Three Fiat Chrysler workers in Detroit have filed a class-action suit against the auto manufacturer and their union, United Auto Workers, seeking refunds of all of their membership dues from 2009 through 2015. The workers say the manufacturer bribed the union leaders, tainting their collective bargaining agreements.
The lawsuit follows a guilty plea last week by Alphons Iacobelli, formerly the automaker's vice president of labor relations for its North American division, to two corruption charges related to siphoning off $4.5 million in funds intended for a worker training center jointly managed by the company and the union. As part of his plea agreement with the Justice Department, Iacobelli said he and other company executives illicitly paid UAW leaders $1.5 million to sway union contract negotiations the company's way, even "scripting" union officials on what to say.
“Everyone paid dues, but no one knew what was going on. We know [now] it went on for years," Raymond Sterling, a Bloomfield Hills attorney representing the workers, told the Detroit News. The lawsuit is based on Iacobelli's testimony and seeks potentially hundreds of millions of dollars. A judge must certify the case for it to move forward as a class action on behalf of UAW members.
Between 2009-2014 Iacobelli and UAW Vice President General Holiefield were the top officials at their respective organizations in charge of negotiating collective bargaining agreements. Last year the Justice Department charged Iacobelli with using $1 million in funds intended for a jointly run worker training center to buy a Ferrari sports car and charter a private jet, among other indulgences. Another $262,000 of that funding was diverted to Holiefield, who died in 2015, and his wife, Monica Morgan-Holiefield, who has a plea hearing set for Feb. 6.
UAW has denied that the contracts were corrupted, calling Iacobelli a "crook and a liar" who was spinning tales to appease prosecutors. "It appears that in an attempt to get lenient treatment from the government he is now falsely spinning his crimes as an effort to corrupt the collective bargaining process between the UAW and Fiat Chrysler," UAW President Dennis Williams said in an open letter to union members last week.
He nevertheless conceded that Holiefield and other union officials "allowed themselves to be corrupted by Mr. Iacobelli" that was "a terrible betrayal of our union’s trust. But there is simply no truth to the claim that this misconduct compromised the negotiation of our collective bargaining agreement or had any impact on union funds."
Fiat Chrysler declined to comment. A UAW spokesman referred to Williams' letter.
The Justice probe has expanded into other potential corruption between Fiat Chrysler Automobiles and union officials. On Monday, the Detroit Free Press reported that six more indictments of UAW and Fiat Chrysler officials were expected soon.