Board Interlocks Embroil Banks in Labor Disputes
Dietrich, R. Kevin, Smith, Scott D., American Banker
Labor unions are turning up the heat on banks with ties to companies locked in labor disputes.
In the latest examples, unions in Washington, D.C., and Nevada are putting pressure on banks with business links to a gas company and two Las Vegas casinos that are battling with unions. The unions are focusing on company executives and directors who also sit on the banks' boards.
Such campaigns, union organizers warn, will become more common.
"It's the kind of strategy that could turn the labor movement around," said Ray Rogers, president of Corporate Campaign Inc., a New York consulting firm that has organized such union pressure tactics for 20 years. "Especially with the new administration at the AFL-CIO, you're going to see a lot more of it."
New leadership at the AFL-CIO, voted in last October, campaigned on an "in- your-face" platform that they pledged would bring new tools of corporate pressure to bear on the union struggle, said Deborah Dugan, a spokesman. Tough tactics against banks came into view last year when the International Brotherhood of Teamsters protested NationsBank Corp., in part because of the banking company's use of a courier service involved in a labor dispute. The teamsters, seeking to block some NationsBank merger plans, also attacked NationsBank's CRA record.
Last week in Washington, a coalition of labor unions threatened to withdraw more than $100 million from Crestar Bank in support of gas workers embroiled in a labor dispute with Washington Gas Light Co.
The unions see Richmond-based Crestar, a major lender to Washington Gas, as one of the utility's close allies. In addition, Washington Gas chief executive Patrick Maher and director Karen Hastie Williams are on the bank's board of directors.
And in Nevada, the state's largest labor union has been disparaging the financial performance of two Las Vegas community banks, whose boards include executives of two local casinos. The union is engaged in labor battles with both casinos.
In both cases, bank officials dismiss the union efforts. They claim that it's a matter for the unions and the companies to settle, not the banks.
"The union has a vendetta against these directors and I think it's inappropriate that they're trying to bring the banks into this," said John S. …