I. INTRODUCTION

II. "REGISTRATION" OF LABOR UNIONS IN MEXICO

A. The Stage

B. Union Representation Procedures Under Mexico's Federal Labor Law

C. Maintaining Legal Status

III. THE FORMATION OF LABOR UNIONS IN THE U.S.

A. Employee Rights to Form Unions

B. Labor Unions' Formation Process--U.S. Section 9 of the NLRA

C. Reporting Requirements in the U.S.

I. INTRODUCTION

Whether the provisions of Mexican labor law pertaining to employees' right to organize comply, in their application, with the North American Agreement on Labor Cooperation (NAALC) has been a persistent subject of controversy since the implementation of that Agreement.⁽³⁾ This controversy led to the announcement in early August, 1996, by the U.S. National Administrative Office (U.S. NAO)⁽⁴⁾ that it would investigate and issue findings on whether Mexico's regulatory process with respect to the workers' rights to organize is consistent with NAALC's principles.^{(5) (6)} Earlier this year, petitions were filed with the U.S. NAO by several organizations, alleging violations of those rights.⁽⁷⁾ In July, the Mexican NAO urged its U.S. counterpart not to investigate said charges, arguing, in essence, that since the International Labor Organization (ILO)'s Committee on Freedom of Association was already reviewing that issue, the U.S. NAO should defer to the ILO, under the NAALC's pertinent provisions.⁽⁸⁾

This article compares the statutory framework which provides for the "formation" of labor unions in the U.S. and Mexico and the procedures which labor unions must follow in both countries in order to obtain and maintain their legal status.

II. "REGISTRATION" OF LABOR UNIONS IN MEXICO

A. The Stage

In recent years, Mexico's labor law processes have been the subject of close scrutiny and discussion both by domestic and foreign analysts. Perhaps the area that has generated the greatest interest involves the requisites set forth in Mexican legislation for the "registration" of labor organizations. This interest is due, primarily, to the enactment of the North American Free Trade Agreement (NAFTA) and its offspring, the NAALC. The international commitments made by the NAFTA countries have brought to the surface the deep differences between each country's labor legislation, which, in good measure, derive from their different historical and cultural background.

Under Mexico's labor law framework, the importance of the corporatist structure of "official" unions (or sindicatos) is paramount. The main official association of unions, the Mexican Confederation of Workers (CTM), has been a stronghold of stability for Mexico's ruling party, the Institutional Revolutionary Party (PRI), boasting 8 to 10 million members. A consequence of the institutionalization of the CTM as an ally of the PRI has been that the Mexican government has favored and even promoted the "registry" of new unions so long as they are affiliated to the CTM and has, correspondingly, discouraged the formation, i.e., "registration" of independent unions or confederation of unions which are not CTM affiliates.⁽⁹⁾ As explained below, "registration" with the proper governmental agency is a prerequisite under mexican law for the legal existence of a labor union. This state of affairs has been the subject of legal challenges which, recently, reached Mexico's highest court.

Thus, on May 21, 1996, Mexico's Supreme Court ruled on the right of a group of workers to constitute themselves into a labor union and obtain the necessary "registration". At issue was a law of the state of Jalisco that provided that there could be no more than one labor union representing state or municipal employees in that state. Based on Article 123 of the Mexican Constitution, which guarantees the right of a worker to join, form or separate from any specific labor organization, the Court declared the law unconstitutional and granted an injunction to the Union of Academic Personnel of the Universidad de Guadalajara. The Court noted that Jalisco's law could not restrict the constitutional right of association. On the same day, the Court, reversing a lower court ruling, also held that a group of employees from the state of Oaxaca could apply for union registration, irrespective of the fact that there was another union in the workplace.

B. Union Registration Procedures Under Mexico's Federal Labor Law

Mexico's Federal Labor Law (FLL) protects the right of both workers and employers to associate "in the search of the study, improvement and defense of their respective interests" and provides the framework for the "registration" of labor unions.⁽¹⁰⁾ The FLL, at Article 357, provides that in order to organize a union, workers or employers do not need any prior governmental authorization and Articles 359 et seq., recognize the unions' right to establish their own by-laws and rules; designate their representatives and set forth their own organization and administration.

In the case of workers, however, in order to properly constitute a labor union, the FLL, at Article 364, imposes a requirement of at least 20 members in active service, and article 365 imposes the requirement of obtaining "registration" either from the Ministry of Labor (Secretaria del Trabajo y Prevision Social or STPS), or from the appropriate Conciliation and Arbitration Board (which are Mexico's equivalent to labor courts and have jurisdiction in individual and collective claims), depending upon the specific industry involved. (Article 527 lists those industries which fall within federal jurisdiction. Labor unions in those industries must obtain registration from STPS.) Without registration with the appropriate governmental authorities there is no legal status as a labor union.

In order to "register," the prospective labor union must submit the following documents:

1. An authenticated copy of the certificate of the constitutive meeting;

2. A complete list with the number, names and addresses of its members and the names and domiciles of the employers to which each member renders his/her respective services;

3. An authenticated copy of its by laws or statutes (which shall contain requisites set forth by article 371 of FLL); and

4. An authenticated copy of the certificate of the meeting in which the board of directors was elected.

In most cases, each and every authentication shall be made by the General Secretary, the Organization Secretary and the Minute Secretary of the prospective labor union. (Article 365)

Under the FLL, Article 366, registration of a labor union will be denied:

1. When its objectives are other than those stated in Article 356, (see fn. 10 above); or

2. When it does not have at least twenty members, as required by Article 364; or

3. When the union fails to provide the documents required by Article 365.

And under Article 369 registration shall be cancelled:

1. In case of dissolution of the union; or

2. Whenever the union fails to meet any of the legal requisites.

With registration, the labor union acquires the legal status necessary under Mexican law to enter into contracts, acquire property and defend its rights and those of its members before judicial courts and administrative agencies. (FLL, Articles 374 and 375).

C. Maintaining Legal Status

In order to maintain their legal status, labor unions must file reports every three months with their respective "registry" authority, which include the names of their new members and of those who have ceased membership. In addition, labor unions must inform their "registry" authority of any changes in their offices and/or in their bylaws within 10 days of said changes. The notification must be accompanied by authenticated copies of the documents reflecting said changes (FLL, Article 377).

III. THE FORMATION OF LABOR UNIONS IN THE U.S.

A. Employees Rights to Form Unions

In the United States, workers do not have a constitutional right to associate. The National Labor Relations Act, 29 U.S.C. Section 151 et seq. (NLRA or the Act), is the statute that provides the legal framework through which the right of employees to associate is protected. The declaration of policy in the Act states:

"It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free-flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protections."

Indeed, the most basic policy under the NLRA is the employees' free choice to form a labor organization or, to use the more popular term, to unionize, without fear of reprisal or economic penalty. Section 7 of the Act states:

"Employees shall have the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection and shall also have the right to refrain from any or all such activities . . . ."

Thus, the principal rights protected by Section 7 are:

• Forming or attempting to form a union among the employees of an employer.

• Joining a union whether the union is recognized by the employer or not.

• Assisting a union to organize the employees of an employer.

• Acting in "concert" with other employees with respect to terms and conditions of employment.

• Refraining from any concerted activity and from activity on behalf or in support of a union.

Section 8 of the Act declares it to be an unfair labor practice "to interfere with restrain, or coerce employees in the exercise of their rights guaranteed in Section 7."

B. Labor Unions' Formation Process--U.S. Section 9 of the NLRA

In the United States, unlike Mexico, labor unions need not be "registered" with or authorized by the federal or state governments in order to be formed or require employers to recognize them as the exclusive bargaining representative of the employer's employees, or to enter into legally binding contracts. In short, labor unions do not require governmental authorization as a prerequisite to constitute a legal entity for any purpose.

The term "labor organization" is purposely broadly defined, both in the Act and in the Labor and Management Reporting and Disclosure Act (LMRDA) 29 U.S.C. § 401 et seq., in order to preclude governmental interference or restrictions in their formation. The Act, § 2(5) (29 U.S.C. § 152(5)) states:

The term "labor organization" means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work. (emphasis added.)

The LMRDA definition is very similar. § 402(i) states:

"Labor organization" means a labor organization engaged in an industry affecting commerce and includes any organization of any kind, any agency, or employee representation committee, group, association, or plan so engaged in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment, and any conference, general committee, joint or system board, or joint council so engaged which is subordinate to a national or international labor organization, other than a State or local central body. (emphasis added)

Thus, the existence of a "labor organization" is not in any way dependent upon compliance with governmental regulations.

Absent voluntary recognition by the employer, a union may require the employer to recognize and bargain with it as the "exclusive" bargaining representative of a group or "unit" of the employer's employees, by obtaining "certification" as the bargaining representative of said unit from the National Labor Relations Board (NLRB), a federal agency established pursuant to Section 3(a) of the Act. In order to obtain such certification from the NLRB, a union must file a petition for a secret ballot election to be conducted by the NLRB among the employees in the group or unit requested by the union (NLRA Section 9) and obtain a simple majority of the employees' votes in the election.

Generally, in order for the NLRB to process a union election petition, it must be supported by at least 30% of the group which the union seeks to represent ("showing of interest"). E.g., S. H. Kress Co., 137 NLRB 1244, 1248 (1962). Such showing of interest or support is normally submitted by unions to the NLRB in the form of individual authorization cards. E.g., Potomac Electric Co., 111 NLRB 553, 554, 555 (1955). If an election petition is supported by an adequate showing of interest, the NLRB must "investigate" such petition. Section 9(c)(1) of the Act.

Unless the parties (petitioning union and employer) stipulate on the election arrangement, the NLRB must, after "investigation," either dismiss the petition or order the election. In practically all cases, the NLRB's "investigation" consists of a formal hearing before an officer or employee of the NLRB regional office where the petition was filed, on the issues of the "appropriateness," for collective bargaining purposes, of the unit or group of employees stated in the petition and/or on the eligibility of certain individual employees or classification of employees to vote in the election. At such hearings, the union seeking the NLRB Certification and the employer have an opportunity to present evidence and argue their respective positions in propria persona or through counsel.

The NLRB's findings and legal rational, which must be issued in writing, must be consistent with the Act and with legal precedent. (NLRB Rules Section 102.67) Section 9(b) of the Act states in pertinent part:

The Board shall decide in each case whether, in order to assure employees the fullest freedom in exercising the rights guaranteed by this Act, the unit appropriate for the purpose of collective bargaining shall be the employer unit, craft unit, plan unit, or subdivision thereof ... (emphasis added)

Once the issues of eligibility and/or the composition of the group or unit of employees are decided, the NLRB must either dismiss the petition, if the union declines to proceed, or "direct an election by secret ballot and shall certify the results thereof." Section 9(c)(1) of the NLRA. The Act, Section 9(c)(2), specifically provides that the NLRB must apply the same rules "irrespective of the identity of the persons filing the petition."

Once certified, the union has the right to demand that the employer engage in good faith collective bargaining for a contract on terms and conditions of employment of the employees it represents. An employer's failure to recognize and bargain with a union that has been certified by the NLRB as the exclusive bargaining representative of the employer's employees, constitutes an unfair labor practice; that is, a violation of Section 8 of the NLRA. Upon a duly filed charge alleging such violation, the General Counsel of the NLRB must prosecute the employer. Sections 8(a)(5) and 3(d) of the Act.

In sum, in the U.S., unlike in Mexico, labor unions do not require government authorization or "registration" as a prerequisite to their formation or in order to petition for a secret ballot election among the employees they seek to represent to be conducted by the federal government. If elected by a simple majority of said employees in an appropriate group or unit, the union's right to require recognition and bargaining by the employer must be prosecuted by the federal government.

C. Reporting Requirements in the U.S.

In order to maintain their legal existence, including the rights to represent employees and/or to enter into collective bargaining or other contracts, labor unions are not required under U.S. law to disclose the names of their members. Importantly, while the LMRDA imposes certain reporting requirements on labor unions,⁽¹¹⁾ which may be enforced by union members or by the Secretary of Labor through civil actions, failure to comply with said reporting requirements does not deprive unions of their right to file petitions for election with and obtain certifications from the NLRB, nor to file unfair labor practice charges which, if meritorious, would require the NLRB General Counsel to prosecute employers in order to require union recognition and bargaining.

The LMRDA § 431 (see fn. 11) covers the reporting requirements on labor organizations which, prior to 1959, were required by Section 9(f) and (g) of the Act. 29 U.S.C. § 159(f) and (g).

Sections 9(f) and (g) were repealed by the LMRDA in 1959. Those sections provided that unions that failed to meet the filing requirements were deprived of access to NLRB processes, i.e., would not be certified under the Act and no complaint could be issued by the NLRB on charges filed by them.⁽¹²⁾ The legislative history of the LMRDA reveals the considerations which led to their repeal. Senate Report No. 187 stated in pertinent part:

To deny a union access to the National Labor Relations Board because its officers did not file a proper report is unwise for four reasons. First, it would be ineffective in the case of strong unions not dependent upon NLRB facilities; second, it is unfair to the members who have done no wrong but who would suffer both the denial of information and the loss of NLRB protection; third, the rights and duties created by the National Labor Relations Act exist for the benefit of the public, and such legal obligations should be enforced equally in all cases, not traded off against one another as a system of rewards and punishments; and, finally, experience with a similar provision in the present law clearly demonstrates that conditioning the use of the NLRB processes on compliance with not wholly related requirements such as this can result in a frustration of the principal purpose of the Labor Management Relations Act, that is, settlement of labor disputes in an orderly, efficient, and expeditious manner. In short, the committee is convinced that such a procedure is costly, cumbersome, and of doubtful efficacy.

IV. CONCLUSION

While the basic labor laws of both the U.S. and Mexico proclaim the protection of the worker's right to organize, the procedures followed in both countries are drastically different. In Mexico, labor unions depend upon the governmental imprimatur for their very existence. In the U.S., it is the workers' election, by secret ballot, pursuant to procedures specified in Section 9 of the NLRA and in the regulations published by the NLRB, that grants or denies legal status as a labor union.

1. Jerry Morales is a partner in the law firm of Snell & Wilmer L.L.P., officed in Phoenix, Arizona, where he represents management in labor/employment and international matters. Snell & Wilmer L.L.P. also has offices in Tucson, Arizona; Orange County, California; and Salt Lake City, Utah.

2. Octavio Novaro was a visiting attorney at the law firm of Snell & Wilmer L.L.P. during the summer of 1996. Mr. Novaro is an associate in the law firm of Barrera, Siqueiros Y Torres Landa, S.C., in Mexico City.

3. See, e.g. 118 Daily Labor Report (DLR) A-5, June 19, 1996; 156 DLR, CC-1, August 13, 1996; and 159 DLR A-5, August 16, 1996.

4. National Administration Offices (NAOs) were created by the NAALC for the purpose, in essence, of supervising the application of the labor laws in the three NAFTA countries and their compliance with the NAALC's principles.

5. One of the "guiding principles" which the parties to the North American Agreement on Labor Cooperation (NAALC) committed to promote, subject to each Party's domestic law, is the freedom of association and protection of the right to organize. This guiding principle is stated in Annex I to the NAALC as follows: "The right of workers exercised freely and without impediment to establish and join organizations of their own choosing to further and defend their interests."

6. 149 DLR A-8, August 2, 1996.

7. Human Rights Watch/Americas, International Labor Rights Fund and the Mexican-based National Association of Democratic Lawyers.

8. 159 DLR A-5, August 16, 1996.

9. In recent years, however, some independent movements have gained strength, e.g., the Revolutionary Worker's Confederation or COR; the Authentic Worker's Front or FAT and the Telephone Worker's Union.

10. Title VII ("Collective Working Relations"), Chapter II ("Unions, Federations and Confederations"), Article 356. Article 8 of the FLL establishes that any person who renders to another person or entity "a personal subordinate service" shall be considered a worker. Article 10 establishes that any person or entity that utilizes the services of one or more workers, will be deemed an employer.

11. LMRDA § 431 provides:

Report of labor organizations

(a) Adoption and filing of constitution and bylaws; contents of report

Every labor organization shall adopt a constitution and bylaws and shall file a copy thereof with the Secretary, together with a report, signed by its president and secretary or corresponding principal officers, containing the following information--

1. the name of the labor organization, its mailing address, and any other address at which it maintains its principal office or at which it keeps the records referred to in this subchapter;

2. the name and title of each of its officers;

3. the initiation fee or fees required from a new or transferred member and fees for work permits required by the reporting labor organization;

4. the regular dues or fees or other periodic payments required to remain a member of the reporting labor organization; and

5. detailed statements, or references to specific provisions of documents filed under this subsection which contain such statements, showing the provision made and procedures followed with respect to each of the following: (A) qualifications for or restrictions on membership, (B) levying of assessments, (C) participation in insurance or other benefit plans, (D) authorization for disbursement of funds of the labor organization, (E) audit of financial transactions of the labor organization, (F) the calling of regular and special meetings, (G) the selection of officers and stewards and of any representatives to other bodies composed of labor organizations' representatives, with a specific statement of the manner in which each officer was elected, appointed, or otherwise selected, (H) discipline or removal of officers or agents for breaches of their trust, (I) imposition of fines, suspensions, and expulsions of members, including the grounds for such action and any provision made for notice, hearing, judgment on the evidence, and appeal procedures, (J) authorization for bargaining demands, (K) ratification of contract terms, (L) authorization for strikes, and (M) issuance of work permits. Any change in the information required by this subsection shall be reported to the Secretary at the time the reporting labor organization files with the Secretary the annual financial report required by subsection (b) of this section.

(b) Annual financial report; filing, contents

Every labor organization shall file annually with the Secretary a financial report signed by its president and treasurer or corresponding principal officers containing the following information in such detail as may be necessary accurately to disclose its financial condition and operations for its preceding fiscal year--

1. assets and liabilities at the beginning and end of the fiscal year;

2. receipts of any kind and the sources thereof;

3. salary, allowances, and other direct or indirect disbursements (including reimbursed expenses) to each officer and also to each employee who, during such fiscal year, received more than $10,000 in the aggregate from such labor organization and any other labor organization affiliated with it or with which it is affiliated, or which is affiliated with the same national or international labor organization;

4. direct and indirect loans made to any officer, employee, or member, which aggregated more than $250 during the fiscal year, together with a statement of the purpose, security, if any, and arrangements for repayment;

5. direct and indirect loans to any business enterprise, together with a statement of the purpose, security, if any, and arrangements for repayment; and

6. other disbursements made by it including the purposes thereof;

all in such categories as the Secretary may prescribe.

(c) Availability of information to members; examination of books, records, and accounts

Every labor organization required to submit a report under this subchapter shall make available the information required to be contained in such report to all of its members, and every such labor organization and its officers shall be under a duty enforceable at the suit of any member of such organization in any State court of competent jurisdiction or in the district court of the United States for the district in which such labor organization maintains its principal office, to permit such member for just cause to examine any books, records, and accounts necessary to verify such report. The court in such action may, in its discretion, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.

12. "(f) No investigation shall be made by the Board of any question affecting commerce concerning the representation of employees, raised by a labor organization under subsection (c) of this section, and no complaint shall be issued pursuant to a charge made by a labor organization under subsection (b) of section 10, unless such labor organization and any national or international labor organization of which such labor organization is an affiliate or constituent unit (A) shall have prior thereto filed with the Secretary of Labor copies of its constitution and bylaws and a report, in such form as the Secretary may prescribe, showing--

"(1) the name of such labor organization and the address of its principal place of business;

"(2) the names, titles, and compensation and allowances of its three principal officers and of any of its other officers or agents whose aggregate compensation and allowances for the preceding year exceeded $5,000, and the amount of the compensation and allowances paid to each such officer or agent during such year;

"(3) the manner in which the officers and agents referred to in clause (2) were elected, appointed, or otherwise selected;

"(4) the initiation fee or fees which new members are required to pay on becoming members of such labor organization;

"(5) the regular dues or fees which members are required to pay in order to remain members in good standing of such labor organization;

"(6) a detailed statement of, or reference to provisions of its constitution and bylaws showing the procedure followed with respect to, (a) qualification for or restrictions on membership, (b) election of officers and stewards, (c) calling of regular and special meetings, (d) levying of assessments, (e) imposition of fines, (f) authorization for bargaining demands, (g) ratification of contract terms, (h) authorization for strikes, (i) authorization for disbursement of union funds, (j) audit of union financial transactions, (k) participation in insurance or other benefit plans, and (l) expulsion of members and the grounds therefor;

and (B) can show that prior thereto it has--

"(1) filed with the Secretary of Labor, in such form as the Secretary may prescribe, a report showing all of (a) its receipts of any kind and the sources of such receipts, (b) its total assets and liabilities as of the end of its fiscal year, (c) the disbursements made by it during such fiscal year, including the purposes for which made; and

"(2) furnished to all of the members of such labor organization copies of the financial report required by paragraph (1) hereof to be filed with the Secretary of Labor.

"(g) It shall be the obligation of all labor organizations to file annually with the Secretary of Labor, in such form as the Secretary of Labor may prescribe, reports bringing up to date the information required to be supplied in the initial filing by subsection (f)(A) of this section, and to file with the Secretary of Labor and furnish to its members annually financial reports in the form and manner prescribed in subsection (f)(B). No labor organization shall be eligible for certification under this section as the representative of any employees, and no complaint shall issue under section 10 with respect to a charge filed by a labor organization unless it can show that it and any national or international labor organization of which it is an affiliate or constituent unit has complied with its obligation under this subsection.