In February 2016, the Supreme Court set aside a lower-court decision that had overturned the conversion of a branch of an industrial union into an independent enterprise union. See Case No. 2012Da96120 (Sup. Ct. Feb. 19, 2016).
A branch (the "Valeo Electric Systems Branch") of the Metal Workers' Union, an industrial union, had converted itself into an enterprise union (the "Valeo Electric Systems Union") through a resolution of its general meeting. The Metal Workers' Union had filed a lawsuit seeking a declaration that the resolution was invalid, because withdrawal from the Metal Workers' Union by means of a general meeting is not permitted by the union's rules.
Prior precedents have recognized that a labor union is allowed to change its form based on a general meeting's resolution if it is itself an enterprise union; or if it is a branch or chapter of an industrial/regional/occupational labor union with the ability to independently undertake collective bargaining or enter into a collective bargaining agreement in connection with matters specific to its organization or members. In addition, it should have its own regulatory and enforcement body, and act as an independent group.
Based on those precedents, the initial trial and appeal both ruled in favor of the Metal Workers' Union, declaring that the union's rules did not allow the Valeo Electric Systems Branch to engage in independent decision-making contrary to the intent of the Metal Workers' Union. The Valeo Electric Systems Branch was not an independent union, as wage negotiations and collective bargaining were carried out at the level of the Metal Workers' Union.
However, the Supreme Court decided to expand the established principles governing the change of a union's form, holding that, "If a subgroup of an industrial union or a branch of an industrial union satisfies one of the following conditions, it may change its form to an enterprise union: The industrial union's subgroup or branch (1) has the ability, similar to an enterprise union, to independently undertake collective bargaining or enter into a collective bargaining agreement; or (2) operates essentially like an unincorporated workers' association that has its own regulatory and enforcement body, and acts as an independent group, even though it may not have the ability to undertake collective bargaining or enter into a collective bargaining agreement."
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