UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
X
UNITED STATES OF AMERICA,
Plaintiff, 90 Civ. 5722 (CSH)
-against-
MEMORANDUM OPINION
DISTRICT COUNCIL OF NEW YORK CITY AND AND ORDER
VICINITY OF THE UNITED BROTHERHOOD OF
CARPENTERS AND JOINERS OF AMERICA, et al.,
Defendants.
X
Haight, Senior District Judge:
In this civil RICO action against a labor organization, the government moves for an order
holding the organization and its president in contempt of a consent decree previously entered in the
case. The question presented is whether collective bargaining agreements entered into by the labor
organization with employers violated the consent decree.
I. BACKGROUND
A. The Complaint
On July 16, 1991 the government filed a Supplemental Complaint ("the Complaint") against
the District Council of New York City and Vicinity of the United Brotherhood of Carpenters and
Joiners of America ("the District Council" or "the Union"), four present officers of the District
Council, three former officers, and six individuals alleged to be active in organized crime. The
Complaint's Preliminary Statement asserted: "For at least twenty years, the District Council has been
infiltrated by corrupt individuals and organized crime figures who have exploited their control over
the District Council for personal gain." Complaint ¶ 1. The government invoked the RICO statute
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"in order to put an end to this corrupt control of a labor organization." Id.
The Complaint then set forth detailed factual allegations in support of the government's
preliminary assertions. With respect to collective bargaining agreements and hiring practices, the
Complaint alleged that "[t]he District Council is the central governing body of the carpenters union
in the New York City area, and has supervisory powers on all matters relating to its Local Unions.
Collective bargaining agreements in the New York City area are entered into between employers on
the one hand and the District Council on the other." Id. ¶ 18. The officers of the District Council
"have converted the collective bargaining agreements into tools of extortion." Id. ¶ 19. "Union
officers have abused the hiring hall system, rewarding their associates and punishing dissident union
members." Id. ¶ 77(e). "The members have been deprived of the effective enforcement of the
applicable bargaining agreements. The members have also been prejudiced by losing job
opportunities and by the increased productivity burden arising from the no-show jobs given to
¶
The Complaint prayed for a preliminary injunction and for the appointment of "one or more
court liaison officers, pendente lite, whose responsibilities would inter alia include the following:
" . . . (B) To review the proposed actions of the officers of the
District Council insofar as they relate to expenditure of union funds,
appointments to union positions, contracts or proposed contracts
other than collective bargaining agreements, or changes in the union
constitutions or by-laws, and to petition the Court for an order
restraining any such proposed action or to obtain any other
appropriate relief which is reasonably necessary to protect the rights
of District council members, consistent with the relevant constitutions
and by-laws.
Complaint, page 56, ¶ (a)(1)(3) (emphasis added).
The Complaint also prayed for a permanent injunction providing, inter alia, that the Court
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would appoint a trustee(s) for the District Council who, until such time "as free and fair elections"
of District Council officers can be held, would be empowered to "discharge any of the duties and
responsibilities of the District Council (other than negotiating and entering into collective
bargaining agreements) when the trustee deems it necessary to protect the rights of the members of
the District Council . . . " Complaint, page 58, ¶ (d) (emphasis added).
B. The Trial
A bench trial began on September 13, 1993. The United States Attorney's office for this
district represented the government. Separate counsel appeared for the District Council, two present
Council officers and one former one, and one other individual defendant.
Counsel were invited to make opening statements. Assistant United States Attorney Thomas
A. Zaccaro opened for the government by saying this:
The evidence in this case will reveal a widespread and persuasive
[thus in the trial transcript; probably should read "pervasive"] pattern
of corruption and racketeering in the New York City District Council
of Carpenters, one of the largest and most powerful construction
unions in New York, if not the country.
The government will prove that for the last two decades organized
crime has exercised substantial influence over this union. Members
of La Cosa Nostra have used this union to extort payoffs from
contractors, to obtain favorite [probably should read "favored"]
treatment for mob controlled companies and to reward themselves
and their associates.
Union officers have not only tolerated organized crime influence in
the union but they have welcomed it, appointing members of La Cosa
Nostra to powerful union positions.
The government will also prove that union officers have routinely
accepted illegal payoffs from employers in disregard of their fiduciary
duties and the interests of the members who they are elected to
represent.
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Finally, your Honor, the government will prove that the union
members who have joined this union to protect their economic
destiny have had their fundamental democratic rights to participate in
the affairs of this union extorted by corrupt union officers and
organized crime members.
In sum, your Honor, the evidence will demonstrate that the relief the
government seeks in this case is not only warranted but necessary to
remedy decades of entrenched corruption in this union.
Trial Transcript at 5-6.
After other counsel made opening statements, the government began to call witnesses and
offer exhibits into evidence. The trial continued from day to day through October 18, 1993. By that
time the government had called 21 witnesses from widely different walks of life (some in the
Witness Protection Program). The trial was then terminated because counsel for the parties
announced that they had agreed upon a consent decree which they presented to the Court for
endorsement. I signed that document on March 4, 1994, and will refer to it hereafter as "the Consent
Decree."
C. The Consent Decree
In discussing the provisions of the Consent Decree pertinent to the government's contempt
motion, I will where appropriate use the present tense, because the Consent Decree is still in effect
and, to the extent applicable to particular circumstances, controls the conduct, rights and obligations
of the District Council, its officers, and the government. The Consent Decree also explicitly creates
and implicitly limits the powers of this Court. Federal district courts are courts of limited
jurisdiction. Their powers must be traced to an identifiable source. Usually that source is the
Constitution or a federal statute. In the case at bar, the source is the Consent Decree.
The Consent Decree begins with "Whereas" paragraphs which may be fairly analogized to
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a statement of legislative purpose in the preamble to a statute. They include paragraphs which read
as follows:
WHEREAS, the District Council acknowledges that former
officers and representatives of the District Council and certain of its
constituent locals have been convicted of labor racketeering;
WHEREAS, the parties agree that there should be no criminal
element or La Cosa Nostra corruption of any part of the United
Brotherhood of Carpenters and Joiners of America (the "UBCJA"),
including the District Council and its constituent local unions, ..
WHEREAS, the parties agree that one of the purposes of this
Consent Decree is to ensure that the District Council and its
constituent local unions shall be maintained and run democratically,
and without unlawful influence from outside its membership; . . .
Paragraph 2 of the Consent Decree, captioned "Permanent Injunction against Racketeering
Activity," provides:
All current and future officers, employees and members of the
District Council and its constituent locals are permanently enjoined:
a. from committing any act of racketeering activity, as defined in
18 U.S.C. § 1961;
b. from knowingly associating with any member or associate of La
Cosa Nostra crime family or any other criminal group, or with any
person prohibited from participating in union affairs (hereinafter
collectively referred to as "barred persons"); and
c. from obstructing or otherwise improperly interfering with the
work of the officers described in this decree.
Paragraph 3 of the Consent Decree established the office of an Investigations and Review
Officer ("IRO") and an Independent Hearing Committee in order "to implement the terms of this
Consent Decree." The individuals filling these positions were agreed upon by the parties and named
in ¶3 of the Consent Decree. Kenneth Conboy, a former judge of this Court and now in the private
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practice of law, was appointed as the IRO.
Paragraph 4 of the Consent Decree set forth the powers, rights and responsibilities of the
IRO. I need not recount them all. Two provisions are pertinent to the government's present motion.
Paragraph 4.f., captioned "Review Authority," provides in part that the IRO shall have the authority
to review " all contracts or proposed contracts on behalf of the District Council and its constituent
locals, except for collective bargaining agreements" (emphasis added). Paragraph 4.h., captioned
"Job Referral Procedures," provides in part that the IRO "shall supervise the adoption,
implementation and operation of the job referral rules adopted pursuant to paragraph 5."
Paragraph 5 of the Consent Decree provides as follows:
Job Referral Rules. Within thirty (30) days after the entry of this
Consent Decree, each of the constituent locals shall adopt the job
referral rules and procedures attached hereto as Exhibit A and
incorporated herein (the "job referral rules"). The constituent locals
shall make all job referrals in accordance with the job referral rules
and shall comply with the job referral rules in all respects.
Thus the Job Referral Rules, physically attached to the Consent Decree and incorporated therein by
reference, become a part of the Consent Decree, so that a violation of the Job Referral Rules is ipso
facto a violation of the Consent Decree. Because the Job Referral Rules lie at the heart of the present
motion, I consider them separately.
D. The Job Referral Rules
The Job Referral Rules recite in their introductory paragraph that they were promulgated "to
maintain and administer a processing system for referral of members to employment in a fair and
equitable manner, and to establish records and procedures which will be adequate to disclose fully
the basis on which each referral is made." Again, it is not necessary to recite in full the detailed
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provisions of the Rules. For present purposes it is sufficient to note that Rule 4 provides for union
members to register their availability for referral to a job with their local union, and that "[t]he Local
Union will compile an out-of-work list consisting of the members who have registered their
availability for referral." Rule 5, captioned "Referral Procedure," provides in pertinent part:
A. Members on the out-of-work list shall be referred to jobs in the
order in which they have registered their availability for referral, with
the first registered member referred first, provided that the member
has indicated that he or she has the qualifications requested by the
employer.
B. Requests by an employer for specific members employed by the
employer within the previous six months shall be fulfilled, as
required by applicable collective bargaining agreements.
(emphasis added). The inference to be drawn from this language is that the requirement that a
requested carpenter have been employed by the requesting contractor within the previous six months
had its genesis in collective bargaining agreements predating the Consent Decree, thereafter echoed
by Rule 5(B) of the Job Referral Rules.
It is necessary at this point to revert to the Consent Decree, which provides in ¶ 12 as follows:
Future Practices. The parties intend the provisions set forth herein
to govern the District Council's practices in the areas affected by this
Consent Decree, now and in the future. The District Council shall
give prior written notice to the Government and to the Investigations
and Review Officer of any proposed changes to the By-Laws. In
addition, the District Council shall inform the Government and the
Investigations and Review Officer of any changes in any rules or
procedures adopted or implemented pursuant to paragraphs 4(g), 4
(h), 4(i)(3), 5, 9(c), and 10 of this Consent Decree. For a period of
seven (7) years after the termination of the Investigations and Review
Officer's term of office, the District Council shall continue to give
prior written notice of any such proposed change to the Government.
If the Investigations and Review Officer or the Government objects
to the proposed change as inconsistent with the terms or objectives of
this Consent Decree, the change shall then not occur, provided that,
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upon such objection, the District Council may apply to the Court for
a determination as to whether the proposed change is consistent with
the terms and objectives of this Consent Decree.
As discussed infra, the government bases its contempt motion principally upon the provisions of this
paragraph in the Consent Decree.
E. The Collective Bargaining Agreements Existing at the Time of Entry of the Consent
Decree and the "50/50 Rule"
The government says without contradiction by the District Council that "[u]nderlying the job
referral rules was the '50/50 rule,' found in all of the District Council's collective bargaining
agreements at the time of the [1994] Consent Decree, authorizing the union to assign fifty percent
of the carpenter workforce at a job site (with the company designating the other fifty percent)." Main
Brief at 6.
The consequence of the interaction between the Job Referral Rules and the 50/50 Rule
contained in the collective bargaining agreements ("CBAs") of that vintage is readily apparent.
Since the Job Referral Rules required carpenters to be assigned to jobs from the out-of-work list
("OWL"), and the CBAs allowed the union to assign fifty percent of the carpenters to any job site,
the combined effect was to create a major source of job opportunities for members who had been
seeking work for the longest period of time. That effect was lessened by the provisions of Rule 5(B)
of the Job Referral Rules, which as noted provides that, "as required by applicable collective
bargaining agreements," requests "by an employer for specific members employed by the employer
within the previous six months shall be fulfilled," without regard to how long that carpenter has
been on the OWL. Since carpenters requested off the OWL by an employer for a particular job are
designated as "union" for purposes of the 50/50 Rule and therefore included in the union's fifty
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percent share under the CBA, "requested" carpenters diminished the extent to which the interaction
of the Job Referral Rules and the 50/50 Rule ensured employment for carpenters who had been
waiting the longest on the OWL.
F. The Collective Bargaining Agreements Entered Into in 2001
The CBAs between the District Council and associations of contractors or individual
contractors came up for negotiated renewals in 2001. At that time, the District Council granted a
concession to the associations of contractors that eliminated the requirement that a contractor could
not request the services of a particular contractor on a job unless that carpenter had worked for the
requesting contractor within the past six months. It will be recalled that this requirement was
apparently included in the prior CBAs and was echoed in Rule 5(B) of the Job Referral Rules. At
the same time, during the 2001 negotiations the District Council eliminated from CBAs with
"independent" contractors (that is, contractors who were not members of an association) the ability
to request any carpenter for a particular job. A practical result of the 2001 CBAs was to confer upon
contractors who were members of an association an unfettered right to select all the carpenters on
a job, since under the 50/50 Rule a contractor could select its half of the carpenter work force and,
freed from the six-month previous employment requirement, can now request that the Union furnish
particular carpenters who would make up the other half of the work force that the Union had a
nominal right to select under the 50/50 Rule. A second practical result was that independent
contractors, deprived by the 2001 CBAs of any right to request particular carpenters, now obtain
their carpenter work forces through strict adherence to the 50/50 Rule.
The facts just recited are derived from the testimony of Peter Thomassen, the President of
the District Council, at a hearing before this Court on April 12, 2005, and Thomassen's declaration
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dated October 4, 2005, submitted in opposition to the government's present motion.
The hearing on April 12, 2005 was called to consider an issue not directly related to those
presented by the government's instant contempt motion. In July 2001 a carpenter named Eugene
Clarke filed a complaint with the District Council Executive Committee alleging persistent
violations of the Job Referral Rules, particularly with respect to the selection of shop stewards. The
District Council rejected Clarke's complaint and Clarke filed a separate lawsuit which is presently
pending. However, Clarke's allegations came to the attention of the government and led to renewed
discussions between the government and the District Council, within the context of the captioned
action, about further remedial steps to be taken with respect to the job referral system. Those
discussions culminated in a stipulation and order entered on December 18, 2002, which modified
the Job Referral Rules in certain respects and appointed Walter Mack, Esq., for a two-year term as
Independent Investigator.
As Mr. Mack's two-year term was nearing its end, the District Council gave him a
notification of termination. The government, which had been closely following Mr. Mack's
investigations and reports, took the position that his service as Independent Investigator should be
extended, at the District Council's continued expense, even though the District Council wished to
terminate him. The government moved for that relief and the Court held a hearing on April 12,
2005, at which Thomassen testified.1
During his testimony, Thomassen described the manner in which the 50/50 Rule originally
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1. In an opinion reported at 2005 WL 1137877 (S.D.N.Y. May 1, 2005), the Court held
that the District Council was entitled by the unambiguous terms of the stipulation and order to
terminate Mr. Mack as the Independent Investigator. That ruling and its rationale are not
pertinent to the government's present motion.
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functioned. "New York City is still today the most unionized city in the country," Thomassen said,
"and we're very diligent in trying to keep it that way." Because the unions were strong, they were
able in negotiating CBAs to keep in place work rules that "were restrictive to the contractor." One
of these was the 50/50 Rule, which in Thomassen's paraphrasing "states that half of the members
on a particular job site, if the contractor wants to hire 10 carpenters, according to that rule, he can
hire five of any carpenters he would like, as long as they're union carpenters, of course, and the
other 5, which is the other 50 percent, would come from the union hall." Tr. at 281-82.2
The 50/50 Rule "was good for us," Thomassen testified, " because as our carpenters got older,
maybe they weren't as much in demand as they got older. There is nothing wrong with their brain.
They just didn't work fast. That was our way of letting those members make a living also." Id. at
282. But it was a rule "that the contractors have fought us over in every collective bargaining
agreement going back as long as I can remember." Id. at 283. Thomassen explained why in
answering a question I put to him:
THE COURT: What are the contractors fighting for?
THE WITNESS: The contractors, your Honor, say that they agree to
be a union contractor. I am going to pay all the wages and benefits I
am supposed to pay. All I ask you is to let me hire who I know can
do the job.
Id. And pressure on the District Council to yield to union contractors 3 on this point has been
generated by the recent emergence of nonunion contractors in New York City. Thomassen testified:
______________________
2 I have edited the transcript in minor and non-substantive respects.
3 "Union contractors" in this context means a contractor who is willing to hire only union
labor. They may be contrasted with "nonunion contractors," a phrase that Thomassen also used
in his testimony. Nothing in federal or state labor law requires a contractor to hire only union
members.
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In the 50-50 [Rule], in just looking at it, it looks fair, it looks
democratic, but the reality of it is – and I will put it right on the table
– the reality of it is, if New York City is going to stay a union town,
we have to do everything we can to help our union contractors stay in
business. If we don't help those union contractors stay in business,
we can negotiate the best contracts in the world, but if there is no one
around to employ them, we'll be out of work and the union is going
to go down the tubes in New York City . . . . I mean, walk down the
block anywhere in New York City and you'll find a three or four or
15 story building being built nonunion, which never, ever happened
before . . . . So we have a tiger on our hands, which is the nonunion
entity that is making a move in New York City, and we realize that if
we don't let our companies hire the carpenters who can produce the
work that they bid – they bid a job based on an amount of progress
they're going to make every day on that job. If they don't make that,
at the end of the job and they lose money, they can go out of business.
Part of the request system allows our contractors the latitude to hire
carpenters who they think can perform the job.
Id. at 285-286 (emphasis added). I emphasize the phrase "Request System" (which I also capitalize
in order to place it on a graphic footing with the 50/50 Rule) because its operation and effect lie at
the heart of the present motion.
Thomassen also testified that "the international came up with the requesting system, and that
was a way of getting the contractors a little more latitude in picking who they would have working
for them." Id. at 284. "International" is a reference to the United Brotherhood of Carpenters and
Joiners of America (UBC), the parent union of which the District Council of New York City and
Vicinity is one of several regional entities. In a declaration dated October 31, 2005, Douglas J.
McCarron, the General President of the UBC, opposes the government's contempt motion and states
in part:
I submit this declaration to advise the Court of the UBC's position
with respect to the "request system," pursuant to which signatory
contractors have the right to hire, employ and retain Union carpenters
of their own choice even while certain other carpenters wait for work
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assignments from the District Council's out of work list . . . . The
number one objective of the UBC under my leadership has been the
effort to organize unorganized carpenters and to stem the rising tide
of non-Union carpenters in all areas under our jurisdiction. To
accomplish these objectives, as an institution we have had to
recognize that many of the old ways and practices of the construction
trades had to change. We have to enable our signatory contractors to
successfully compete with their non-Union competition . . . . In this
regard, the UBC recognizes a contractor's right to employ carpenters
of his/her choice and to determine which carpenters will make their
company most competitive in the marketplace. This concept has been
referred to as "full mobility". The UBC is fully aware of past
practices or contract provisions requiring a certain number or
percentage of carpenters to come from among the ranks of the
Union's out of work lists, but our position is better suited to advance
our organizing strategy and goals and thus, our membership's
interests in the long run. We cannot seek to organize a company
today that may already be a successful, busy carpentry firm, by telling
them that if they sign a Union contract they will have to trade half of
their workforce for unknown workers on their next job . . . . I am also
aware that such requests [made under the Request System] do, by
definition, dilute and may replace the traditional 50/50 systems of job
assignments and will result in some carpenters waiting on the job
referral list longer than others. The UBC is keenly aware of this and
the implications of our policy on this topic, but our experience and
belief is that our approach will best serve the long term interests of
the vast majority of our membership . . . . In short, for many years
now the UBC has endorsed the free mobility of Union carpenters to
work steadily for signatory contractors desiring to employ them, free
from any restrictions by any Local Union or District Council. The
request system existing in New York City is consistent with this
policy .. .
McCarron Declaration ¶¶ 2, 4, 5, 8, 10, 12.
The Request System was included in CBAs the District Council negotiated with certain
contractors in 2001. Thomassen described the process, prompted in part by a question by me
:
We enhanced the request system for the contractors for the
association. In return, we have the best contract we have ever
negotiated, at least in my mind, for the New York City Council of
Carpenters.
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THE COURT: I take it that you intend to convey by your last
answer that in the most recent negotiation with the association of
contractors with whom you negotiate a collective bargaining
agreement, you relaxed or gave something up on the – you tell me
what you meant by that.
Did you give something up on the 50-50 rule? Did you grant them
greater liberty than they otherwise had had in the past with respect to
their ability to request individual carpenters? Is that what was going
on?
THE WITNESS: Yes, your Honor, we actually did both.
With the associations, it used to be that if an employee was going
to be requested, he had to show that he worked for the contractor in
the past six months. We took that away and said you could request
a carpenter. He didn't have to work for you in the last six months.
At the same time, what we did also say is that all the independent
contractors that work in New York City would not be allowed to
request carpenters any more, where they were allowed before. We
took the requesting procedure away from the independent contractors,
and they have strict 50-50 rules right now, today, as we speak. The
only ones who are allowed to request are the associations.
Tr. at 287-88. While the record does not reveal the statistical breakdown between contractors who
belong to an association and those "independent" contractors who do not, I infer from the evidence
and the written submissions that there are more of the former than the latter.4
In his October 4, 2005 declaration, Thomassen expands upon the negotiations in June 2001
that resulted in the inclusion of the Request System in the 2001 CBAs between the Union and the
contractors' associations. John Greany, the business manager of Local 608, one of the District
________________________________
4. That inference is supported by a statement such as that appearing in Thomassen's
October 4, 2005 declaration at ¶ 6: "The contracts, with the major employer associations
representing our signatory contractors and our independent signatory contractors engaged in
general outside carpentry work, were scheduled to expire on June 30, 2001." Walter Mack, the
Court-appointed Independent Investigator, submitted a report dated November 5, 2004 on the
50/50 Rule and the Request System which says at page 2: "The vast preponderance of jobs are
performed by contractors who are members of associations having CBAs with the district
council."
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Council's constituent locals, made known to the District Council CBA negotiating committee (which
included Thomassen) the desire of Local 608's members "to eliminate requests." Declaration 117.
Accordingly the Union included in its opening demands a provision that "[t]he 50/50 rule will be
enforced and no special requests can be made to the union. The contractor can hire whom he wants
on his 50% ratios." Id. ¶ 8. Thomassen recalls that "the contractors' opposition to this proposal was
loud and definite":
The contractors resisted any effort to limit their right to request
particular workers from the OWL beyond the six (6) month limitation
contained in the existing agreements. In addition, the contractors
repeated their often made complaint that they were not receiving
qualified, productive carpenters from the OWL and needed to be able
to hire whom they wanted in order to remain competitive with a
growing non-Union segment of our industry.
Id. ¶ 9. The parties were also negotiating "economic terms concerning wage increases, certain
classification pay increases and other matters." Id. ¶ 11. "A final agreement with the major
associations was reached on June 28, 2001." Id. ¶ 12. The Request System was included and the
six month limitation eliminated.
The government says that the District Council did not give it prior notice of its intention to
enter into the 2001 CBAs containing the Request System, and that this failure constitutes a violation
of the Consent Decree. The District Council acknowledges that it did not give the government such
notice, but says that it was not obligated to do so by the Consent Decree, the Job Referral Rules, or
anything else. These contentions are further considered infra. But first it is necessary to consider
the effect of the 2001 CBAs between the District Council and the contractors' associations upon the
50/50 Rule.
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G. The Effect of the 2001 Collective Bargaining Agreements Upon the 50/50 Rule
On November 5, 2004, Mr. Mack presented to the Court his "Independent Investigator's
Report on the '50/50 Rule' and 'Request System.'" The report was based principally upon the
depositions of a number of carpenters conducted by Mr. Mack pursuant to the powers conferred upon
him by the Court in the stipulation and order of December 18, 2002. The 2001 CBAs had been in
effect for several years, so that the carpenters Mack deposed were in a position to describe the effect
of the Request System in those agreements upon the 50/50 Rule, a subject Mack addressed in a
section of his report beginning at page 2 and captioned "The Interplay of the 50/50 Rule and the
Request System."
Mack began his report with disarming self-deprecation: "I had naively believed that the 50/50
rule, incorporated in most Carpenter collective bargaining agreements, was designed to work with
the OWL system so that for half of the Carpenters on any job site, the members who have been out
of work the longest are the first to be dispatched. I was wrong." Report at 1. That was so, Mack
deduced from the depositions of carpenters he conducted, because "[t]he 50/50 rule as described in
most of the CBAs is diluted by the implementation or re-introduction, in the past few years, of the
practice of permitting the contractor to satisfy the requirement of hiring 50% of the Carpenters from
the OWL by requesting particular Carpenters from the list — regardless of those Carpenters' time on
the list." Id. at 3-4. In point of fact, that practice was "implemented" by the inclusion of the Request
System in the 2001 CBAs, a development of which Mack's knowledge was understandably
incomplete; he expressed his "understanding," based upon the carpenters' depositions, that "the
request rule was dormant for some time and was re-introduced with the CBAs that were entered into
starting three or four years ago." Id. at 3 n.4. These were, of course, the 2001 CBAs. Mack quite
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properly decided "not to undertake an investigation into how and when the request rule was
integrated with the 50/50 rule." Id. No such investigation is now necessary; the relevant facts are
revealed in the testimony and declarations described in Part I.F., supra. Considering the impact of
the Request System upon the 50/50 Rule as it was originally designed to operate, Mack concluded
that "it is not surprising that many of the witnesses I deposed expressed the view that the 50/50 rule
as it currently operates is meaningless." Report at 10.
The District Council in its submissions on the present motion does not go so far; Thomassen
clings to the assertion that the Union's CBAs with independent contractors eliminate any employer
requests for particular carpenters and strictly enforce the 50/50 Rule. But those contracts account
for a distinct minority of the jobs available to union members in the City, see note 4, supra, and the
District Council does not really deny that the Request System contained in the 2001 CBAs with
contractors' associations conferred upon contractors the unfettered right to choose the entire
carpentry work force at a job site without regard to the OWL, a right which does indeed render the
50/50 Rule meaningless. Nor could the District Council deny the truth of that proposition, since the
evidence adduced from Thomassen and McCarron makes it plain that this is a right the contractors'
associations demanded in the 2001 CBA negotiations and the District Council agreed to give them,
in exchange for unrelated union benefits which, in Thomassen's perhaps less than wholly objective
view, resulted in "the best contract we have ever negotiated."
H. The Contentions of the Parties on the Government's Contempt Motion
Against this factual background, the contentions of the government and the District Council
may now be summarized.
The government contends principally that the District Council violated ¶ 12 of the Consent
17
Decree by failing to give the government prior notice of its intent to enter into the 2001 CBAs which
included the Request System, thereby eliminating the six-month prior employment limitation
contained in Rule 5(B) of the Job Referral Rules.
The remedies the government seeks are (1) a declaratory judgment that the Request System,
as implemented by the 2001 CBAs, violates the Consent Decree; (2) an order voiding the 2001
CBAs insofar as they contain the Request System; and (3) an order striking Rule 5(B) of the Job
Referral Rules and eliminating requesting entirely, so that the 50 percent of the workforce assigned
by the union to a job site is assigned from the OWL solely on the basis of length of unemployment.
As an alternative to the third of these requests, the government suggests that the Job Referral Rules
be modified to make contractor requests count against the contractor's fifty percent of the 50/50
Rule, again ensuring that fifty percent of the carpentry work force is assigned solely on the basis of
length of unemployment.
The District Council contends principally that ¶ 12 of the Consent Decree requires prior
notice to the government only in respect of changes to its By-Laws; and that, in any event, the
Consent Decree does not empower the government to interfere with or veto actions that are properly
left to the collective bargaining process.
II. DISCUSSION
A. Standard of Review
In this circuit, a contempt order is warranted "only where the moving party establishes by
clear and convincing evidence that the alleged contemnor violated the district court's edict. More
specifically, a movant must establish that (1) the order the contemnor failed to comply with is clear
and unambiguous; (2) the proof of noncompliance is clear and convincing; and (3) the contemnor
18
has not diligently attempted to comply in a reasonable manner. A clear and unambiguous order is
one that leaves no uncertainty in the minds of those to whom it is addressed, who must be able to
ascertain from the four corners of the order precisely what acts are forbidden." King v. Allied Vision,
Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995) (citations and internal quotation marks omitted).
B. The Consent Decree and the District Council's Conduct
1. The Scope of ¶ 12 of the Consent Decree
The District Council accepts — indeed, Thomassen's testimony and declaration proclaim —
that the Request System contained in the 2001 CBAs changed the operation of Rule 5(B) of the Job
Referral Rules. The District Council also accepts the fact that the Job Referral Rules were
incorporated in the Consent Decree and thus became part of the Decree; it could not reasonably
contend otherwise. The District Council's first contention is that ¶ 12 of the Consent Decree
requires prior written notice to the government only of intended changes in the District Council's
By-Laws, so that it did not need to give notice of a change in the Job Referral Rules.
If the District Council were interpreting ¶ 12 of the Consent Decree correctly, or even if its
notice requirements were ambiguous on the point at issue, that would be a sufficient basis for
denying the government's contempt motion, which depends upon a broader reading of ¶ 12.
However, I reject the District Council's narrow reading of ¶ 12, which limits the notice requirement
to By-Laws changes.
The paragraph begins with the recitation that "[t]he parties intend the provisions set forth
herein to govern the District Council's practices in the areas affected by this Consent Decree, now
and in the future." (emphasis added). This broad and all-inclusive language clearly embraces job
referral, the "area" specifically "affected" by ¶ 5 of the Consent Decree. While the second sentence
19
of ¶ 12 is limited to requiring prior written notice to the government and the Investigations and
Review Officer "of any proposed changes to the By-Laws," the very next sentence begins with the
phrase "In addition," and goes on to require that the District Council "inform the Goverment and
the Investigations and Review Officer of any changes in any rules or procedures adopted or
implemented pursuant to" a number of specified paragraphs in the Consent Decree, including 115,
which directs each constituent local union to adopt and follow the Job Referral Rules. Paragraph
12 then provides that for a period of seven years after the IRO leaves office, "the District Council
shall continue to give prior written notice of any such proposed change to the Government"
(emphasis added).
Given the structure of ¶ 12, the phrase "any such proposed change" can only be reasonably
read to include all the "changes" referred to in the preceding sentences, including the Job Referral
Rules mandated by ¶ 5, and consequently prior notice of them (the meaning of the adjective
to object to "the proposed change as inconsistent with the terms or objectives of this Consent
Decree," in which event the change "shall then not occur," and the District Council "may apply to
"proposed"). That conclusion is reinforced by ¶12's closing provisions, which allow the government
the Court for a determination as to whether the proposed change is consistent with the terms and
objectives of this Consent Decree."
In view of the importance laid by the Consent Decree upon the problem of job referrals and
the solution intended by the Job Referral Rules, it is entirely unreasonable to suppose that the parties
intended ¶ 12's prior notice requirements to apply only to changes the District Council might propose
in its By-Laws, and leave the District Council free to change the Job Referral Rules in any manner
it might choose, without prior notice to the government and the IRO or, after the IRO's departure,
20
to the government alone.
However, that construction of ¶ 12 of the Consent Decree in the government's favor does not
entitle the government to an order holding the District Council in contempt of the Decree. The
manner in which the District Council chose to change the Job Referral Rules was through the process
of collective bargaining with the contractors' associations, which gives rise to the second question:
does the Consent Decree have anything to do with collective bargaining agreements?
2. The Effect Vel Non of the Consent Decree upon the District Council's Ability to
Negotiate and Enter into Collective Bargaining Agreements
It must be remembered that one of the remedies the government seeks on this motion is an
order from this Court voiding the provisions for the Request System contained in collective
bargaining agreements entered into by the District Council and contractors' associations in 2001.
Moreover, while the government does not say so explicitly, it is implicit in the relief it seeks that the
Court's order would bar the District Council (and indirectly the contractors' associations) from
including any comparable provision in the CBAs to be negotiated in the spring of 2006 (the duration
of the 2001 CBAs being five years).
It is startling to visualize a federal district judge voiding collective bargaining agreements
previously entered into by a union and employers, particularly since the Supreme Court recognizes
"the federal labor policy that parties to a collective-bargaining agreement must have reasonable
assurance that their contract will be honored." W.R. Grace & Co. v. Local Union 759, Int'l Union
of the United Rubber, Cork, Linoleum & Plastic Workers of Am. , 461 U.S. 757, 771 (1983)
(conciliation process agreed to by employer and EEOC to address employer's job discrimination
cannot alter non-consenting union's collective bargaining agreement right to arbitrate resulting
21
layoffs).
The government asserts that the Court should "void the terms of the 2001 collective
bargaining agreements that broadened contractors' requesting power in derogation of the limited
requesting authority agreed upon in Rule 5(B) of the Consent Decree's job referral rules" because
"where the terms of a collective bargaining agreement are at variance with the terms of a consent
decree governing a labor union, the former must bow to the latter." Main Brief at 23. The only case
cited for this proposition is United States v. International Brotherhood of Teamsters, 954 F.2d 801,
810 (2d Cir. 1992), which the government's brief quotes as follows: "[W]here they differ, collective
bargaining agreements yield to the Consent Decree . . . "Id.
Given the sole reliance the government puts on this case, it is necessary to place its holding
in context. I begin by placing the quoted words in their immediate context (the government having
properly indicated by parentheses and ellipses that the quotation was edited). The quoted words
appear as a part of this discussion:
However, collective bargaining agreements and the Consent Decree
address different problems and serve different purposes. The former
governs the daily relations between particular employers and their
employees, while the latter is an attempt to rebuild the infrastructure
of an entire national labor organization. Considering these different
objectives, we think it consistent with federal labor policy that where
they differ, collective bargaining agreements yield to the Consent
Decree, and that the Consent Decree officers and the district court
remain free to complete their task unencumbered by collateral
arbitration results.
954 F.2d at 810.
The Second Circuit made those observations in these particular circumstances. The
government filed a civil RICO action against the International Brotherhood of Teamsters ("IBT")
22
"in an effort to rid the IBT of its domination by organized crime." Id. at 804. The parties entered
into a Consent Decree as "a critical part of the settlement" of the case, the "central purpose" of the
decree being "to insure the fair and open conduct of the 1991 IBT election, as a means of freeing
IBT's General Executive Board from the grip of La Cosa Nostra." Id. (citation and internal
quotation marks omitted). Toward that end, the decree "authorized the appointment of three court
officers to oversee certain aspects of the IBT's affairs: an Election Officer (EO), an Investigations
Officer, and an Independent Administrator (IA)." Id. These officers were "charged with
implementing the free and fair election of the IBT's governing officials," as well as "Election Rules,
promulgated under the Consent Decree." Id. at 804-05.
A time came when one Henderson, a union steward, was terminated from his employment
by a company which was a party to a collective bargaining agreement with an IBT local. Henderson,
claiming that he had been fired in retaliation for union election activities, filed a grievance pursuant
to the CBA and also filed a protest with the EO alleging that the dismissal violated the Election
Rules. The CBA provided for arbitration. The arbitrator found Henderson's discharge to be
justified. "Although Henderson argued that he was a victim of retaliation, the arbitrator did not
address the issue." Id. at 805. The EO then completed his own investigation, concluded that the
company "had retaliated against Henderson for engaging in Union Election campaign activity, which
is protected by the Election Rules," and ordered Henderson's reinstatement with back pay. Id. at
806. The IA affirmed the EO's decision. The district court affirmed the IA, directed the company
to comply, and imposed a coercive sanction if it did not.
The company appealed, and the Second Circuit posed the issue as follows:
Here, the grievance arbitration conducted pursuant to the CBA, and
23
the parallel Election Rule proceedings held by the EO and IA, reached
conflicting results with respect to Henderson's reinstatement. Under
these circumstances the question arises as to which determination is
controlling.
Id. at 808. The court of appeals, affirming the district court, concluded that the consent decree court
officers' determination took precedence over that of the CBA arbitrator:
[W]e hold that (1) where a consent decree provides individual union
members with a source of independent rights as a means of
effectuating the consent decree's intended goal, and (2) where the
purpose of the consent decree transcends the localized function of
particular collective bargaining agreements and, instead, impacts
upon the structure and processes of a national parent union, federal
policy favoring independent arbitration of labor disputes does not
preempt the procedures created to insure the implementation of the
consent decree . . . . Therefore, we conclude that to the extent an
arbitration award is inconsistent with an order implementing the
Consent Decree, the Consent Decree order must govern.
Id.
Analysis of the Second Circuit's opinion in Teamsters reveals significant differences
between that case and the case at bar. The "central purpose" of the consent decree in Teamsters was
to insure a fair and open 1991 IBT election. The court-appointed officers drafted election rules to
achieve that purpose. The CBA arbitration award and the Election Officer's decision focused solely
upon the discharge of the same individual. The award and the decision were in clear, unmistakable
and irreconcilable conflict. The question was which one the district court would enforce and which
one it would disregard. The court enforced the decision of the court officer appointed under the
consent decree. The Second Circuit affirmed for the reasons quoted supra.
The case at bar does not present so narrow and clear a conflict between the results achieved
under a collective bargaining agreement and pursuant to a consent decree. In this case, the
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government contends that "[t]he District Counsel violated the Consent Decree's command that it
provide the Government prior written notice of proposed amendments to the job referral rules."
Main Brief at 20. However, the "amendment" to Rule 5(B) of the Job Referral Rules resulted from
the 2001 CBAs; and so the government is left to argue that the phrase "such proposed change" in
the penultimate sentence in ¶ 12 of the Consent Decree should be read to include changes effected
in the Job Referral Rules by collective bargaining agreements entered into by the District Council
subsequent to entry of the Consent Decree. However, the government's RICO Complaint, the
Consent Decree, and the Job Referral Rules all contain allegations or provisions that argue against
such an interpretation.
Thus the Complaint prayed for the appointment pendente lite of court officers authorized to
review the Union's existing or proposed contracts "other than collective bargaining agreements."
The prayer for a permanent injunction explicitly excluded from an interim District Council trustee's
duties and responsibilities that of "negotiating and entering into collective bargaining agreements."
The Complaint's principled exclusion of collective bargaining agreements from the reviewing and
negotiating powers of prospective court officers was implemented in practice by the provision in
¶ 4.f. of the Consent Decree, which authorized IRO to review the Union's contracts or proposed
contracts "except for collective bargaining agreements." The clear import of the quoted phrase is
that the IRO had no business reviewing or editing CBAs (or, to state the proposition with greater
politesse, no authority to do so). Job Referral Rule 5(B), the very rule impacted by the Request
System included in the 2001 CBAs, provides that employer requests for specific carpenters shall be
fulfilled "as required by applicable collective bargaining agreements." That phrase suggests the
primacy of CBAs in the area of employer requests, and is consistent with the Consent Decree's
25
withholding from the IRO of any authority to review present or proposed collective bargaining
agreements.
Given these exclusions from and limitations of power, it is difficult to accept the
government's reading of ¶ 12 of the Consent Decree as requiring the District Council to give the
IRO prior notice of a proposed change to a collective bargaining agreement that the IRO had no
authority to review in the first place.
It would have been easy enough for the drafters of the Consent Decree to include language
authorizing the IRO (and the government) to review and approve future CBAs that might impact the
Job Referral Rules. But the explicit denial of authority to the IRO to review collective bargaining
agreements, alone among all possible contracts, strongly supports the inference that the parties did
not intend the Consent Decree to bring future collective bargaining agreements within its purview.
That is not surprising, given the Consent Decree's manifest central purpose of preventing the control
of the carpenters' unions by organized crime (an objective not related, at least directly, to the
negotiation of collective bargaining agreements), and the centrality of collective bargaining
agreements in federal labor law.
I stress, in that regard, that the District Council's asserted reason in granting the Request
System concession to the contractors' associations in the 2001 CBAs is entirely understandable.
Thomassen's hearing testimony and the Thomassen and McCarron declarations describing the
genesis of the 2001 CBAs are credible, and I accept their evidence that the Union agreed to the
Request System in order to improve the ability of union contractors to compete with the growing
number of non-union contractors, with the attendant loss of union jobs. The District Council's
purpose in negotiating the 2001 CBAs in this fashion is entirely unrelated to the government's
26
concern about the CBAs negotiated by the former District Council officers, who the government
alleged in ¶ 19 of its pleading "have converted the collective bargaining agreements into tools of
extortion." There is no suggestion in the record on this motion that the 2001 CBAs were tainted by
extortion or any other impropriety, or were influenced in any way by organized crime, the target of
the government's civil RICO action as spelled out in the Complaint and in the opening statement of
government counsel at the beginning of the trial. On the contrary, the District Council negotiators
agreed to include the Request System in the CBAs because they thought it would benefit more union
carpenters over the long run.5
While certain carpenters are undoubtedly spending more time on the out-of-work list than
they would have if the District Council had not agreed to the Request System, the District Council
has a fiduciary duty to bargain for the benefit of all union members, and Thomassen's and
___________________________
5 Two arguments made by the parties should be briefly noted. First, the government
contends that the Request System included in the 2001 CBAs "increases the potential for
corruption," since a contractor who recruits the entire carpentry work force at a job site is in a
better position to pay that work force "in cash, off the books, in order to disguise the fact that the
wages they were paying were significantly below the rate mandated by the collective bargaining
agreement and to avoid paying fringe benefits." Main Brief at 15-16. Such deplorable conduct
by certain contractors is demonstrated by Mr. Mack's investigations, but the corruption
principally targeted by the Consent Decree is that inherent in organized crime's control of the
District Council, its constituent locals, and union members. The Decree cannot reasonably be
read to reach all conceivable corrupt practices of employers. It does not follow, of course, that
the corrupt practices on the part of contractors will go unpunished because the Consent Decree in
this case does not extend to those practices. Certain of the contractors identified by the Mack
investigations are now facing federal and state criminal investigations, and the District Council's
benefit funds are pursuing remedies in arbitration against them.
Second, the parties' briefs debate whether IRO Conboy's actions with respect to the
conduct in 1994 of former District Council officers in negotiating job referral procedures at the
Javits Convention Center support the government's present request that this Court set aside the
2001 CBAs. The circumstances surrounding the Javits Convention Center were quite different,
and, with all due respect to IRO Conboy (a distinguished former judge of this Court), his
resolution of that earlier matter has and can have no bearing upon the Court's resolution of the
present motion.
27
McCarron's explanations of how the Request System benefits the larger carpenter population make
sense. But whether or not that is so, the Consent Decree does not entitle the government to an order
by this Court voiding CBAs arrived at by the negotiating process that lies at the heart of federal
labor-management relations. Stated differently, in the view I take of the case it would be
inappropriate for this Court to dictate the terms of collective bargaining agreements entered into by
the Union and union contractors. If a sufficient number of union carpenters believe that the District
Council negotiating team which agreed to the 2001 CBAs should not have conceded the Request
System to contractors' associations at that time, or should not renew that concession in the next
CBAs, their remedy lies in the democratic process, including use of the ballot box during the election
of union officers.'
It follows that I agree with the District Council that the Consent Decree does not apply to the
District Council's negotiation of the 2001 CBAs with the contractors' associations. While in Part
II.B.1. I rejected the District Council's reading of ¶12 of the Consent Decree as requiring prior
notice only of proposed changes in its By-Laws, my conclusion in this sub-Part is that the additional
______________
6 The Court is aware that in a document dated January 9, 2006, the Election Monitor
certified the results of the election for the executive committee and delegate body of the District
Council, held on December 9-10, 2005. Peter Thomassen ran unopposed for President and was
re-elected. Michael Forde was re-elected Executive Secretary-Treasurer by a large margin over
two opponents. (Notwithstanding these titles, under the District Council's governance structure
the Executive Secretary-Treasurer is the chief executive officer.) These newly re-elected officers
will have a great deal to do with the District Council negotiating committee for the next
collective bargaining agreements. As counsel for the District Council properly observed during
the oral arguments on this motion, the District Council and its negotiating committee owe a
fiduciary duty to all union members. If there is a groundswell of opinion among the membership
that the Request System in the 2001 CBAs is unfair and carpenters should instead be assigned to
jobs off the out-of-work list in accordance with a strict application of the 50/50 Rule, the Court
assumes that such a view will be made known to the negotiating committee and that committee
will pay attention to it.
28
changes requiring notice do not include those that may be occasioned by future collective bargaining
agreements. Accordingly, there is no basis in law for an order holding the District Council or
Thomassen in contempt of the Decree, and the government's motion fails.
If one accepts that construction of the Consent Decree, and I believe it to be the correct one,
then the District Council is right in arguing that the government, in the guise of claiming a violation
of the existing Decree, is really trying to amend and enlarge it to cover conduct, namely the Union's
negotiation of collective bargaining agreements, which the Consent Decree and the Complaint
explicitly excluded from coverage. But the amending of a previously entered consent decree, while
conceptually possible, requires a showing the government does not attempt on this contempt motion,
which asserts a violation of the existing decree. See Handschu v. Special Services Division, 273 F.
Supp. 2d 327, 336-37 (S.D.N.Y. 2003) (citing Rufo v. Inmates of the Suffolk County Jail, 502 U.S.
367 (1992)).
While a different construction of the Consent Decree is possible, so as to extend its reach to
future CBAs, the very most that can be said for the government is that the language of the Decree
is ambiguous in that regard. But that is equally fatal to the government's contempt motion, since the
order an alleged contemnor is charged with disobeying must be clear and unambiguous in its
prohibition of the contemnor's conduct.
For the foregoing reasons, the government's motion to hold the District Council and its
president, Peter Thomassen, in contempt of the Consent Decree is denied.
29
It is SO ORDERED.
Dated: New York, New York
January 12, 2006
CHARLES S. HAIGHT, JR.
SENIOR UNITED STATES DISTRICT JUDG