Lake Michigan Credit Union fires employee who formed labor union | Credit Union Journal

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It was a normal Wednesday morning for Ivan Diaz, a member service representative at Lake Michigan Credit Union in Caledonia, Michigan, when the manager of the South Division Avenue branch and the credit union’s senior vice president of retail walked into his office and told him he was fired.

Diaz, who helped lead the location’s campaign for unionizing frontline staff as the LMCU Workers Alliance in December and the subsequent election in association with the Communications Workers of America in January, was terminated from his role with the $11.9 billion-asset institution on Feb. 1 for “repeated acts of serious misconduct in violation of [LMCU] policy and procedure, including a direct violation of LMCU’s dual control policy, new account and customer identification program procedures … as well as failing to follow instructions and engaging in acts of insubordination toward his manager,” according to the termination letter he received from the credit union.

In response to the list of grievances against him, Diaz quickly met with CWA representatives and began the process of filing Unfair Labor Practice charges against the credit union through the National Labor Relations Board, alleging that he was fired for his role organizing the Workers Alliance. If the credit union is found in violation of the National Labor Relations Act, Diaz could potentially receive back pay and reinstatement to his job. 

The dispute highlights the difficulties financial institutions can run into when employees choose to unionize. The law prevents companies from retaliating against workers because of their union affiliation, prohibiting threats of job and benefit loss, punishment for staff participating in union-related activity and other similar behavior

Data from the NLRB showed that employers were charged with violating federal labor law in roughly four out of every ten union elections between 2018 and 2022, according to research conducted by the Economic Policy Institute, a nonprofit think tank in Washington D.C.

“It’s clear to us, and we think the evidence will bear it out, that [Ivan] was terminated regardless of whatever pretext [LMCU] claims that he violated policies or anything. … Really, it was retaliation for him being one of the leaders in successfully organizing a union with his coworkers at their branch,” said Nick Weiner, co-director of the Committee for Better Banks campaign founded by the CWA. 

Members of the Lake Michigan Credit Union Workers Alliance showing solidarity prior to the successful election in January. “I hope that our state and federal lawmakers are paying attention not only to this, but to other circumstances throughout the country, and that they’re doing everything that they can to update our worker protection and organizing laws,” Diaz (far right) said.

Lake Michigan Credit Union Workers Alliance

The credit union said allegations that it fired Diaz because he helped organize the branch’s workers are “unfounded” and maintained that it will “respect the rights of employees to organize, and we look forward to a productive relationship with the union recently formed at one of our branches,” according to a prepared statement.

But an internal letter verified by American Banker to have been written by Nora Swart, senior vice president and chief people officer for LMCU, suggests a more contentious relationship with the union.

Swart sent the letter to employees of the credit union’s South Division Avenue branch in December after executives learned of the Workers Alliance’s intent to organize. In her letter, Swart expressed her concern that the employees were under-informed on the possible negative effects a union could have, and that Diaz was leveraging the advocacy group as a political tool “to advance in the Democratic party.”

“If unionizing was such a great thing, almost all employers would have unionized workforces. … They don’t [and] in fact, very few private employers like LMCU have a unionized workforce,” Swart said. “I ask you to trust in our direct relationship with you and vote against union representation.” Current and former LMCU employees confirmed that Swart sent the letter. LMCU did not respond to questions about the letter. 

Staff within the credit union have stressed that since the Workers Alliance was announced, tensions between upper management and frontline workers have led to heightened scrutinization of day-to-day operations and fears of possible layoffs.

“Ever since the announcement of the Workers Alliance, and the letter that was sent to the CEO, it’s been very obvious that [management] is looking at every single little thing we do under a microscope, just waiting for us to trip up and miss something …  in order to use that as an excuse to retaliate against us so that they can have a reason to, without just doing it because of the union,” said an employee of the credit union who requested anonymity out of fear of retaliation. 

At other financial institutions, employees trying to unionize have had less trouble. Executives at both the $39 million-asset Genesee Co-Op Federal Credit Union in Rochester, New York, and the $1.6 billion-asset Beneficial State Bank in Oakland, California, voluntarily recognized their employees’ union efforts and avoided an NLRB election. 

For workers laid off without the protections of union backing, there are additional challenges when seeking possible remedies.

Allyssa Zamarripa, a former assistant branch manager for LMCU’s South Division Avenue location, stressed the importance of due diligence to her employees contemplating the union prior to its launch, and responded to Swart’s letter by recommending they support the campaign advocating for better working conditions — which she alleges led the credit union to fire her as well in on Jan. 20.

“It’s been really hard to hear the things that this company has had to say about my friend [Ivan], so I told my coworkers my opinion that you [should] do your research and I highly recommend that you stand by the people that are willing to advocate and fight for you,” Zamarripa said. “The day I was fired, I was told I no longer shared the same values of senior leadership.”

Legal experts with law firm Howard and Howard in Royal Oak, Michigan, emphasized that the law’s requirements for firing an employee are more intense than they appear on the surface and place a sizable burden of proof on the companies.

It is essential that employers show a trend of negligent behavior on the part of the employee prior to terminating them as reasonable evidence against any claims of bias, according to Jessica Chang, a counselor and attorney specializing in labor and employment for Howard and Howard.

“People misunderstand at-will employment in the sense that you could be fired for anything, which is true to a certain degree, but in reality terminating an employee takes a long time. … The timing is really, really off, but that’s up to them to show” that they have a solid basis for termination, Chang said.

Both Diaz and LMCU have been notified that the charges filed will be investigated by an NLRB agent, who will gather evidence from both sides of the dispute and present and allow the regional director to determine whether or not the burden of proof has been met, according to NLRB procedures and filings

“I hope that our state and federal lawmakers are paying attention not only to this, but to other circumstances throughout the country, and that they’re doing everything that they can to update our worker protection and organizing laws. … It happens way too often, there’s not enough penalties out there for companies that engage in anti-union behavior and violate federal law,” Diaz said.

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