Erosion of Union Power in Europe? Lessons for the International Business Client from Viking Line and Its Progeny

By Rasnic, Carol Daugherty | Labor Law Journal, Winter 2012 | Go to article overview

Erosion of Union Power in Europe? Lessons for the International Business Client from Viking Line and Its Progeny


Rasnic, Carol Daugherty, Labor Law Journal


When an irresistible force... meets an immovable object. . .something's gotta give.

Johnny Mercer. American songwriter (1909-1976)

I. Introduction

The force of a mighty labor organization and the determination of an unyielding employer during a labor dispute can elicit the worst of both sides. Traditionally laborfriendly Europe is still reeling over a series of decisions by the Europe Court ofjustice (hereinafter ECJ) in late 2007 and early 2008, beginning with the Viking Line decision,1 with the unions losing in each case. An American business should have some basic knowledge of the differing labor issues it will face in the European work setting and how these decisions have re-shaped the trajectory.

In 2011, demands of a powerful union contrary to management policy created a heated dispute in the United States. The Boeing Company faced a major union disruption of production plans in South Carolina, far from its home base of Seattle. Since this issue was settled before the National Labor Relations Board (NLRB) issued a ruling, how it might have been concluded is conjecture. Probably most labor lawyers view that settlement as a victory for the company. Similarly, in each of the European decisions, a union attempted to encroach on what would be considered management discretion under American federal law. These fact settings in Europe are arguably novel to the American labor lawyer.

Some scrutiny of this European judicial stance and a look at what might be responsive legislation at the European Union (hereinafter EU) level is instructive to the international business client. An understanding of differences in laws regulating collective bargaining can bea critical prerequisite to undertaking a commercial venture across the Atlantic.

II. European Union in general

The present day European Union was the post World War II brainchild of French foreign minister Robert Schumann. The 1951 Treaty of Paris, later subsumed by the 1957 Treaty of Rome, was an attempt to unify war-ravaged Europe in order to retain the peace that had been achieved at such monumental costs, both in the material sense and with regard to the loss of lives. What began as a six-member country entity then known as the European Community (and, in the 1957 Treaty of Rome that subsumed the earlier treaty, the European Communities) that focused on trade, markets, and economy has grown exponentially into a multi-treaty 27-country Leviathan. InJuIy, 2013, Croatia will become the twenty-eighth member, and Iceland, Montenegro, Macedonia, Serbia, and Turkey are candidate countries.

Even before these imminent additions, the EU, with ajuly, 2011 population of nearly 503 million, is the world's largest trading block with regard to total population.2 For purposes of perspective with respect to size, this can be compared with the April, 2011 U.S. population of less than 309 million.3 Even viewing the NAFTA 4 countries (Canada, Mexico, and the United States) as a trading unit, that population is about 444 million,5 still markedly less than that of the EU.

The EU has increased in respects other member states. The original common market laws have been augmented with social rights for workers and obligations for employers in a manner not likely contemplated by the founders. Moreover, the EU5 is a super-power that takes precedence over national laws.6 Whereas, American states cannot act contrary to the U.S. Constitution or laws of Congress, the United States is a sovereign nation with no superior ruling entity, the EU legal hierarchy of the EU is alien to the U.S. government, where the constitutional premise that the U.S Constitution and federal laws constitute the "supreme law of the land"7 precludes any usurpation of those laws by a multi-national body.

III. Treaty Law and the decisions

A. International Transport Workers' Union Federation et al. v. Viking Line ABP et al,8

Viking Line was a Finnish company that sailed from Helsinki to Talinn, Estonia.

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