6 million to compensate minority workers subjected to discriminatory practices since 1975, the U.S. Court of Appeals for the Second Circuit ruled Apr. 16. The court found no abuse of discretion by the district court and affirmed the escrow order.

Under the terms of the district court decision, Local 28 must place $1 million in an escrow fund immediately and an additional $1.6 million in the fund within six months. In addition, Local 28 must place $900,000 per year in the escrow fund, starting Dec. 31, 2001, for a period to be determined by the court following individual back-pay hearings. Although the total amount of the back-pay award has not been determined, “It is likely that this amount will be in excess of what the union is able to pay at present and could even exceed $12 million,” the court said. The court established the schedule for escrow payments to meet possible employment discrimination liabilities.

The litigation dates back to 1971, when the EEOC brought charges against Local 28 alleging violations of Title VII of the Civil Rights Act of 1964. The local was found to have discriminated against nonwhite workers in its admission and job referral policies, was subjected to a series of affirmative action plans and orders and amended affirmative action plans and orders, and held in contempt of court.  [BNA 4/23/01]

APA Surrender $45.5 Million Fine to American Airlines
American Airlines and the Allied Pilots Ass’n reached an agreement Apr. 27 under which APA will pay a $45.5 million contempt damage award leveled against it for refusing to end a 1999 union sickout. Under the agreement, APA immediately signed over to AA more than $20 million that was placed in a fund two years ago. In addition, the parties agreed to a 15-year payment schedule under which the remaining $25.5 million will be repaid, with interest. AA dropped claims against ex-APA president Richard LaVoy and ex-vice president Brian Mayhew and 23 other union bosses.
 In a joint filing, the parties submitted the agreement for the approval of U.S. Dist. Judge Joe Kendall in the N. Dist. of Tex. Kendall, who levied the $45.5 million fine against APA and its bosses for violating his order to call off a sickout in 1999, had set an April 30 deadline for AA to take action either to collect or dismiss the damages. [BNA 5/1/01]

Tainted New York Boss Hid Arrest
Am. Fed’n of Gov’t Employees Local 2005 boss, Raymond L. Cotton, admitted in court that he did not reveal an arrest on his job application, according to a court transcript. The federal correction officers union head also testified that he did not disclose the arrest in a pistol-license application filed with the N.Y.C. Police Dep’t.

Cotton appeared at a Nov. 2000 presentencing hearing on behalf of ex-prison guard Anthony Martinez, who had been convicted on federal corruption charges. U.S. Dist. Judge Frederic Block later sentenced Martinez to more than 6 years in prison for taking $2,400 to arrange visits and bring drugs inside Brooklyn’s Metro. Detention Ctr. Under cross-examination by Asst. U.S. Atty. John Kroger, Cotton testified that he did not tell the Bureau of Prisons about the arrest.

Newsday reported Apr.10 that Cotton is the subject of an internal Dep’t of Justice report in which 17 inmates and three other correction officers allege that he did favors for members of organized crime between 1990 and 1998.  The favors allegedly included smuggling in contraband like hero sandwiches, veal cutlets and radios, giving warnings of prison searches and breaking visitation rules in exchange for bribes. Cotton claimed all the allegations were false. [Newsday (N.Y.) 4/17/01]