OFFICE OF THE INDEPENDENT HEARING OFFICER
IN THE MATTER OF |
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DOCKET NO. |
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LOCAL UNION 52 NORFOLK, VA |
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99-16T |
ORDER AND
MEMORANDUM
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This Order and Memorandum deals with
the emergency trusteeship imposed on Local Union 52 (“Local 52”) by the General
President on April 9, 1999.
A hearing in the above captioned matter was held before the Laborers’ International Union of North America (“LIUNA”) Independent Hearing Officer (“IHO”) on May 18, 1999. Based upon the evidence presented by the LIUNA Associate General Counsel, the imposition of a trusteeship of Local 52 is warranted, and should continue.
FINDINGS OF FACT
1. Pursuant to Section 3 of the LIUNA Ethics and Disciplinary Procedure and Article IX, Section 7 of the LIUNA Constitution, the LIUNA General President may appoint a trustee when:
The General President finds, in his opinion, that action by
him is necessary for the purpose of correcting corruption or
financial malpractice, assuring the performance of collective
bargaining agreements or other duties of a bargaining
representative, restoring democratic procedures or otherwise
carrying out legitimate objects of such subordinate body or
the International Union, or to protect the organization as an
institution….
LIUNA International Union Constitution, Article IX, Section 7.
2. The LIUNA General Executive Board Attorney (“GEB Attorney”) is delegated the powers of the LIUNA General President “to impose and review the imposition of trusteeships over any district council, local, or other entity within the Union.” See LIUNA Ethics and Disciplinary Procedure, Section 5.
3. Pursuant to Section 5 of the LIUNA Ethics and Disciplinary Procedure, the LIUNA IHO “shall preside over and provide rulings in” the imposition of all trusteeships.
4. Local Union 52 is located in Norfolk, Virginia and consists of approximately 205 School Board Employees from the cities of Newport News, Portsmouth, and Norfolk, Virginia.
5. On December 17, 1998, International Auditor John Tupes performed an audit of Local Union 52 books and records for the period of January 1998 through October 30, 1998. Findings 6-12 are based on the Tupes Audit.
6. The audit revealed that as of October 30, 1998, Local 52 was insolvent, with a negative net worth of $31,751.
7. The audit revealed that Local 52 is in arrears of more than $7000 to the International Union in per capita tax and owes over $21,000 to the LIUNA Local Union and District Council Pension Fund.
8. The audit also revealed that Local 52 has been under reporting its membership to the International Union for per capita tax purposes.
9. Local 52 does not have a hiring hall or job referral system.
10. Local 52 does not undergo an annual audit.
11. Local 52 does not have sufficient bonding coverage; it currently has a limit of $7,500, per occurrence, however there is a requirement of an additional $12,500 occurrence to be in compliance.
12. Local 52 does not have an annual operating budget in place.
13. Local 52 has experienced a precipitous decline in membership. In March of 1998, Local 52 had 340 members and by October of 1998, 205 members, and currently only 196 members. See Report of Joel Blodgett, April 16, 1999. Blodgett’s testimony is detailed in findings 24-27, infra.
14. Bases on Tupes’ report on January 29, 1999, Inspector General W. Douglas Gow recommended that Local 52 be placed under immediate supervision.
15. Terrence M. O’Sullivan, Vice President and Regional Manager, approached Local 52 Business Manager Ronald Toran (“Toran”) in an effort to secure a voluntary supervision over Local 52.
16. A meeting regarding a voluntary supervision was held on March 16, 1999. The Executive Board of Local 52, Stephanie McCarthy, LIUNA Associate General Counsel, Shelly Simon, Assistant General Counsel, John Tupes, and LIUNA International Representatives Mark Lynsky and Joel Blodgett attended the meeting.
17. Associate General Counsel Stephanie McCarthy presided over the meeting. McCarthy explained that a voluntary supervision would allow the current officers of Local 52 to remain in place and work with the International to resolve Local 52’s financial difficulties.
18. The Local 52 Executive Board expressed its position that the prior Executive Board was responsible for the debts of Local 52 and that the current Executive Board wished to “clear the slate.”
19. International Auditor John Tupes suggested that a payment schedule be implemented to allow Local 52 to remit its debts. The Executive Board rejected the idea of a payment schedule.
20. The President of Local 52 rejected the suggestion of a voluntary supervision as well.
21. By letter dated March 30, 1999, General President Arthur Coia placed Local 52 under emergency supervision stating, “the local union is in financial distress and will not survive without immediate intervention by the International Union.” General President Coia named Regional Manager Terrence M. O’Sullivan as Supervisor.
22. Despite the imposition of the emergency supervision, O’Sullivan continued his attempts to work with the officers of Local 52 and asked the officers of Local 52 to remain in place.
23. After assuming the position of Supervisor, O’Sullivan learned that certain letters had been found in the Local 52 office which indicated that Toran was attempting to unlawfully disaffiliate the membership of Local 52 to another union. Based upon this evidence, O’Sullivan removed all members of the Local 52 Executive Board from office on April 9, 1999.
24. Joel Blodgett, the International Representative assigned to the Virginia and North Carolina District Council, appeared as a witness.
25. Blodgett testified that on April 8, 1999, while reviewing the records of Local 52 in the Local 307 office, he discovered files which indicated to him that Toran was disaffiliating members and establishing a separate union known as Virginia Independent Classified Employees (“VICE”).
26. Blodgett discovered a notice to the membership entitled “Important Change.” The notice indicated that the new name of the union would be VICE, but that the address would remain the same. Blodgett testified that when he discovered the notice, he had no knowledge whether it had been distributed.
27. Blodgett testified that he also discovered a notice regarding a meeting of April 3, 1999, which stated, “Emergency Meeting of Membership Currently Known as Local 52.” Blodgett interpreted the “currently known as Local 52” language to indicate that a change in the name was imminent.
28. By letter dated March 31, 1999, Toran informed O’Sullivan Local 52 planned to disaffiliate from LIUNA. See Blodgett Report.
29. By letter dated March 31, 1999, Toran informed the school districts of Norfolk, Newport News and Portsmouth that Local 52 was no longer affiliated with LIUNA and directed the school boards to discontinue payroll deduction of Union dues.
30. On April 21, 1999, Toran gave a presentation to the Norfolk School Board explaining that Local 52 will no longer exist and that it will now be known as VICE.
31. By letter dated April 9, 1999, General President Coia informed the membership that the Emergency Supervision had been transformed to an Emergency Trusteeship.
32. Ronald Toran made a statement at the hearing in which he stated that he chooses not to be affiliated with LIUNA. He explained that Local 52’s debts are due to the mismanagement of the prior Executive Board. He further stated that he requested an audit long before Tupes conducted his audit. He testified that he was instrumental in building up the membership of Local 52 and that the decline occurred as a result of the International Union’s decision to divide the membership of Local 52 between Local 352 as well. Toran testified that in his view, O’Sullivan is only aware of a small portion of the problems surrounding Local 52 and is therefore not in a position to place Local 52 under trusteeship.
33. Joshalan Mack, a member of Local 52, testified that her pension has been lost and that she attributes the problems of Local 52 to Arthur Freeman (of the prior Executive Board).
CONCLUSIONS
1.
Local 52 is
experiencing serious financial problems.
2.
Local 52 has
failed to pay per capita taxes to the International Union since May of 1998.
3.
Local 52 has not
made payments to the International Pension Fund.
4.
Local 52 has not
made payments to the District Council Pension Fund since August of 1998.
5.
Local 52 has
failed to maintain adequate financial practices and is not in compliance
with
the requirements of the LIUNA Constitution.
6.
Business Manager
Ronald Toran unlawfully attempted to disaffiliate Local 52
from
LIUNA.
7.
There has been a
breakdown of democratic procedures within Local 52.
8.
Based upon the
foregoing, a trusteeship is necessary to restore democratic
procedures,
to ensure that the entity survives as a Local Union, and to ensure that the
legitimate objectives of a LIUNA local are carried out.
DISCUSSION
Toran’s complaint that the
outstanding debts are the result of the prior administration is not a reason to
withhold the trusteeship. This is a
financial matter, and the condition of the union is paramount.
Toran’s explanation does not relieve
the dire conditions of Local 52.
Toran’s argument regarding the decision to split the membership with
another local may have merit; however, that problem should be dealt with under
the administration of the trusteeship.
The IHO cannot decline to order the continuation of a trusteeship of a
union in such dire straits on the basis of alleged past management mistakes by
LIUNA. The IHO notes that Local 52 was
offered an opportunity for supervision, under which such problems could have
been addressed, and the Executive Board refused.
DECISION
Based upon the evidence presented by the International Union, the trusteeship of Local 52 should be continued to protect the organization as an institution and to restore democratic procedures. The General President is authorized to continue the Trusteeship over Local 52 in conformance with the provisions of Article IX, Section 7 of the LIUNA International Union Constitution.
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s/Peter Vaira
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PETER F. VAIRA |
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INDEPENDENT HEARING OFFICER |
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Date: May 28, 1999 |
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Local Union 52 Terrence M. O’Sullivan Stephanie McCarthy, Esquire |
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