The Multinational Monitor

November 1990 - VOLUME 11 - NUMBER 11

N A M E S   I N   T H E   N E W S

A Plane Fix

Since the deregulation of the U.S. airline industry in the 1980s, a computerized data base has allowed airline companies to discuss, negotiate and rig prices, ultimately forcing passengers to pay artificially high prices, according to a number of antitrust lawsuits which were recently consolidated into one case in federal court.

The lawsuits were filed by a number of individuals and companies against almost all the major airlines, including American, United, USAir, Delta, Northwest, Continental and TWA. The other defendant is the Airline Tariff Publishing Company (ATPC), which operates the computerized data base. "Officials of the defendant airlines carefully monitor ATPC and if a competitor announces a change with which an airline defendant is not happy, that airline, sometimes within minutes, signals the offending airline to reinstate its original fares and otherwise threatens retaliation for fare cutting," the lawsuit alleges.

U.S. District Court Judge Marvin H. Shoob will decide on a motion to certify the plaintiffs as a class. "If it is certified as class action, ... it would proceed on behalf of tens of millions of people," says W. Pitts Carr, the lead attorney in the case. Anyone who has purchased tickets from the airlines from November 1987 to September 1990 could potentially become a member of the class.

Paul Stephen Dempsey, an airline industry expert and professor at the University of Denver College of Law, says the use of the computerized reservation system to fix prices is "little different than picking up the telephone and talking to your competitor about pricing," which is prohibited by U.S. antitrust laws.

Selling Bigotry

Federal investigators are probing allegations that the security staff at a Jordan Marsh department store in Boston routinely harasses minorities. Jordan Marsh is owned by Federated Stores, Inc., a corporation controlling a number of upscale department stores.

According to a number of lawsuits and news reports, store detectives and security guards systematically abuse shoppers physically and verbally, make false arrests and conduct illegal off-site investigations and arrests. Specific allegations of misconduct by the security staff, usually perpetrated upon blacks, homosexuals and other minorities, include: conducting illegal searches and seizures from persons suspected of shoplifting; using "peepholes" to spy on customers in fitting rooms; and confiscating suspects' property.

Two former store detectives allege that they were fired for disclosing abuses by their supervisors. According to their lawyer, the detectives claim that the security personnel "routinely harassed and abused people of color and other target groups, [using] racial and ethnic slurs during the course of interrogations and arrests." The detectives say the security department encouraged such behavior.

In a statement, the company responded, "The Jordan Marsh Company has had and will continue to have a strict corporate policy of not tolerating any employee acting in an improper manner."

Oxy's Offshore Disaster

Occidental Petroleum's poor management practices and "superficial" inspections by the British government caused the world's worst oil industry disaster in July 1988, according to a recently released report by Scottish high court judge Lord Cullen. The negligence led to an explosion in the North Sea aboard Occidental's Piper Alpha offshore oil rig. The explosion and the ensuing fires which took almost a month to extinguish killed 167 persons.

The report harshly criticizes Occidental's training and safety procedures. "Occidental management should have been more aware of the need for a high standard of incident prevention and firefighting," the report says. "They were too easily satisfied that the permit to work system was being operated correctly, relying on the absence of feedback of problems as indicating that all was well."

Cullen also says the inspections of the Piper Alpha by Britain's Department of Energy were "superficial" and tended "toward over-conservatism, insularity and a lack of ability to look at the regime and themselves in a critical way." He charges that the energy department has hampered the development of legislation in conjunction with Britain's Health and Safety at Work Act.

Unions Bust Beverly

Beverly Enterprises, the nation's largest chain of nursing homes, engaged in wide-ranging anti-union activities in violation of federal law, National Labor Relations Board Administrative Law Judge Martin Linsky ruled in November 1990. Linsky found that Beverly illegally threatened, interrogated, conducted surveillance of and fired employees at 33 facilities in 12 states. Jerry Shea, a director of the health care employees union at the AFL-CIO, said Linsky's decision represents a "very significant legal finding" in part because it is one of a small number of cases in which a national employer has been found liable for the labor law violations of its local units.

Noting that "this is not Beverly's first encounter with the Board," Linsky issued a virtually unprecedented cease and desist order covering all of Beverly's approximately 1,000 nursing home centers. The order calls for the nursing centers to post a bulletin informing employees of the decision and advising them of their right to unionize.

Linsky detailed numerous cases of unlawful employee discharge, illegal warnings against unionizing, failures to bargain in good faith and illegal prohibitions on distributing union leaflets. He found evidence of a physical assault against a union representative at one nursing center. In another instance, Linsky found "an unlawful threat of harassment to an employee if she didn't testify" in the company's favor at one of the NLRB hearings.

William Ihle, a Beverly Enterprises spokesperson, called Linsky's ruling "overly broad and without factual substance or legal authority." Ihle says the company intends to appeal the recommendation to the full NLRB.

David Lapp

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