Statement from the Review Officer regarding the MWA Arbitration

Review Officer Dennis Walsh posted the following message on the District Councils web site late Friday afternoon.

The members of this Union face a grave and imminent crisis.

As you may know, Arbitrator Townley has previously found in favor of the MWA in its arbitration claim that its MFN clause entitles MWA employers to receive the same terms granted to Gilbert Displays by the Forde Administration in 2009.

MWA contractors have relied on the decision to unilaterally cut compensation to members.

Yesterday morning in a proceeding at the American Arbitration Association, the MWA claimed its damages were $59 million based on the Gilbert Displays deal. That is approximately $9 million more than the total assets of the District Council.

A strategy for the District Council to effectively prevent such a devastating outcome was revealed yesterday.  It in part involved the retention of additional attorneys (Paul Schectman, Steve Cohen and Irwin Rochman).

The strategy is entirely consistent with and fosters the purpose and goals of the Consent Decree and Stipulation and Order.

Among other things that occurred yesterday in a meeting between counsel for the MWA, the District Council leadership and its counsel and the Review Officer, a fair cash settlement offer to end the arbitration was made by the District Council which expires on Monday, July 23.  It is independent from talks regarding the MWA’s cutting of compensation and for a new collective bargaining agreement which will begin Thursday, July 26th.

I also informed counsel for the District Council and the MWA that if any award was issued in the range I have heard (14 to 59 million dollars) that I would make a Paragraph 12.i motion under the Stipulation and Order to preserve the District Council, allow it to meet its obligations under the Consent Decree and Stipulation and Order to end corruption and racketeering and protect the goals of the court orders from being impinged by this matter.

Importantly, after the question was raised by counsel for the District Council, the arbitrator indicated yesterday in discussions with the parties that she would in fact like the question of the impact of the Decree and Stipulation and Order addressed in briefs due on September 7, 2012.

As part of my Paragraph 5.b review of the proposed retention of additional attorneys for the District Council, I met with two of the proposed attorneys and District Council General Counsel James Murphy, as well as the DC leadership team, on Monday, July 16th.  The lawyers in question are highly skilled, experienced and are also men of integrity. Cohen and Schectman are former federal prosecutors in the SDNY. Though I recognized their skill and experience and the gravity of the situation, I was concerned with the potential cost of hiring the attorneys and had not yet consented to their retention.  I specifically asked Rochman and Cohen on Monday what and how they would charge the District Council and found the terms reasonable and the undertaking in the best interests of the DC, the Consent Decree and the Stipulation and Order. The flat fee covers their firms’ complete involvement through any litigation and appeals that might be required.

I and the Union leadership recognized the necessity of the delegates considering and rendering a judgment on the proposition of retaining attorneys.  On the condition that the delegates had to approve the retention on an informed basis, I did not object to the retention. As time did not allow a normal method of voting, I informed the DC that I would find email voting acceptable provided that the proposition was made crystal clear and the links to the biographies of the attorneys be provided (and that signatures of the delegates be obtained).  Using this method, I understand that that the delegates passed the motion by an overwhelming majority.

Based on the many unique facts of the situation, my decision regarding this procedure should not be cited by anyone as precedent for use of this method in the future.

Dennis M. Walsh
Review Officer