Tensions Flare Up Between Union and Liquor Commission, And Not For The First Time

Jun 7, 2018

A long-festering dispute between New Hampshire Liquor Commission management and the union employees who staff the state-run stores erupted in front-page headlines this week.

On Sunday, the state’s largest union, the State Employees Association, released a campaign-style attack ad accusing the New Hampshire Liquor Commission of being complicit in potentially illegal all-cash sales to “bootleggers.” The ad calls for new management of the agency.

The Liquor Commission, which oversees the state’s 79 retail liquor stores, wasted no time firing back, saying the SEA’s messaging was little more than a “well-orchestrated” charade.

It was the latest flashpoint in a months-long dispute about how state liquor stores handle large all-cash sales, many involving out-of-state customers who allegedly resell the liquor back home.

The union contends the commission is turning a blind eye to potentially illegal transactions, exposing employees, who are often handling tens of thousands of dollars in cash, to personal risk. The commission refutes those allegations, pointing to policies that it says adhere to all federal financial reporting rules.

The N.H Attorney General is investigating the issue, which has also caught the attention of the Internal Revenue Service.

On Wednesday, Governor Chris Sununu waded into the spat, trying to ease tensions while acknowledging the back-and-forth allegations.

“You have to maintain, even though you might disagree, you want to maintain a cooperative spirit,” Sununu said. “The state employees union and the Liquor Commission, or any other department, there is a long term-relationship that has been there, and there is a long-term relationship that is going to remain.”

This isn’t the first time that cooperative spirit, however, has been tested.

History of Bad Blood: An Earlier Fight

In 2012, the State Employees Association filed an unfair labor practice complaint against the Liquor Commission over alleged “discriminatory actions” against several union stewards, including current SEA president Richard Gulla -- the man now leading the charge against Commission management.

The 2012 case, which would take 16 months to wind its way through the Public Employee Labor Relations Board, culminated with a partial victory for the union.

In its filing, the union asserted that the Liquor Commission took punitive actions against a veteran employee named Cynthia Sanborn-Dubey, who served as a union steward for more than a decade. After management became aware that Sanborn-Dubey was attempting to organize a “stewards day,” she was transferred from the retail outlet in Glen to a liquor store in Lincoln approximately 50 miles away. Sanborn-Dubey was given two days notice of the transfer and was initially told she wouldn’t qualify for mileage reimbursement.

In her ruling, the hearing officer wrote that the transfer “was made in retaliation” for her union activity, and that the state “committed an unfair labor practice” in violation of state law.

However, complaints involving two other union members were dismissed, including one surrounding the treatment of Gulla.

"You have to maintain, even though you might disagree, you want to maintain a cooperative spirit." Gov. Sununu

Gulla’s allegations surrounded his need for extended medical treatment related to diabetes. After several months of medical leave, management notified him that it intended to “initiate a non-disciplinary dismissal” because of an inability to perform his job. Soon after, Gulla was cleared by his physician and went back to work, but faced a delay in receiving pay.

The state’s interactions with “Mr. Gulla leave a lot to be desired,” wrote the hearing officer. However, the officer found that there was insufficient evidence to show that Gulla’s treatment was linked to his union activities.

The IRS, The AG, and Alleged "Bootlegging"

Gulla, who was elected SEA president in 2014, is a central figure in the current dispute regarding large all-cash sales.

He, along with Executive Councilor Andru Volinsky, say they personally witnessed a potentially illegal transaction inside the Keene liquor store in early February. Volinsky and Gulla watched as a customer divided a large transaction into three smaller transactions to avoid having to file an IRS form, which is required for cash transactions in excess of $10,000.

Later that month, Volinsky sent a letter to Governor Sununu citing his concerns about the legality of these bulk all-cash transactions. He called for an investigation by the Attorney General, which is currently underway.

The large cash sales included major purchases of Hennessy cognac, according to New Hampshire documents.
Credit Lauren Chooljian / NHPR

Volinsky says he first learned about these transactions while attending a September 2017 union meeting. Shortly thereafter, Volinsky contacted the commission requesting information about its policies surrounding large cash sales, receiving documents in return.

On January 31st of this year, Volinsky attended another union meeting where the same concerns about liquor store employee safety and the legality of these transactions were raised. Volinsky requested to see a large transaction for himself, and on the morning of February 3rd, he spent several hours inside the Keene store.

The employee who completed the February 3rd transaction, Garrett Boes, was voted SEA “member of the year” in 2017.

Boes was fired by the commission in late February for allegedly violating store policies related to handling large cash transactions. Volinsky and the union argue that Boes deserves “whistleblower” protection.

The union also contends that the commission’s firing of Boes is a steeper disciplinary action than previous employees have received for violating the large volume sales policy.

Boes has filed a claim with the state’s Personnel Appeal Board, with a hearing scheduled for later this year. As in the 2012 case, the union has also filed an unfair labor practice complaint against the commission, arguing that “if it were not for Mr. Boes’ union activity, he would not have been terminated for his alleged misconduct.”

Strife Within the Union

Rank and file members of the state employees’ union, however, are not all in agreement with how the SEA is handling the current dispute with the commission.

In its statement earlier this week, the Liquor Commission writes that the campaign-style ad released by the SEA is designed to “distract from the growing employee unrest with SEA leadership.”

Two days later, that unrest surfaced when Ron Bilodeau, a store manager at a Manchester liquor store, circulated a petition citing his “dissatisfaction” with Gulla.

“Over the past several months, N.H. State Liquor Commission employees have had an unjust and unprofessional position thrusted upon us by actions from our union president,” writes Bilodeau.

Bilodeau, who has worked for the commission for four years and is an SEA member, is requesting a meeting with Gulla to discuss his concerns. Reached by phone Thursday, Bilodeau said he hasn’t yet heard from union leaders about his concerns, but had received several calls of support from other state liquor store employees.

Gulla didn’t immediately respond to a request for comment. It isn’t clear how many employees have signed the petition, or when a meeting may take place.