NOW COME the plaintiffs, Briggs & Stratton Corporation, John Shiely, George Thompson, III, and Thomas Krukowski, by their attorney, Robert E. Sutton, S.C., and for a complaint against the defendants show to the Court as follows:
1. The plaintiff, Briggs & Stratton Corporation, is a Wisconsin corporation and at all times material herein was involved in the manufacturing business with offices located at 12301 West Wirth Street, Wauwatosa, 53222 and was a citizen of the State of Wisconsin.
2. The plaintiff, John Shiely, is an adult and at all times material was employed as an officer by Briggs & Stratton Corporation and maintained offices at 12301 West Wirth Street, Wauwatosa, Wisconsin 53222 and was a citizen of the State of Wisconsin.
3. The plaintiff, George Thompson, III, is an adult and at all times material was employed by Briggs & Stratton Corporation and maintained offices at 12301 West Wirth Street, Wauwatosa, Wisconsin 53222 and was a citizen of the State of Wisconsin.
4. The plaintiff, Thomas Krukowski, is an adult and at all times material was an attorney and maintained offices at 7111 West Edgerton Avenue, Milwaukee, Wisconsin 53220 and was a citizen of the State of Wisconsin.
5. The defendant, National Catholic Reporter Publishing Company, is a corporation with offices located at 115 East Armour Boulevard, Kansas City, Missouri 64111 and was a citizen of the State of Missouri and at all times material herein published a newspaper entitled National Catholic Reporter NCR - The Independent Catholic Newsweekly which is distributed throughout the United States and in foreign countries.
6. The defendant, Thomas C. Fox, is an adult and at all times material herein was the Editor and Associate Publisher of the National Catholic Reporter and maintained offices at 115 East Armour Boulevard, Kansas City, Missouri 64111 and was a citizen of the State of Missouri.
7. The defendant, Leslie Wirpsa, is an adult and at all times material herein was the Latin American Editor, Staff Writer for the National Catholic Reporter and maintained offices at 115 East Armour Boulevard, Kansas City, Missouri 64111 and was a citizen of the State of Missouri.
8. The defendant, Chris Curry, is an adult and at all times material herein was employed as a reporter and graphic artist with the National Catholic Reporter and maintained offices at 115 East Armour Boulevard, Kansas City, Missouri 64111 and was a citizen of the State of Missouri.
9. In the December 2, 1994 edition of the National Catholic Reporter the defendants caused to be published a cover page captioned ADIOS, AMERICAN DREAM, an editorial captioned Inside NCR, and an article captioned "Briggs & Stratton layoffs tear family hopes Profit-boosting action includes move to Mexico." A copy of the cover page, editorial, and article are attached hereto and made a part hereof marked Exhibit 1. The editorial signed by Tom Fox captioned Inside NCR contained false and defamatory statements concerning the plaintiffs, Briggs & Stratton Corporation, John Shiely, George Thompson, III, and Thomas Krukowski, as follows:
Paragraph 1
"This week's cover story shows with stunning clarity how corporate decisions hurt ordinary people and what they reveal about decisionmakers who live in either denial or moral blindness."
Paragraph 3
"What makes this week's story on Briggs & Stratton particularly painful is that among the decisionmakers involved - among those seemingly blind to the consequence of their choices - are Catholics educated in Catholic institutions."
Paragraphs 4, 5, 6, and 7
The defendant, Thomas C. Fox, goes on to enumerate six moral principles outlined in the U.S. bishops 1986 pastoral letter on Catholic social teachings and the United States economy directly and falsely accusing the plaintiff of violation of those six moral principles.
10. The article entitled Briggs & Stratton layoffs tear family hopes contains false and defamatory statements concerning the plaintiffs, Briggs & Stratton Corporation, John Shiely, George Thompson, III, and Thomas Krukowski, as follows:
Paragraph 8 - first page of the article
"Repeated pleas from community and church leaders have gone unheeded - Briggs announced in May that it will go ahead with plans to move 2,000 more jobs out of Milwaukee. According to union officials, the company has 'illegally' expanded its Mexico plant...."
Paragraph 10 - last page of the article allegedly quoting Bruce Colburn, the Secretary-Treasurer of the Milwaukee County Labor Council:
"The model of competition will become the maquiladora factories (along the Mexican border), where there are no laws, no environmental standards, no regulation of child labor, Colburn said."
Paragraph 12 -last page of the article quoting union leader Pepe Oulahan:
"Once you get over the anger about how exploited the workers are down there...the conditions are terrible. People come home from the Honeywell and Briggs and Stratton plants to cardboard homes. Their kids have no shoes. Their bosses exploit them. It's disgraceful to see U.S. companies doing this. They tote a propaganda line that is good for Mexico, but there is no way to justify that kind of suffering."
Paragraph 13 - last page of the article quoting Vicki Black, a Briggs & Stratton worker:
"We are told they hire women there because it's said (the women) are not rebellious and are submissive...They have done research into this to find ways to screw people. Knowing that makes you very mad."
Paragraph 4 - first page of the article:
"In the late 1980s, the O'Halloran's dream began to turn into a nightmare of anxiety. Motivated by a new profit-charged management strategy and the advent of free trade, Briggs & Stratton began to accelerate layoffs at its four Milwaukee plants. The company started to move jobs from Milwaukee to lower-wage, higher-profit locations like Poplar Bluff, Mo., and Juarez, Mexico."
Paragraph 25 - second page of the article again quoting Bruce Colburn:
"The basis of our social and moral problems is not having family-supported jobs, Colburn said. 'This impacts huge sectors of society, and the impact is concentrated on minorities and women."'
Paragraph 1 - last page of the article falsely attributing to Briggs Stratton:
"Against the backdrop of the city's overall 8.9 percent unemployment, Milwaukee now lays claim to one of the worst wage gulfs between blacks and whites nationwide."
Paragraphs 15 and 16 - first page of the article:
"CATHOLIC ETHICS?
Briggs worker and union activist Bill Lange said he thinks it is contradictory that many of the executives at Briggs are prominent Milwaukee Catholics who, he believes, have strayed from the social teachings of the church. He says their management strategies disregard tenets outlined, for example in the U.S. bishops' economic pastoral, a document developed under the leadership of Milwaukee Archbishop Rembert Weakland.
Weakland declined to speak to NCR regarding the Briggs & Stratton issues, but he referred a reporter to other diocesan personnel and to Jack Murtog, director of the Milwaukee Interfaith Alliance.
A spokesperson at Briggs and Stratton confirmed that the company's president, John Shiely, is a Catholic and a graduate of Marquette University High School, Notre Dame University and Marquette University Law School.
Marquette is the alma mater of other top players in the controversy, including George Thompson, III, director of public relations and Tom Krukowski, a lawyer hired by the firm to help negotiate a settlement....
The choice of Mr. Krukowski is then derided 'as a sick joke' and he is called "a man long denominated as a union-buster."
Paragraph 6 - first page of the article:
"...The union, United Paperworkers Local 7232, eventually agreed to such concessions as a four-year wage freeze, loss of annual $1,200 profit-sharing payments,...and more."
11. The graphic at the end of the article prepared by the defendants, Chris Curry and Leslie Wirpsa, is false and defamatory in that it asserts that "Briggs & Stratton is discriminating against women, minorities, older workers" and is contemplating elimination of the "remaining jobs of its 5,435 Wisconsin workers and is opting to leave the Milwaukee area" and will thereby cause "more crime, more divorces. People are going to lose what they have."
12. The December 2, 1995 publication was distributed throughout the United States including Milwaukee, Wisconsin.
13. On January 9, 1995 the plaintiffs, George Thompson, III and John Shiely, forwarded a letter "To the Editor of the National Catholic Reporter", a copy of which is attached hereto and made a part hereof marked Exhibit 2 and requested then and have continued to request since that the letter be published by the National Catholic Reporter to present the plaintiffs' rebuttal to the false and defamatory statements in the December 2, 1995 editorial and article. The defendants refused.
14. On February 13, 1996 a demand for correction of the libelous matter was forwarded to the defendants and a copy of that letter is attached hereto and made a part hereof marked Exhibit 3. The defendants have not published a correction.
15. At least one other person who has no affiliation or connection with the plaintiffs of any kind has written the defendants advising them of the false statements and requesting correction thereof
16. The false and defamatory statements set forth in Paragraph 12 above were intentionally published by the defendants with knowledge of the falsity or a reckless disregard for the truth.
17. The publication of the editorial and the article by the defendants and the refusal to publish the plaintiffs' rebuttal of the article or a correction of the libelous statements has caused the plaintiffs and their families to be subjected to ridicule and loss of reputation and esteem within the community.
FIRST CAUSE OF ACTION
18. Publication of the statements constitute defamation of the plaintiffs by the defendants.
SECOND CAUSE OF ACTION
19. The publication and publicity given to the religious affiliation of the plaintiffs, John Shiely, George Thompson, III, and Thomas Krukowski, constitute invasion of their right to privacy as set forth in Section 895.50(2)(c), Wis. Stats.
WHEREFORE, plaintiffs demand judgment against the defendants as follows:
(1) Compensatory damages in an amount to be determined but not less than Ten Million Dollars ($10,000,000.00).
(2) Punitive damages in an amount to be determined but not less than Twenty Million Dollars ($20,000,000.00).
(3) A reasonable amount for attorney's fees pursuant to Section 895.50(1)(c), Wis. Stats.
(4) Costs, disbursements, and whatsoever relief is appropriate.
PLAINTIFFS HEREBY DEMAND TRIAL BY JURY.
Dated at Milwaukee, Wisconsin, this 14h day of May, 1996.
When we were contacted by a representative of the National Catholic Reporter relative to a story on Briggs & Stratton, the following notes were taken by George Thompson, our Director of Corporate Communications and Community Relations: "Slanted story to be written... part of corporate campaign... very rude over the phone... will expect the worst." We refused to participate in our own lynching. Our assessment was correct. The resulting story is without question the most mean spirited and inaccurate account we have seen to date. We are shocked that a periodical which includes the word "Catholic" in its masthead could engage in such libelous attacks on our company and management, and exhibit such a fundamental lack of fairness. But we feel we are in good company. In an earlier issue, NCR published an allegation that the Vatican was guilty of heresy.
Your readers should understand that the radical elements who assumed leadership of our union local in 1983 have been conducting a concerted negative "corporate campaign", the purpose of which is to insult and harass the company and its management. Unfortunately, some media sources like NCR are predisposed to support this campaign.
One of the more disingenuous aspects of the NCR article is that the interviewed individuals you identify simply as "workers" are in fact mostly union officials and activists connected with the radical element. For example, Mr. O'Halloran identified as a "blue-collar worker" is the alternative grievance representative in our castings division. Ms. Black identified as a "Briggs & Stratton worker" is a union trustee. Both have identified themselves with the radical element which is attempting to sustain the corporate campaign. Why wouldn't NCR be interested in interviewing some "real" employees?
Let us give you a sampling of the misrepresentations and half truths that are being perpetuated by the radical element of the union and media sources who are predisposed to believe these things:
1. Allegation: "The union, United Paperworkers Local 7232, eventually agreed to such concessions as...loss of annual $1,200 profit sharing payments."
Fact: The union agreed to drop the $1,200 guaranteed profit sharing payment, which was not based on profits at all. However, due to our financial success, actual profit sharing payments to our union employees in 1994 totaled $20.6 million, for an average of $3,852 per employee- over three times the old guarantee! True performance based compensation works.
2. Allegation: Ellen Bravo, as executive director of 9 to 5, National Association of Working Women, apparently in support of union officials who have made similar charges stated: "Since women and people of color were hired only late in the game at Briggs, they bear a disproportionate share of the job losses." The union has advanced the argument that this is a civil rights issue.
Fact: Our union workforce is currently composed 42.5% of women and 17.7% of minorities. We asked our human resource department to calculate those percentages, assuming that the 2,000 least senior employees are taken out (the anticipated number of jobs to be lost). In fact, the percentages of women and minorities rises to 46.4% and 18.0%, respectively. Briggs & Stratton has a long history of inclusive hiring practices in its factories.
3. Allegation: The Milwaukee Journal reported on November 25, 1993 that "The union says that workers here have fallen behind, having received only two wage increases between 1983 and 1993, each totaling only 2%." This statement is apparently intended to invite the conclusion that these employees are underpaid and that their pay rose only minimally in that period.
Fact: We had our accounting department perform a compensation calculation of our union employees for that 10 year period. While contractual general wage increases totaled 4%, actual W-2 compensation for that period rose 30.9% due to a number of factors including profit sharing and increases attributed to increased seniority. Average annual pay for our union workers is very good. In 1993, average annual pay was $36,600 which is 23% higher than the average annual pay for manufacturing workers in Wisconsin, 59% higher than the average annual pay for all Wisconsin workers and 41% higher than the national average annual pay for all workers.
These are only a few examples of the kinds of distortions and misrepresentations that are being advanced as part of the corporate campaign.
So what is really happening here? We will try to give your readers some insights on how this developed chronologically.
On July 8, 1993, a letter was sent to the union president inviting him to begin mutual gains bargaining with us under the supervision of the Federal Mediation and Conciliation Service, with the goal of achieving a new progressive labor agreement by the end of 1993.
On August 20, 1993, we announced that we would be assigning employees to new "focus factory," departments. The focus factory initiative was a commitment by the Company to invest $20 million in order to accomplish productivity and cost improvements to help make our Milwaukee operations more competitive and attempt to save Milwaukee jobs.
The union leadership objected to the focus factory departmental classifications and conducted an illegal slowdown which caused a multimillion dollar loss to the corporation and significant loss of wages to their own union members. On November 5, 1993, U.S. Federal District Court Judge Thomas J. Curran issued an injunction against the union local. On November 8, 1993, three employees, including a union official, were discharged for their role in the illegal slowdown.
On October 25, 1993, we outlined the economic considerations for potential facilities relocations outside of Milwaukee, and again invited union leadership to address the issue through a mutual gains process.
At a meeting on November 14, 1994, union leadership convinced the membership that the union should reject any "early talks" with the Company.
On November 23, the Business Improvement Teams in our small engine division were suspended due to intimidation of participants by union leadership.
On December 13, 1993, we addressed the issue of the developing corporate campaign with our employees.
On March 29, 1994, arbitrator Robert J. Mueller ruled that the Company had the right to change departmental classifications to support the focus factories. This was the issue that precipitated the illegal slowdown: "The evidence persuades the arbitrator that the change itself to focus factories was clearly based on legitimate business considerations. It clearly served to reduce the costly inventory of parts by going to a "just in time" manufacturing system. The change in manufacturing procedure is clearly justified".
On May 17, 1994, we announced the establishment of new facilities outside of Milwaukee, which would affect approximately 2,000 Milwaukee area workers, beginning in mid-1995.
You will note that there are a few rather critical developments here of which either the union leadership failed to inform NCR, or NCR intentionally neglected to print.
You should also understand that while we are currently profitable, we lost $20 million in 1989. We face intense domestic and foreign competition and the "mass marketization" of our product by discount retailers. The price of our Classic lawnmower engine went up by only 3% from 1982 to 1992, while the CPI went up 43%. The prospect of unproductive and uncompetitive Milwaukee operations is a significant threat to the viability of this enterprise.
Let me address the ethical issues raised by these developments. Our basic management philosophy at Briggs & Stratton is an other-directed approach we call "Managing for Value Creation." The thesis which supports our philosophy is that our capital providers have a legitimate demand for a cost of capital return. That can be achieved only through superior value creation. And real value creation requires an integrative process of engaging our four non-capital providing corporate constituencies (employees, customers, suppliers and community) in mutually enabling relationships toward the end of creating value.
We are persuaded by the model for ethical business practice called the "covenental ethic", developed by Laura Nash, senior research associate at Boston University's Institute for the Study of Economic Culture and adjunct associate professor at the Boston University Graduate School of Management. Ms. Nash espouses the view that capitalism is at heart a voluntary social contract between the public and business to fulfill certain mutually beneficial obligations. The covenental ethic holds that "The chief goal of business is the creation and deliverance of value to a voluntary or democratically controlled marketplace. Concomitantly, it is the obligation of the marketplace (via buyers and the law) to see to it that business receives a fair return for such provision of value. The model discards the inconsistent notion that no matter how valued a business decision might be it cannot be considered ethical as long as profit is made." The covenental ethic has four attributes:
Purpose: Create Delivered Value
Contract: Receive a Beneficial Return in Exchange
Driving Assumption: Service to Others
Primary Means: The Creation of Mutually Enabling Relationships
Any ethical model must be supported by norms and the values that underpin those norms. The values supporting the covenental business ethic, called the "hallmarks of business integrity" are:
Honesty: Accuracy in assessing and representing the business and any activity relevant to a business
Reliability: Being consistent in action with one's purported values
Fairness: Balancing the rights of various constituencies with consistency and goodwill
Pragmatism: Making concrete contributions to the ongoing financial and organizational health of the business
I would submit that we have been consistent with these values in our handling of the facilities relocation matter. We informed our employees of relevant economic considerations and their need to be part of the decision making process months before the decision. Union leadership convinced them to reject our invitation. We announced the relocations more than a year before significant job losses would occur in order to allow them time to prepare. We offered significant outplacement, retraining, severance pay and pension supplement arrangements. We have said what we meant and done what we said. Our focus on mutually enabling relationships with our corporate constituencies supports consistency and goodwill in those relationships. And we have disclosed and addressed the pragmatic aspects of the threat of global competition and mass marketization of our product to the ongoing financial and organizational health of the business.
We believe these actions were also entirely consistent with the approach recommended in the National Conference of Catholic Bishop's Pastoral Letter Economic Justice For All. Paragraph 303 provides that when companies are considering plant closures or the movement of capital: "As a minimum, workers have a right to be informed in advance when such decisions are under consideration, a right to negotiate with management about possible alternatives, and a right to fair compensation and assistance with retraining and relocation expenses should these be necessary." But this should not be surprising. Good ethics is inevitably good business.
We do not believe that any ethical or moral construct (including the Bishop's Pastoral Letter) requires that Briggs & Stratton resign itself to the scrap heap of failed American corporations. Is there economic justice in the demise of Allis-Chalmers (another historically large Milwaukee employer) and its inability to pay promised pensions to its retirees?
Managing for value creation strongly supports value-creating partnerships with workers where they can be found. We have very high value partnerships with our employees in Murray, Kentucky and Poplar Bluff, Missouri. To date the Milwaukee union leadership has actively sought to oppose such partnerships. And yet they engage in a kind of"moral imperialism" in their challenges to our business ethics.
At Briggs & Stratton, we have been working hard to promote the sense of self-esteem, achievement, growth and confidence that flows from a culture of empowerment and earning. The leadership of Local 7232 has variously promoted the unproductive psychologies of entitlement and fear. We have heard through several sources that the more mainstream and progressive labor leaders in Milwaukee privately view the radical Local 7232 leadership as being distinctly inept and mindlessly confrontational.
Our moral stewardship has been placed in question, and I think we have adequately addressed that. We might review the social responsibility of the leadership of Loca1 7232.
At Paragraph 304, the Bishop's Pastoral Letter wisely states that: "The purpose of unions is not simply to defend the existing wages and prerogatives of the fraction of workers who belong to them, but also to enable workers to make positive and creative contributions to the firm, the community, and the larger society in an organized and cooperative way." Local 7232 leadership has not only failed to support productivity partnerships like the Business Improvement Teams, but has intimidated those union members who have chosen to do so. As Fred Stratton, our Chief Executive Officer has said: "This leadership prevents its members from participating in the kinds of organized productivity improving processes that have become so effective at our other plants, productivity improving processes that could help offset the wage and benefit differential, productivity improving processes that give people the opportunity to develop the problem solving skills that Labor Secretary Robert Reich believes will be in great demand in the 1990's."
Where is the human dignity in the berating of employees who participate in the kinds of management/employee partnerships encouraged in Chapter IV of the Bishop's Pastoral Letter under the heading "A New American Experiment: Partnership For the Public Good?"
The Bishop's Pastoral Letter at Paragraph 69 discusses the principle of commutative justice: "Commutative justice calls for fundamental fairness in all agreements and exchanges between individuals or private social groups... For example, workers owe their employers diligent work in exchange for their wages." Where is the commutative justice in the union leadership's sponsorship of an illegal slowdown?
It has been contended that jobs are being lost because Briggs management wants even higher profits for corporate owners, apparently inviting the dated characterization of these owners as rich folks. A phenomenon which was ongoing during the drafting of the Bishop's Pastoral Letter, and continues unabated today, should be a consideration in any discussion of economic justice, and that is the enormous growth in private pension funding. While in 1970 only 19% of the stock of American companies was owned by institutional investors, by 1993 nearly 50% of the stock of America's large businesses was held by institutional investors. In fact today, about 70% of Briggs & Stratton shareholders are institutional investors. Institutional investors are largely pension trusts, mutual funds and others providing retirement security to millions of working people. For example, the California Public Employees Retirement System alone controls $80 billion in pension investments. In order to provide that retirement security, these institutional capital providers must achieve a minimum return - the cost of capital. So simply being "profitable" in the accounting sense is not enough. Would our employees be happy with a 1% return on their retirement savings or mutual funds?
Union leadership and company management must work together in the future to develop solutions to save as many of the higher paying Milwaukee jobs as possible and at the same time provide economic returns adequate to insure retirement security for many thousands of pensioners and mutual fund investors who count on us.
There is hope. In the recent elections for president of the union and members of the executive board, Candace Schultz ran her presidential campaign in opposition to the radical leadership. Her campaign literature read: "A STRONG UNION IS ONE WHO WORKS WITH THE COMPANY FOR THE WORKERS!!! CONFLICT BREEDS CONFLICT!!!"
On December 9th, Ms. Schultz won the election, and her slate of candidates won a majority of the positions on the executive committee. The new group took office on January 2nd. A Milwaukee Journal article entitled "Union Vote Ousts Leader Considered Militant" on December 10, 1994 stated that: "Schultz said she had decided to run out of the belief that "there should be a change" in top union leadership in hopes of mending poor union - management relations". The union's strident tactics with the company "didn't work", she said. "We lost thousands of jobs." In a Milwaukee Sentinel article on December 12th, Ms. Schultz stated "I think the direction we have been going in is not progressive thinking for the 1990's."
So how does NCR feel about having based an entire article on the negative corporate campaign of a now ousted militant leadership?
Your indictments of Briggs & Stratton and its management were misguided and extraordinarily cruel. The Bishop's Pastoral Letter at Paragraph 135 states that: "We believe that differences on complex economic questions should be expressed in a spirit of mutual respect and open dialogue."
Don't you owe us an apology?
Sincerely,
/s/
George R. Thompson III
Director of Corporate Communications and Community Relations
