ARTICLE: CLEANING LABOR'S HOUSE: INSTITUTIONAL REFORM LITIGATION IN THE LABOR MOVEMENT. MICHAEL J. GOLDBERG

1989 Duke L.J. 903, *

September, 1989

1989 Duke L.J. 903

LENGTH: 70789 words

ARTICLE: CLEANING LABOR'S HOUSE: INSTITUTIONAL REFORM LITIGATION IN THE LABOR MOVEMENT.

MICHAEL J. GOLDBERG *

* Professor, Widener University School of Law. A.B. 1971, Cornell University; J.D. 1975, Harvard Law School; LL. M. 1977, Georgetown University Law Center. The author would like to thank Florian Bartosic, Herman Benson, G. Robert Blakey, Arthur L. Fox, Paul Alan Levy, Cornelius J. Peck, and Clyde W. Summers for their helpful comments on earlier drafts. Many thanks also to Sharon Rau, Anthony Sanchez, and Susan McMarlin Vater for their invaluable research assistance.

In 1980-81, the author served as counsel to Teamsters for a Democratic Union (TDU), a national organization of rank-and-file Teamsters seeking to reform their union. From time to time since then, he has served as a consultant to TDU on a pro bono basis. The views expressed in this Article, however, are those of the author alone and do not necessarily reflect those of TDU or any other organization.

SUMMARY:
... At the same time, Hoffa and his associates were the targets of relentless governmental investigations and prosecutions for corruption and racketeering, which led to the IBT's expulsion from the AFL-CIO, passage of the Landrum-Griffin Act (the first comprehensive legislation regulating the internal affairs of unions), and eventually Hoffa's own conviction and imprisonment for jury ... In the interim years, title VII of the Civil Rights Act of 1964 served as an important substantive basis for the courts, often with the assistance of masters and receivers, to supervise the reform and day-to-day affairs of unions and related institutions, such as hiring halls and apprenticeship programs. ... Indeed, the same conditions that made Local 560 a good candidate for a RICO trusteeship at the start -- deeply rooted corruption, the absence of a democratic tradition, and a membership too intimidated to do much about it -- meant that no remedy was likely to be an instant or total success. ... Schmidt was primarily a management labor lawyer, and he continued to represent some trucking companies in their dealings with several Teamster locals after becoming a monitor. ... It sought 1) the removal of any IBT General Executive Board members, including the General President, found to have committed RICO violations, 2) the appointment of a trustee empowered to discharge the GEB's duties, other than those related to collective bargaining or Teamster political activities, and 3) new elections of International officers in a manner that would protect against intimidation or other improper influences. ...

TEXT:
[*904] I. INTRODUCTION

Jimmy Hoffa is probably laughing in his landfill, ¹ amused by the fact that the more things change in his union, the more they stay the same. When Hoffa ascended to the presidency of the International Brotherhood of Teamsters (IBT) in 1958, that union was not only the largest and strongest in the American labor movement, but also the most corrupt. Unfortunately, after three decades of effort by both rank-and-file reformers and federal law enforcement officials to clean up the 1.6 million member union, that characterization of the IBT remains as accurate today as it was in Hoffa's day.

Hoffa became president of the Teamsters union following the decision of his predecessor, Dave Beck, not to run for reelection in the face of [*905] subsequently proven charges of embezzlement and tax evasion. ² Hoffa's election, the product of a rigged convention, was surrounded by controversy and was challenged in court, with surprising success, by rank-and-file reformers who managed to obtain the judicial appointment of a Board of Monitors to oversee what was to have been a major clean up of the union. ³ At the same time, Hoffa and his associates were the targets of relentless governmental investigations and prosecutions for corruption and racketeering, ⁴ which led to the IBT's expulsion from the AFL-CIO, ⁵ passage of the Landrum-Griffin Act (the first comprehensive legislation regulating the internal affairs of unions), ⁶ and eventually Hoffa's own conviction and imprisonment for jury

It is now 1989, and not much has changed in the Teamsters union. Jimmy Hoffa is gone, to be sure, but the controversies surrounding his union remain remarkably similar. Jackie Presser, the late Teamsters president who recently died of cancer, gained that office only after his predecessor, Roy Williams, was convicted on federal charges of attempting to bribe a U.S. Senator. ⁸ And just as Hoffa helped clear a path for his own advancement by leaking information about Beck to the McClellan Committee, ⁹ Presser apparently did the same by serving as an informant for the FBI and giving information on Williams. ¹⁰ Moreover, evidence introduced in a marathon criminal trial of Genovese crime family bosses in New York, and statements obtained from both Williams and Presser, support Justice Department allegations that a Mafia conspiracy [*906] engineered Presser's selection. ¹¹ Shortly after his own federal indictment for embezzling some $ 700,000 from his home local in Cleveland, ¹² Presser won election as President in his own right by convention delegates selected through procedures violating the spirit, and arguably the letter, of the Landrum-Griffin Act. ¹³

Nor do the parallels stop there. As the McClellan Committee had done a generation before, the President's Commission on Organized Crime recently identified the IBT as the national union "most controlled" by organized crime. ¹⁴ In response, the federal government has again launched a campaign to clean up the union. In an action based on the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), ¹⁵ the Department of Justice sought to place the entire Teamsters union under the temporary control of a court appointed trustee. ¹⁶ That litigation resulted in a consent decree creating a remedy substantially more radical than the monitorship imposed during the Hoffa period. ¹⁷

One major difference between the 1950s and 1980s, however, is the complete turnabout in stature that the IBT has experienced within the larger American labor movement. Unlike the 1950s, when the union was an outcast, the IBT's recent reaffiliation with the AFL-CIO marks the end of a thirty-year exile and a return to the mainstream for the Teamsters, a development that raises serious questions about the nature of the AFL-CIO's commitment to eliminate corrupt elements from its ranks. ¹⁸

The vast majority of American unions, of course, are untainted by corruption or organized crime. ¹⁹ But a little racketeering can go a long way. As the President's Commission on Organized Crime explained, [*907] "[M]any infiltrated unions are major locals embracing thousands of members, and they operate in strategic commercial sectors and large urban and metropolitan centers. Influence over these locals enables organized crime to dominate the international unions and acquire a foothold in the marketplace." ²⁰ Just as little has changed in the Teamsters union, similar patterns of racketeering remain entrenched in several other major unions that the investigations of the 1950s exposed as corrupt, viz., the Hotel Employees & Restaurant Employees Union, the Laborers International, and the International Longshoremen's Association. ²¹

For decades, then, the battle against organized crime's infiltration of important unions, like the Teamsters, has been a losing effort. There have been many victories against individual racketeers, and over the years, hundreds of corrupt union officials have been jailed. But as often as not, successors cut from the same cloth replaced deposed officials and continued the systematic exploitation of their unions' memberships. The names of the players sometimes change, but their game remains the same.

A dramatic new weapon has recently emerged on this legal battlefield, however, and it has the potential to tip the balance decidedly in favor of those seeking a permanent housecleaning of the Teamsters and other racketeer-ridden unions. Through the civil RICO structural injunction, courts can impose structural reforms and even trusteeships in order to clean up corrupt unions. In United States v. Local 560, International Brotherhood of Teamsters, ²² for example, the Third Circuit upheld a RICO injunction that removed from office the entire executive board of a racketeer-controlled union local and replaced it with a court-appointed trustee until fair elections could be held. ²³ On a much larger scale, in the [*908] most ambitious union clean-up campaign ever attempted, the Justice Department has recent obtained a RICO remedy against the entire 1.6 million member Teamsters International. ²⁴

These RICO remedies are controversial experiments in institutional reform litigation in the context of labor unions; they represent an attempt to use civil litigation to clean up corrupt unions by relying on the courts' active, extensive, and ongoing oversight, intervention, or direct control over internal union affairs until such time as the desired reforms are in place. Institutional reform litigation, well known in such contexts as school desegregation and the reform of prisons and mental institutions, ²⁵ has until recently been rarely attempted in the labor movement.

This Article examines the current trend toward institutional reform litigation within unions and evaluates its propriety, legal foundation, and prospects for success. This requires an understanding of the problems union reform litigation is intended to redress, and the alternative approaches such litigation supplements or replaces. To gain this understanding, the Article begins with an overview of the nature and extent of corruption within the labor movement, and proceeds to a discussion of the less drastic alternatives that must be pursued before institutional reform litigation should commence. The Article next examines the common law and statutory precedents for the judicially supervised reform of labor unions; this leads to an exploration of the civil RICO structural injunction and its relation to both federal labor policy and the associational rights of unions and their members. The Article then evaluates the leading examples of union reform litigation over the years, with a particular focus on the Teamsters Board of Monitors from the Hoffa period, the more recent RICO trusteeship over Teamsters Local 560, and the RICO reforms recently imposed on the Teamsters International. Finally, in the form of proposed civil RICO "sentencing" guidelines, the Article suggests means to develop remedies in union reform litigation that will tend to maximize their effectiveness but, at the same time, minimize their intrusiveness.

[*909] II. THE NATURE AND SCOPE OF UNION CORRUPTION AND LABOR RACKETEERING

During 1981, Tony Provenzano collected an officer's salary of $ 28,000 from his Teamsters Local 560 in Union City, New Jersey. In amount, Provenzano's salary was quite reasonable. ²⁶ Less reasonable was the fact that when he collected it, Provenzano was three years into the life sentence he was serving for ordering the murder of a political rival within his local. ²⁷ While union corruption and labor racketeering can take many forms, it seldom appears in all forms within a single local. Unfortunately, Local 560 had it all.

Labor racketeering is "the use of union office or power for personal profit." ²⁸ One of the most obvious abuses of union power is for officers simply to siphon money from their union treasuries. The $ 28,000 payment to Provenzano was only the tip of the iceberg in Local 560. Provenzano had received similar payments in 1979 and 1980, ²⁹ and during an earlier period, again while holding no union office (and, in fact, [*910] while disqualified from holding office due to prior labor racketeering convictions), ³⁰ he illegally received almost $ 200,000 in payments from his local. ³¹

Stealing the membership's dues, of course, is an old fashioned, rather crude form of union corruption, and ambitious racketeers often search for deeper pockets to pick: the employers. As one commentator observed, "The firm is the efficient side of racketeering activity. . . . It should be quite clear that the expropriation can never be as high from workers as from employers." ³²

Labor racketeering directed at employers usually takes two related forms: "strike insurance" and "sweetheart" contracts. In both cases, the corrupt union leader accepts under-the-table payoffs in return for compromising the membership's interests in organizing, bargaining with management, or enforcing a contract. ³³ The two forms of corruption differ in that whereas strike insurance is forced upon unwilling employers as a variation of the old protection racket, sweetheart deals are often welcomed and initiated by corrupt employers who benefit from such arrangements as much as the union officials. A $ 10,000 payoff to a corrupt union official, for example, might result in a sweetheart contract saving the employer $ 100,000 in labor costs. The union official and the employer come out ahead; the losers are the workers and the employer's more honest competitors. ³⁴ Sweetheart deals also victimize the labor [*911] movement more generally by reducing wages and worsening working conditions; by presenting the public image of a labor movement plagued by corruption and ridden with racketeers; and by functioning as legal bars to the efforts of honest unions to win from corrupt ones the right to represent the victimized workers. ³⁵

Payoffs from employers were everyday events in Tony Provenzano's Local 560. Consider only those payoffs for which Provenzano or his associates were convicted: payments for "labor peace" from the Dorn Transportation Company between 1952 and 1959; attempted extortion of "labor peace" payoffs from the Braun Company in 1961; payments from Seatrain Lines and its in-house trucking companies between 1969 and 1977, which allowed them to avoid unionization and to pay Local 560 members low wages and no benefits; and payments from four trucking companies between 1971 and 1980, which allowed the trucking companies to avoid contractual obligations to hire Local 560 "city men" upon entering the local's jurisdiction. ³⁶

Collectively bargained pension and health and welfare funds ³⁷ provide labor racketeers with another pot of money through which "the savings of working men and women are pilfered, embezzled, parlayed, mismanaged and outright stolen." ³⁸ One form of pension fund abuse common in Local 560 was the receipt of kickbacks for arranging questionable pension fund loans. ³⁹ Another was the accrual of unreasonably high administrative costs by, for example, retaining an unscrupulous [*912] fund accountant even after his indictment for systematically overbilling the fund. ⁴⁰

Pension fund abuse proves to be a particularly pernicious form of labor racketeering because its effects on plan participants may remain hidden for years. Such effects may take two forms. First, financial losses to the fund may cause recipients' benefits to decrease or to increase at a slower pace than they otherwise would; in extreme cases, the fund may become insolvent altogether. Second, and more subtlely, the losses resulting from fund mismanagement may create an incentive for plan administrators trying to hide those losses to tighten eligibility requirements. As a result, fewer plan participants qualify for benefits, and those that do qualify receive smaller benefits than expected. ⁴¹ When the union member finally feels the effect -- for example, when a worker about to retire learns that she is eligible for only half the expected pension because of a short interruption in employment years before -- it may be too late either to remedy the abuses or to make alternative financial arrangements for retirement. ⁴²

Union corruption also can facilitate other illicit activities, such as gambling, loansharking, and pilferage. ⁴³ Local 560 scores at least two out of three here, with members of the Provenzano group having been convicted of both loansharking and theft of property from employers' loading docks. ⁴⁴

Finally, extensive union corruption usually leads to economic or physical retaliation directed at union members who are bold enough to challenge their corrupt officers' conduct or continued tenure in office. ⁴⁵ During the early 1960s, the Provenzano group consolidated its control over Local 560 by murdering two union rivals. ⁴⁶ In the ensuing years, the high level of intimidation in the local virtually precluded any further [*913] rank-and-file opposition to the outrageous conduct of Provenzano and his associates. ⁴⁷

Local 560, of course, has no monopoly on corruption, and neither does the Teamsters International. Occasionally, even a United Auto Workers official gets caught with his hand in the till, ⁴⁸ and sweetheart contracts and strike insurance rackets are rampant throughout the construction industry and on the docks. ⁴⁹ Similarly, other unions besides the Teamsters, such as the Hotel and Restaurant Employees and the Laborers International, have well-deserved reputations for pension and benefit fund abuse. ⁵⁰ Finally, dozens of union locals in the construction trades have permitted their hiring halls to dispatch workers to jobs on the basis of such illegitimate factors as race and sex discrimination, ⁵¹ cronyism, ⁵² and under-the-table payoffs. ⁵³

Of course, none of this is new. The problem of union corruption has plagued some segments of the labor movement almost since its inception. ⁵⁴ Over the years, a number of interesting patterns have emerged. For example, corruption is generally more of a problem in the older, craft unions of the pre-merger AFL than in the newer, industrial unions organized by the CIO during the 1930s. ⁵⁵ Some commentators have suggested that the conservative "business unionism" typical of the AFL was [*914] simply more susceptible to abuse than the more idealistic, politically progressive "social unionism" of the CIO. ⁵⁶

Other explanations focus on the common characteristics of the construction, garment, longshore, service, and trucking industries, where labor racketeering is most prevalent:

All of these industries are notable in some degree for small business units, high proportional labor costs, small profit margins, intensive competition, and a considerable rate of business failures. At least in the past the battle for survival was severe, with ethics an early casualty. Wages were a natural point of attack by employers who, alone or in concert, sought cheapness and stability by whatever means were available -- coercion, bribery, or collaboration. Union officials used their economic power to private advantage against employers especially vulnerable to the strike. ⁵⁷

The relatively small scale corruption of amateur crooks -- the "trade unionists with a flaw" that probably can be found in any union -- should be distinguished from the more extensive operations of professional labor racketeers -- "the proconsuls of the American underworld" who have had their greatest success infiltrating such unions as the Teamsters, Laborers, Hotel and Restaurant Employees, and east coast Longshoremen. ⁵⁸ The often chaotic conditions in the industries served by these unions can create tempting opportunities for "the professional and violent stabilizer." ⁵⁹

[*915] Although certain segments of the labor movement suffer from corruption and the infiltration of organized crime, the entire labor movement is certainly no worse in this regard than other segments of society. ⁶⁰ Indeed, employers often set the tone for labor racketeering. Consider the construction industry, for example:

Certainly the desire to eliminate competitive bidding initially must have come from the employer; and employers accustomed to giving kickbacks and rebates, to paying inspectors for systematically violating building codes . . . are not going to be reluctant to use the same methods in their labor relations. Where systematized racketeering exists, it will usually be found embodied in the entire system of carrying on a business or industry. ⁶¹

But labor racketeering deserves our attention for reasons beyond consideration of its anticompetitive impact on the economy. ⁶² Since federal law is a major source of union power, ⁶³ the public has a strong interest in a clean labor movement and in democratic unionism. ⁶⁴ At their best, unions use that power to bring to the workplace not only improved wages and working conditions but also a level of industrial democracy and human dignity that is impossible to measure in dollars and cents. [*916] Equally important, unions provide a vital, collective voice for workers in the political arena. ⁶⁵ These functions of unionism are incompatible with labor racketeering, and a labor movement plagued with corruption is one which the public may not tolerate indefinitely. ⁶⁶

III. KEEPING ITS OWN HOUSE CLEAN: THE LABOR MOVEMENT'S INTERNAL REMEDIES

The frustrations of trying to win a seemingly endless legal war against labor racketeering have generated an infautation with RICO trusteeships in law enforcement circles. But even their strongest proponents agree that RICO trusteeships should be used only as a last resort. This view is in keeping with a central tenet of federal labor policy: unions and their members should have ample opportunities to resolve their problems internally before the courts interfere. ⁶⁷ The justifications for this policy are threefold: first, to prevent unnecessary governmental interference with the affairs of private organizations; second, to promote responsible union self-government by providing union officials of higher authority the opportunity to oversee, and where necessary to correct, the conduct of lower level union officials; and finally, to conserve judicial resources, since disputes resolved internally need not be brought to [*917] court. ⁶⁸ Before focusing on structural remedies such as trusteeships, therefore, an examination of the nature and effectiveness of the labor movement's own remedies for union corruption is appropriate. ⁶⁹

A. Discipline of Corrupt Officers and Members and Damage Actions for the Recovery of Embezzled Union Funds

Once corruption is detected, the union itself, if its officers and membership are willing, can remedy isolated or small scale instances of corruption. ⁷⁰ For example, a union can bring charges of violating the union's constitution against an official who embezzles from the union treasury. If a union tribunal finds the official guilty, it can remove her from office and suspend or expel her from the union's membership. ⁷¹ [*918] The union also can use its disciplinary proceedings to obtain restitution of the embezzled funds by imposing a fine on the guilty party equal to the amount stolen. ⁷²

Alternatively, a union might seek damages from corrupt officers through a common law tort action or, in appropriate cases, treble damages and attorneys' fees through the civil provisions of the RICO statute. ⁷³ These court actions are particularly appropriate when union officials have taken payoffs from corrupt employers, because the employers involved are equally guilty and also should be held accountable. However, determining an appropriate measure of damages in such cases can be complicated. A natural starting point would be the dollar amount of the illegal payoffs, since that sum represents the cost to the employer of buying off union representation that properly belonged to the union's membership. But since payoffs typically cost employers less than an honest labor relations policy would (why else make the payoffs?), actual losses to the union, in terms of a reduced reputation for effectiveness, and to the union's membership, in terms of lost grievances and smaller wage and benefit packages, generally exceed the payoffs. Therefore, that starting figure should be subject to a reasonable multiplier appropriate to the facts of any given case.

In situations in which union officials refuse to authorize such lawsuits against their corrupt colleagues, union members can initiate the litigation themselves, on their union's behalf, in the union equivalent of shareholder derivative actions, pursuant to title V of the Landrum-Griffin Act. ⁷⁴ Whether a treble damages claim under civil RICO can be piggybacked onto a title V action against a union officer for breach of his fiduciary duties is as yet unanswered. The doctrine of in pari materia, that two statutes addressing a common problem should be interpreted in [*919] a manner that furthers the effectiveness of both, ⁷⁵ suggests that courts should recognize such a "hybrid RICO/section 501 action." ⁷⁶

B. Voting the Rascals Out

When members of the public hear tales about Teamsters leaders such as Jimmy Hoffa, Jackie Presser, and Tony Provenzano, they often ask why the members don't simply vote the rascals out. After all, that is just what rank-and-file miners did to the corrupt Tony Boyle regime in the United Mine Workers (UMW) seventeen years ago. ⁷⁷ The failure of the membership to take such action in the Teamsters, Laborers, and other unions is sometimes viewed as a sign that the rank-and-file like things just the way they are in their unions, corruption and all.

At times, that assumption may hold a grain of truth. Hoffa, for example, participated in the looting of union treasuries and pension funds, but he was also a genuinely effective and charismatic labor leader who delivered substantially improved wages, benefits, and working conditions to the bulk of his membership. ⁷⁸ Jackie Presser, on the other hand, presided over a shrinking union membership with diminishing wages and deteriorating working conditions, ⁷⁹ and his difficulty in obtaining rank-and-file approval of the contracts he negotiated suggests that he probably would not have fared as well as Hoffa in a membership referendum. ⁸⁰

Unfortunately, we will never know, for the Teamsters' membership has never had a chance to vote for Hoffa or for any of the men who succeeded him -- Frank Fitzsimmons, Roy Williams, Jackie Presser, or William McCarthy. Instead, convention delegates -- most of whom are already part of the union power structure -- elect the national officers of the Teamsters and many other national unions. Entrenched national administrations can manipulate some of these electoral systems, like the [*920] Teamsters', to drastically reduce, if not eliminate, the prospects for successful challenges to incumbent officers at the national level. ⁸¹

Incumbents also have a powerful advantage in direct membership elections of national officers. ⁸² The victory of the Miners for Democracy reform slate in the UMW election of 1972 is the great counter-example, of course, but even that victory came only in a U.S. Department of Labor supervised election that was virtually compelled by the brutal murders of an earlier reform candidate and his family on the orders of then-UMW president Tony Boyle. ⁸³ In too many other cases, either the cumbersome enforcement procedures of the Landrum-Griffin Act's election provisions, or the Labor Department's passive approach to enforcement, stymies reform challengers who seek Labor Department help in assuring fair elections. ⁸⁴

Union reformers traditionally have had much greater success at the local level than at the national. There, the democratic reforms imposed by the Landrum-Griffin Act have been most effective in furthering one of the statute's principal purposes: empowering the rank-and-file to clean up corrupt unions themselves. ⁸⁵ But as the Local 560 case illustrates, labor racketeers can sometimes nip opposition threats in the bud by retaliating economically, and if necessary physically, against rank-and-file dissidents. ⁸⁶ The right to run for office and the right to obtain Labor Department assistance in assuring a fair election are of little help when potential reform candidates and their supporters are too intimidated even to mount a campaign.

C. Intra-Union Trusteeships

When the levels of corruption and racketeering in a union local make reform by a local's own members unlikely, the parent international can intervene with a very powerful and effective device for cleaning [*921] house in the local: ⁸⁷ the intra-union trusteeship. Typically, the international will remove all local officers from their posts and will appoint its own trustee to run the local's affairs until the problems necessitating the trusteeship have been resolved. The union will then hold new elections of local officers and the governance of the local will be returned to its members.

Thus, if the local's officers have been abusing the union's treasury, the trustee can impose more responsible fiscal policies; if the officers have been taking payoffs from employers to ignore contract violations, the trustee can begin handling grievances more aggressively; if dispatchers in a local's hiring hall have been taking bribes to allocate work assignments, the trustee can implement a firm "first in, first out" dispatch policy; if the local's officers have been negotiating sweetheart contracts with employers, the trustee can notify those employers that negotiations for future contracts will be legitimate and at arm's length. Indeed, if the trustee can prove that existing contracts are the product of fraud, bribery, or other illegal conduct, she may be able to have them nullified so that legitimate collective bargaining can commence earlier than would otherwise be possible. ⁸⁸ Further, on behalf of the local, the trustee can initiate litigation pursuant to the Landrum-Griffin Act, RICO, and common law causes of action in order to recover damages for the harm suffered by the local and its members at the hands of the local's former officers and their corrupt management counterparts.

The effectiveness of trusteeships as a remedy for union corruption and labor racketeering, however, depends on the willingness of the labor movement's national leaders to impose them. Most national unions, which are basically untainted by corruption and determined to stay that way, have leadership that is committed to eradicating corrupt practices. Unfortunately, and not coincidentally, those national unions with the greatest need to resort to trusteeships to expunge racketeer influences at the local level often have been infiltrated at the national level as well. [*922] For example, eight years before federal prosecutors succeeded in obtaining a judicially-imposed RICO trusteeship over Tony Provenzano's thoroughly corrupt Teamsters Local 560, rank-and-file Teamsters formally petitioned the Teamsters International to impose a trusteeship of its own. Their request fell on deaf ears. ⁸⁹

D. Other Intra-Union Controls Over Local Unions

Short of an outright takeover through trusteeship, national unions typically have a myriad of subtle and not so subtle ways to influence their locals. These might include veto power over proposed amendments to the local's bylaws, authority to resolve jurisdictional disputes between sister locals, the ability to grant or withhold strike authorization or strike benefits, and the authority to control the higher levels of contractual grievance procedures. ⁹⁰ Through these devices, a national union sometimes can undermine membership support for a corrupt but politically entrenched local leader by reducing his effectiveness in collective bargaining or contract enforcement. ⁹¹

A national union also might order the merger of a corrupt local into one or more of its sister locals, in an effort to dilute and eventually eliminate the local's problems. On the other hand, if the international believes that the prospects for cleaning up one of its locals is particularly hopeless, it might revoke the local's charter. The international could then charter a new local to assume the old local's jurisdiction; alternatively, it could simply write off the lost members as a sacrifice necessary to prevent the corruption that plagues the expelled local from infecting other parts of the union. The expelled local would probably dissolve, but it could try [*923] to survive as an independent local, or it might obtain a charter from a different national union more tolerant of corruption. ⁹²

E. Public Review Boards

A fundamental problem with all of the internal union remedies discussed thus far is that they usually operate in the context of union governments that have not institutionalized the checks and balances associated with the separation of powers. ⁹³ A union's legislative functions are, at least in theory, performed by its conventions at the national level and membership meetings at the local level, and the union's executive functions are carried out by its elected and appointed officers and staff. ⁹⁴ But in most unions, no third branch of government exists: the judicial functions are generally handled at the "trial" level by ad hoc hearing tribunals comprised of officers or members, and at the "appellate" level they are reviewed by the union's executive board or national convention. ⁹⁵

As a consequence, the executive officers of the union, particularly the international hierarchy, have the power not only to execute the law of the union but also to interpret it, thus disregarding the notion that in a democratic government "[t]he executive must rule not only by law . . . . [I]t must rule under law." ⁹⁶ Because internal appellate review is usually [*924] available before any of the union remedies discussed in this section are given final effect, the absence of a separate union judiciary means that those remedies will only be as effective as the union's top leadership will allow them to be. ⁹⁷

In response to this dilemma, the United Auto Workers (UAW) and a handful of other unions have created semi-independent "Public Review Boards" (PRB) to serve as their "supreme courts" for intra-union grievances. ⁹⁸ The most successful of these, established by the UAW in 1957, contains seven impartial members appointed from positions outside the union by the International President. Except for its funding, the PRB maintains complete independence from the union hierarchy; it has its own staff, and its offices are located in a building separate from other union offices. ⁹⁹

The UAW's PRB has broad authority to hear appeals from individual union members or from subordinate bodies within the union dealing with internal union matters other than the union's collective bargaining policies. ¹⁰⁰ While most PRB rulings have affirmed executive board decisions, the PRB has overruled the executive board to void fraudulent elections of local officers, has overturned questionable trusteeships, and has [*925] ordered reconsideration of improperly adopted local bylaw amendments. ¹⁰¹ More frequently, the PRB has reversed unfair or retaliatory disciplinary proceedings brought against dissident members, and has upheld the right of rank-and-file members to file charges against their officers. ¹⁰² The PRB has been successful not only as a union court of last resort, but also "as a combination complaint department, inspector general, and conciliation service," and its existence has, at the very least, encouraged the union hierarchy "to pay scrupulous attention to the requirements of procedure in a given situation." ¹⁰³

In spite of this success -- or perhaps because of it -- the public review board concept has not met wide acceptance. This is its greatest failure. ¹⁰⁴

F. The Federation's Role

A fundamental principle of the old AFL was that each national union had complete sovereignty over its internal affairs. As one union leader critical of that approach stated, "Autonomy was so sacred that the worst crooks could wrap themselves into a union charter and use it as a license for industrial piracy." ¹⁰⁵ The merger of the AFL and the CIO in 1955 did not affect this autonomy principle, and a common assumption is that the AFL-CIO may simply be too loose a federation to play a significant role in cleaning up corrupt affiliates.

However, as the AFL and the CIO demonstrated separately and together during the 1950s, the AFL-CIO can take some steps when it has [*926] the will to act. The Federation's most important source of leverage over its affiliates is its power to suspend or expel them from membership, and that power has been quite effective against some unions. For example, in 1949 and 1950, the CIO expelled eleven unions for alleged Communist domination; soon after, nine of the eleven had either gone under or had been absorbed by rival unions. ¹⁰⁶ Corruption replaced communism on center stage a few years later, and the AFL-CIO successfully expelled the corrupt Bakery and Confectionary Workers International Union in 1957, chartering a new American Bakery and Confectionary Workers Union which assumed control over many of the expelled union's locals and members. Eventually, the remnants of the older union cleansed its ranks, and the two unions merged. ¹⁰⁷

On the other hand, expulsions of the International Longshoremen's Association (ILA) and the Teamsters were total failures, demonstrating that exile from the house of labor is not necessarily an effective remedy against labor racketeering. In 1953, following dramatic revelations by the New York State Crime Commission of corruption reaching the highest levels of the ILA, the AFL expelled the ILA and, with no lasting success, attempted to organize a rival International Brotherhood of Longshoremen (IBL) to displace the ILA from the New York waterfront. ¹⁰⁸ The ILA defeated the IBL in a series of bitterly contested National Labor Relations Board (NLRB) elections, and by late 1959 the AFL-CIO invited the ILA to reaffiliate. ¹⁰⁹ Similarly, the Teamsters union seems to have suffered few ill effects from its thirty-year exile from the Federation, which began after Hoffa's election in 1957 and ended anticlimactically in 1987. ¹¹⁰

These failures, however, do not mean that the AFL-CIO is totally powerless to combat corruption in its affiliates. Many affiliates, particularly the smaller ones, do not relish the prospect of survival on their own. [*927] For example, during the same period in which the ILA and IBT expulsions were failing, the fear of expulsion and its consequences led the Distillery Workers, and the Jewelry Workers to accept something resembling Federation "trusteeships": each union was placed on probationary status, during which time the Federation appointed "monitors" to supervise the affairs of the unions and assist in the elimination of corruption. ¹¹¹

The AFL-CIO also might fight corruption both in its affiliates and in unaffiliated unions by considering comparative levels of corruption in competing unions when resolving jurisdictional disputes, by providing financial or technical support for reformers in corrupt unions, or by refusing to honor the picket lines or otherwise lend support to the activities of certain "outlaw" unions that could be placed on a "boycott" list. These approaches, however, would constitute major departures from longstanding AFL-CIO practice, and -- given the political realities in a Federation that recently welcomed back the Teamsters without even a word about Teamster corruption -- they are unlikely to be tried anytime soon.

Indeed, the AFL-CIO's current indifference to the problem of corruption within its ranks is typified by the fact that its ethical practice codes, adopted with great fanfare in the 1950s, are now out of print within the Federation. The ethical practices committee established to enforce them has been dormant for decades. ¹¹²

IV. LEGAL AUTHORITY FOR THE JUDICIALLY SUPERVISED REFORM OF LABOR UNIONS

Internal union remedies have proven inadequate to eliminate the corruption and racketeering that has plagued some segments of the labor movement for decades. Countless criminal prosecutions and civil suits for routine injunctive relief ¹¹³ or damages against corrupt union officials and their management counterparts also have proved ineffective. Such [*928] cases often succeed in jailing an offender here or halting an abuse there, but as the sordid history of Tony Provenzano's Teamsters Local 560 illustrates, they fail to root out deeply entrenched patterns of labor racketeering. ¹¹⁴

The failure of traditional remedies to eliminate corruption from unions like the Teamsters has led growing numbers of law enforcement officials, and some union reformers, to embrace the much more controversial and drastic remedy of court-imposed trusteeships as a means of remedying the most severe instances of labor racketeering. ¹¹⁵ Frustration with the inadequacy of less drastic measures alone, though, cannot provide the legal authority for such trusteeships, or for any other similarly intrusive efforts by the courts to supervise a union's internal affairs. Nor does adequate discussion of the sources of that authority appear in the emerging line of cases, beginning with Local 560 itself, in which courts have actually imposed such remedies. ¹¹⁶

This section and the next, therefore, endeavor to provide some of that missing analysis. First, a review of the emergence over the last several decades of institutional reform litigation in other substantive areas provides a context for the discussion. The next four subsections examine the more direct precedents for union reform litigation, many involving the use of such traditional equitable devices as masters and receivers in a variety of union settings. The Article then analyzes the structural injunctions available under the RICO statute, which provides the basis for five recent or ongoing union trusteeships, monitorships, and decreeships.

A. Traditional Equitable Remedies and the Emergence of Institutional Reform Litigation

Equity, it has long been said, will not suffer a wrong without a remedy. ¹¹⁷ Accordingly, "equity has been characterized by a practical flexibility in shaping its remedies." ¹¹⁸ That flexibility has been stretched to [*929] dramatic new limits in the last twenty-five years, first in school desegregation and later in such areas as the reform of prisons and mental institutions, as the courts have responded to the development of new substantive rights by entering "squarely in[to] the business of reforming bureaucracies." ¹¹⁹

Because of the inherently difficult and protracted nature of reforming complex social institutions, particularly when reform is forced upon resistant bureaucracies from the outside, institutional reform litigation has been accompanied, perhaps inevitably, by a transformation of traditionally equitable remedies into new and sometimes controversial forms. The injunction, for example, one of equity's most basic remedies, assumed a new look as a result of the legal revolution brought about by the civil rights movement. ¹²⁰ The notion that injunctive relief is "extraordinary" has all but disappeared. ¹²¹ The injunction is no longer a "one-shot method" of reform. In institutional reform cases, "a series of interventions" are inevitable, and the injunction represents the initiation of a "relationship between the judge and the institution" -- a declaration that the judge will henceforth manage "the reorganization of an ongoing social institution." ¹²²

Judges soon learned, however, that supervising institutional reform without outside help was often impossible. Therefore, relying on their "inherent power to provide themselves with appropriate instruments required for the performance of their duties," ¹²³ they created new roles for such traditional ancillaries of the equity courts as masters and receivers. The master, for example, evolved from the traditional pre-disposition factfinder to the post-liability formulator, monitor, and enforcer of remedial decrees. ¹²⁴ Similarly, receivers were no longer limited to their traditional function of holding, managing, or liquidating a defendant's [*930] property in order to protect a plaintiff's interest in that property. ¹²⁵ For two decades, courts facing unusually fierce resistance in institutional reform cases have appointed receivers to assume the day-to-day administration of complex social institutions in order to protect such intangible constitutional rights as the right to an integrated public school education, or the right to be free from cruel and unusual punishment in a state prison system. ¹²⁶

Nothing in the court's "inherent equitable powers" should limit these adaptations of traditional equitable remedies to cases involving constitutional rights or public agencies. ¹²⁷ True, when reforming private organizations such as unions, ¹²⁸ courts must take special care to accommodate the first amendment's freedom of association, ¹²⁹ a concern less often present in the reform of public bureaucracies. But on the other hand, two of the strongest arguments against the use of intrusive, structural remedies in the public sector -- that they violate fundamental principles of federalism and the separation of powers ¹³⁰ -- are much less relevant to institutional reform litigation in the private sector.

This conclusion is consistent with the view that it is not the nature of the remedies involved as much as the emergence of the new substantive rights underlying those remedies that has made the judicially supervised reform of public institutions so controversial. ¹³¹ Indeed, even apart from the trusteeships routinely established in bankruptcy cases, courts have utilized receiverships regularly, and without great controversy, to enforce substantive rights in the private sector since long before the first [*931] school desegregation receivership. For example, in the corporate law area, courts have frequently appointed receivers to take charge of defendant corporations in order to enforce compliance with the securities laws. ¹³² Antitrust law recognized the availability of corporate receivers to enforce compliance as long ago as 1911. ¹³³

This pattern also holds true in the context of labor unions. Both state and federal courts have, for over fifty years, regularly relied upon their inherent equitable powers to appoint masters and receivers to remedy violations of the substantive laws regulating internal union affairs.

B. Common Law Union Receiverships, Before Landrum-Griffin . . . and After

The first suggestion that receivers could play a role in resolving internal union disputes appears in a 1932 New York case, Kaplan v. Elliot. ¹³⁴ A corrupt New York local which represented motion picture projectionists had been placed in an intra-union trusteeship by its international. The ousted local president challenged the trusteeship, alleging breaches of the union's constitution, and sought reinstatement pendente lite. The court denied the injunction but ordererd the international to conduct an election of temporary officers. It also indicated that, had the parties requested, it would "have been pleased to appoint" an impartial official of the American Federation of Labor "to act as receiver of the funds of the local," pending a final decision on the merits. ¹³⁵

When the international subsequently complained that conditions in the local made fair elections impossible, the court on its own motion appointed three receivers to hold and preserve the local's property and "to [*932] supervise the rights of individual members in their relation to the union and in the preservation of their contractual rights." ¹³⁶ Although an appellate court later overturned the receivership, ¹³⁷ it did so without opinion. Commentators at the time generally supported the availability of union receiverships under appropriate circumstances and speculated that the Kaplan reversal was less a rejection of union receiverships per se than a ratification of the international's intra-union trusteeship in the particular case. ¹³⁸

Whatever Kaplan's meaning, a line of New Jersey cases that developed only a few months later left no ambiguity. The first involved a "paper" Teamsters local established for the sole purpose of extorting dues payments from members who in fact received no union representation. ¹³⁹ When, pursuant to allegations of fraud and breach of trust, the court appointed a custodial "receiver-trustee" to manage the local's funds pendente lite, it stressed that its "inherent jurisdiction" to make such an appointment "is beyond question [and] does not depend upon or require statutory authority therefor." ¹⁴⁰

Subsequent union receiverships provide more ambitious efforts at institutional reform. The second New Jersey case, for example, Local 11, International Association of Bridge, Structural and Ornamental Ironworkers v. McKee, ¹⁴¹ involved a local which was not merely a dues collecting scam but instead was a legitimate union incapacitated by corruption, autocratic leadership, and a two-and-a-half year suspension of membership meetings. In an action based on fraud and violations of the union's constitution, the plaintiffs requested the appointment of a receiver endowed with "all of the powers, duties, and functions" of union officers, specifically including the power to conduct membership meetings and, when the court deemed appropriate, new elections of officers. ¹⁴² [*933] Again relying on its "general equity powers" and its "inherent jurisdiction," the court obliged by appointing a receiver not only to preserve the union's assets, but also to "operate its business in a legal manner, free of oppression by interlopers such as the International officers" until the election of new officers. ¹⁴³

Another New Jersey case was apparently the first in which a receiver himself petitioned the court for assistance in overcoming the defendant union's resistance to the receivership's operation. ¹⁴⁴ In that case, the court expressly endorsed an activist role for receivers, noting that sometimes "the status quo is a condition not of rest but of action," ¹⁴⁵ and under such circumstances, "[t]he receiver cannot remain quiescent. . . . Inactivity by him would jeopardize the existence of the local . . . ." ¹⁴⁶ The dearth of precedent in the area did not faze the court: "If there be no precedent in this state to fit the instant case, then one will be established. Where there is a wrong, there is a remedy." ¹⁴⁷

Courts eventually ordered the use of receivers or special masters in union corruption and union democracy litigation not only in New York and New Jersey, ¹⁴⁸ but in Alabama, ¹⁴⁹ Illinois, ¹⁵⁰ Indiana, ¹⁵¹ Missouri, ¹⁵² Oregon, ¹⁵³ and Pennsylvania ¹⁵⁴ as well. Courts sometimes used the threat of receiverships as a means of compelling structural reforms in [*934] unions, ¹⁵⁵ and some defendants accepted receiverships voluntarily. ¹⁵⁶ Even when courts were reluctant to appoint receivers, they sometimes achieved a similar effect by issuing extremely detailed, mandatory injunctions. ¹⁵⁷

By the late 1950s, then, the court-imposed union receivership had a twenty-five year track record in union reform litigation. While it was considered a harsh remedy, most commentators nevertheless understood the receivership to be available in extreme cases. ¹⁵⁸ And since few would deny that the corruption and racketeering in the Teamsters union in the late 1950s was extreme, ¹⁵⁹ it was not all that surprising when a bold group of union reformers sought to place an entire union international into receivership following Jimmy Hoffa's election to the Teamsters' presidency in 1957. ¹⁶⁰ Although the Cunningham v. English litigation resulted in a consent decree establishing a court appointed "Board of Monitors," rather than a receivership, to oversee major reforms in the Teamsters union, ¹⁶¹ that case was undoubtedly the high-water mark of union reform litigation in the pre-Landrum-Griffin Act era. It remains one of the most ambitious efforts at judicially supervised union reform ever undertaken. ¹⁶²

But in the end, the Board of Monitors was widely viewed as a failure. The common law union receivership subsequently fell into disuse, in [*935] large part because of the passage in 1959 of the Landrum-Griffin Act. ¹⁶³ The Act was a direct response to the corrupt and undemocratic union practices exposed by the McClellan Committee, and it provided alternative remedies to many of the abuses that the common law receiverships had been designed to remedy. ¹⁶⁴ Indeed, many of those receiverships had been ordered in response to abuses in the elections of union officers, and the comprehensive election remedies available under Landrum-Griffin's title IV would now preempt suits to overturn such elections. ¹⁶⁵

Nevertheless, apart from the statute's express limit on post-election remedies to those made available to the Secretary of Labor pursuant to title IV, ¹⁶⁶ nothing in the Landrum-Griffin Act preempts otherwise available state or federal remedies for union corruption or undemocratic practices. ¹⁶⁷ On the contrary, three separate provisions of the Act expressly provide for the retention of rights under other sources of law. ¹⁶⁸ According to the only court which has addressed the question, "One of the rights preserved [by those provisions] is the right [of a union member] to seek the imposition of a state court receivership over his local union to insure the financial stability of his union and to assure its proper operation as a labor organization." ¹⁶⁹ Indeed, the common law remedies for union corruption -- including court-appointed receiverships -- may be more readily available today than they were thirty or forty years ago, [*936] since old questions about a union's capacity to be sued ¹⁷⁰ and a federal court's jurisdiction to entertain suits to enforce a union's constitution have since been settled in favor of plaintiffs. ¹⁷¹

The common law doctrinal foundations of the union receivership, which have lain dormant for nearly thirty years, may seem quaint and obsolete in light of the statutory causes of action available under the Landrum-Griffin Act and civil RICO. Nevertheless, just as a resurgence of interest in state constitutional law has emerged in response to the shifting tides of federal constitutional analysis, ¹⁷² resort to the old common law doctrines may ultimately provide an attractive alternative to their more modern statutory counterparts in the context of union reform litigation.

In any event, the receivership remedy remains available under the Landrum-Griffin Act. ¹⁷³ Congress created three causes of action in the Act which authorize in broad language the courts to grant any "relief (including injunctions) as may be appropriate" to enforce title I's "Bill of Rights of Members of Labor Organizations," title II's reporting and disclosure requirements, and title III's protections against improper intraunion trusteeships. ¹⁷⁴ Similarly, title V's provision authorizing members to bring suit on their union's behalf against corrupt union officers for breach of their fiduciary duties provides not only for damages or an accounting and attorneys' fees but also for any "other appropriate relief." ¹⁷⁵

[*937] Only in the limited context of post-election enforcement of title IV's fair election provisions did Congress expressly consider and reject specific equitable remedies, such as receiverships for the purpose of administering a union's affairs while an election challenge is pending. ¹⁷⁶ But even there, the Act permits receiverships of a more limited nature, since it authorizes a court "to take such action as it deems proper to preserve the assets of the labor organization." ¹⁷⁷ At least one court has appointed a trustee for such purposes in a title IV proceeding. ¹⁷⁸

Thus, with the exception of post-election enforcement of title IV's fair election provisions, there is no reason to believe that Congress intended to deny courts their traditional equitable powers in remedying violations of the Landrum-Griffin Act. Congress used broad, open-ended language in describing the remedies available under the Act, and it was undoubtedly aware that as a remedial statute, Landrum-Griffin would be liberally construed. ¹⁷⁹ As the Supreme Court has repeatedly held, "Unless a statute in so many words, or by a necessary and inescapable inference, restricts the court's jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied." ¹⁸⁰

[*938] True, in enacting Landrum-Griffin, Congress was guided by the general principle that a "union should be left free to 'operate their own affairs, as far as possible;'" that union members "'are fully competent to regulate union affairs'" ¹⁸¹ with only "minimum interference by Government." ¹⁸² But to the extent that view counsels against the use of intrusive equitable remedies, the fact that it appears in the legislative history before the addition on the Senate floor of the union members' bill of rights undercuts its force. Indeed, that view was put forward for the purpose of justifying the controversial omission from the bill, as reported out of committee, of a union members' bill of rights. ¹⁸³ As finally enacted, Landrum-Griffin contemplates substantially more judicial interference with internal union affairs than the earlier versions described in the Senate reports. In any event, that courts should allow unions to run their own affairs "as far as possible" does not necessarily mean that the courts can never impose intrusive remedies such as receiverships; it may mean simply that they should use such drastic remedies only as a last resort.

C. Title VII and the Integration of Unions, Apprenticeship Programs, and Hiring Halls

Whether permanent or temporary, the demise of the common law union receivership a generation ago did not mean the end of union institutional reform litigation. In this decade, civil RICO has emerged as a modern, statutory basis for similar remedies. In the interim years, title VII of the Civil Rights Act of 1964 ¹⁸⁴ served as an importan