Paper local

A paper local is a local union with no or few members, chartered by an existing union (usually an international or national union body) or self-chartered, and formed for the purpose of criminal activity. As implied by the name, paper locals often "exist only on paper", and have no members. In some cases, however, paper locals may have members, but the members are not workers but rather friends, family members, or criminal associates of the individual or individuals in control of the paper local.

Although paper locals may occur wherever labor unions are given formal, legal status and rights, they have been a particular problem in the United States. Paper locals are denounced by the AFL-CIO Code of Ethical Practices.

Paper locals are often used as a means of extorting money. The individual who controls a paper local may threaten to unionize an employer's workers unless he receives a payoff. The paper local may even list the workers at a worksite as "members" and accept the payment as "union dues", when in fact the workers have not consented to forming or joining the union, have not paid dues, and do not receive the benefits of collective bargaining. In at least one case, a paper local based its extortion fee not on the number of workers an employer had but the number of coin-operated machines it had installed in local businesses.

Paper locals often enter into sweetheart contracts that are grossly unfair to workers, and then the employer and paper local embezzle money from the business. While a legitimate union contract might cost X amount of money in wages and benefits, the sweetheart contract costs much less; the difference is split between the individual(s) who control the paper local and the company owners. In one infamous example, a paper local and an employer entered into a sweetheart contract in which workers were able to take only one holiday off each year, Passover. Since the workers were almost all Puerto Rican and non-Jewish, they did not take the holiday off and the employer was not forced to pay workers for a day off.

When a paper local is controlled by organized crime, the paper local may also accept bribes in order to guarantee that there will be no strikes, grievances, or work stoppages (e.g., "labor peace"), or it may intimidate, coerce, vandalize, or sabotage the employer's competitors in order to protect the employer and a lucrative contract. This can create distinct competitive advantages for the employer, which can be higher than the bribes paid.

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