Chapter I

Fiduciary Duties

Section 1: Improper Influences

Because an agent of the Union must make each decision based solely on the best interests of the Union, it is necessary that the agent be free of improper outside influences that would interfere with an ordinary person's objectivity in making the decision. Any such influence creates a prohibited conflict of interest.

    A. Financial Influences

    Agents of the Union are prohibited from participating in decisions that could have a substantial effect on their personal wealth or income, except that they may participate in decisions concerning their own compensation by the Union or under a collective bargaining agreement.

    An agent's conflict of interest arising from financial influence may be permitted, however, if the agent makes a written request for a waiver from the International Ethics Office and the International Ethics Officer grants the waiver in writing.

    A person participates in a decision if the person makes the decision, recommends the decision, approves the decision, or provides advice to or collects information for the decision maker. Discussing or voting on a matter at a membership meeting does not constitute participating in a decision on the matter. Also, selecting the lowest bidder does not constitute participating in the decision to select the vendor if the person did not participate in preparing the request for bids and the system of competitive bidding has been approved by the General Secretary-Treasurer.

    1. Conflicts of Interest – Ownership Interests
      1. General Rule
        An agent of the Union is prohibited from participating in a decision on behalf of the Union (i) to do substantial business with the agent, the agent's spouse, or the agent's minor child or (ii) to enter into a transaction or engage in conduct that could significantly affect a company in which the agent has a substantial interest.
         
      2. Selection of Vendors
        An agent of the Union is prohibited from participating in a decision whether to select a vendor for the Union if (i) the vendor is the agent, the agent's spouse, or the agent's minor child or (ii) the vendor is a company in which the agent has a substantial interest. An affiliate, by resolution adopted by its executive board, may establish an exception to this rule for purchases from vendors who do only a limited amount of business with the affiliate. The exception shall state that this rule does not apply to a vendor if the vendor provides services or supplies totaling less than a certain sum per occasion and less than a certain sum during any twelve-month period.
         
        1. Principal Officer
          A principal officer's conflict of interest cannot be avoided by delegating to a subordinate the authority to select the vendor, because the risk of improper influence by the principal officer creates an appearance of impropriety.
      3. Collective Bargaining
        1. Executive Board
          Members of an affiliate's executive board are prohibited from having a substantial interest in a company with which that affiliate bargains collectively or is actively seeking to bargain collectively.
        2. Business Agents and Organizers
          A business agent or organizer is prohibited from having a substantial interest in a company with which the business agent or organizer deals on behalf of the Union.
      4. Union Investments
        An agent of the Union with an ownership interest in a piece of real estate or a substantial interest in a company is prohibited from participating in a decision whether to invest funds of the Union in the piece of real estate or the company. A loan to a company is an investment in the company.
    2. Conflicts of Interest - Financial Dealings

      1. Compliance with Law
        Agents of the Union are prohibited from accepting money or other things of value from any employer or any agent of an employer in violation of applicable law.

      2. Fiduciary Duty
        In addition to the duty to comply with applicable law, agents of the Union have a fiduciary duty not to solicit or receive any gift or gifts that would interfere with an ordinary person's objectivity in dealing with the donor on behalf of the Union.

      3. Bribes and Kickbacks
        The solicitation or receipt of a bribe or kickback is an extreme case of improper financial dealing. Solicitation or receipt of a bribe or kickback in connection with Union business or a Union benefit plan is prohibited.
    3. Conflicts of Interest – Evasions
      The use of fronts or other evasive tactics to attempt to circumvent the literal terms of the rules set forth in Paragraphs 1 and 2 is prohibited. Each agent of the Union is prohibited from engaging in any subterfuge to avoid the prohibitions of this Code by concealing the agent's financial interests or dealings or otherwise doing or attempting to do indirectly what the agent is prohibited from doing directly.

    B. Improper Associations

    1. Organized Crime
      Members and agents of the Union are prohibited from knowingly associating with racketeers. A racketeer is a member or associate of an organized crime family or any other criminal group. A person "knowingly associates" with a racketeer if the person makes a calculated choice to associate with the racketeer despite knowing the racketeer's involvement with organized criminal activities. Knowing association is excused, however, for (1) contacts that are necessary to conduct necessary, legitimate Union business and (2) purely social relations with immediate family members.
    2. Barred Members

      1. General Rule
        No member or agent of the Union shall knowingly communicate with a member suspended for misconduct or a barred member concerning Union business, regardless of the reason for the bar or suspension, except to obtain information essential to the conduct of legitimate Union business when the information is not available from any other source.

      2. Racketeers
        No member or agent of the Union shall knowingly associate with anyone who has been barred from the Union for associating with a racketeer. Knowing association is excused, however, for (1) contacts that are necessary to conduct necessary, legitimate Union business and (2) purely social relations with immediate family members.

Section 2: Use Of Union Property

    A. Union Purpose

    Union property can be used only for Union purposes. Agents of the Union are prohibited from using Union property for personal purposes, except as provided in Paragraphs 1 and 2.

    1. Paid Use

An agent of the Union may use Union property if the use is authorized and the agent pays fair market value for the use.

  1. Use as Part of Compensation or as an Accommodation to Agents and Employees of the Union

Agents of the Union may use Union property if the use is part of their authorized compensation or is authorized as an accommodation to agents and employees of the Union.

The General Secretary-Treasurer, in consultation with the International Ethics Officer, shall prepare a model rule authorizing certain uses of Union property as an accommodation to agents and employees of the Union. Each Union affiliate is encouraged to adopt the rule or a modification of the rule designed to meet the particular needs and desires of the affiliate. Violation of such a rule is a violation of this Code. If an affiliate does not adopt a rule on the use of Union property, this Code will be enforced as if the affiliate had adopted the model rule. That is, use of Union property in accordance with the model rule will be presumed to have been implicitly approved and all other use of Union property will be presumed to have been prohibited. 

    B. Publications

    Union publications should refrain from personal attacks on members of the Union. If a member of the affiliate that produces the publication feels that he or she has been subjected to a personal attack in the publication, the member may request to respond to the attack. The response shall be in the form of a letter to the editor. If the request to respond is denied by the editor or responsible party, then either party to the dispute may raise the matter with the International Ethics Officer, who shall promptly resolve the dispute. The right to respond is not unlimited. The duty of a Union publication to publish a response depends upon the truth of the response, whether the response disputes the truth of the alleged attack, and whether the response advocates dual unionism, non-payment of dues, crossing an authorized picket line, or breach of the Union's legal or contractual obligations.

    C. Confidential Information

    Confidential information maintained in Union files belongs to the Union. A member or employee of the Union who has access to such information is prohibited from exploiting or releasing it for personal gain or other non-Union purpose. Likewise, members or employees of the Union who have access to confidential information maintained in files of Union benefit plans are prohibited from using it for personal gain or for the purpose of embarrassing or harassing a member or beneficiary. Disclosures to the International Investigations Unit are not prohibited by this Subsection.

    D. Transition in Office

    Books, records, and other property of the Union belong to the Union, not to the agents of the Union. Those leaving Union office or employment with the Union must transfer all such property to their successors. In particular, they must preserve Union records and turn them over to their successors. If records are being held at a storage facility or the office of the affiliate's attorney or accountant, they must disclose the location of the records to their successors. During the period from (1) the date of notice of the meeting or meetings for nomination of candidates for office to (2) the end of the first day of the next term of office, agents of the Union must preserve at the Union office (or an authorized storage facility or the office of the affiliate's attorney or accountant) the following records:

Minutes of all meetings, including general membership meetings, executive board meetings, and committee meetings;

Financial books and ledgers;

    • Documentation necessary to support the financial books and ledgers;
    • Records of grievance proceedings, including arbitrations;
    • Collective bargaining agreements, whether or not still in effect;
    • Official correspondence;
    • Deeds, mortgages, leases, appraisals, insurance policies, and depreciation schedules on property;
    • All documents (such as TITAN messages) originating from any other Union affiliate.

    Wrongful destruction or retention of Union records is prohibited. [See IBT Constitution, Article XIX, §9].

    E. Theft and Embezzlement

    Theft or embezzlement of money or property of the Union or a Union benefit plan is prohibited.

 

Section 3: Expenditure Of Union Money

    A. Union Purpose

    Union money is to be used only for Union purposes. Using this money for other purposes is a breach of fiduciary duty.

    B. Proper Authorization

    Union money can be spent only in accordance with the IBT Constitution and applicable bylaws.  Unauthorized spending is prohibited.

    C. Excessive Spending

    The executive board of each affiliate is responsible for maintaining the financial solvency of the affiliate.

    D. Selection of Vendors

    Vendors should be selected solely on the basis of cost, quality, timeliness, location, convenience, and whether the vendor is unionized. Knowingly paying excessive amounts for goods or services is a breach of fiduciary duty.

    E. Explanation of Decision

    To ensure compliance with Subsection D, the principal officer of each affiliate is responsible for documenting the reasons for selecting vendors in accordance with rules promulgated by the General Secretary-Treasurer in consultation with the International Ethics Officer.

    F. Compensation

    1. Increases in Compensation
      1. Compliance with Bylaws
        Increases in compensation must be awarded in compliance with Union bylaws. Paying or receiving an increase not in compliance with the bylaws is prohibited.
      2. Affordability of Increase
        If an increase in salary, allowance, or benefits, or an expansion of covered expenses will jeopardize the ability of the Union to pay its bills as they come due or require the Union to reduce essential services, the increase or expansion is improper. Any officer permitting such an increase or expansion has breached a fiduciary duty to the Union.
      3. Prior Authorization
        Increases in compensation must be authorized in accordance with the affiliate's bylaws before any payment is made. On occasion it is appropriate to increase compensation for services previously performed. But such increases must serve a Union purpose and the reason for such an increase must be disclosed in the minutes of the executive board meeting.
      4. Disclosure
        Whenever the principal officer of a local union decides to increase the salary, allowances, or benefits of any member of the executive board, or to expand the expenses that may be reimbursed, the principal officer shall inform the executive board at its next meeting. The minutes of the executive board meeting shall be promptly prepared and shall set forth the change in compensation and its effective date. The decision shall be announced (by reading the executive board minutes or otherwise) at the next regularly scheduled general membership meeting of the local union after preparation of the minutes of the executive board meeting.
        Whenever the executive board of a local union decides to increase the salary, allowances, or benefits of any member of the board, or to expand the expenses that may be reimbursed, the decision of the executive board, including the change in compensation and its effective date, shall be promptly set forth in the minutes of the executive board meeting. The decision shall be announced (by reading the executive board minutes or otherwise) at the next regularly scheduled general membership meeting of the local union after preparation of the minutes of the executive board meeting.
      5. Documentation of Policies
        Each affiliate shall have written policies regarding allowances, expenses, and fringe benefits that are permitted by the affiliate, including, but not limited to:
        • Salaries
        • Allowances and expenses
        • Vacations
        • Sick Leave
        • Holidays
        • Funeral leave
        • Health and welfare benefits
        • Pensions
        • Severance pay
        • 401 (k) plans
    2. Expenses
      1. General Rule
        Agents of the Union are entitled to reimbursement of reasonable expenses incurred in the conduct of Union business.
      2. Excess Reimbursement / Double Billing
        Agents of the Union are not entitled to reimbursement beyond their actual expenses, such as by receiving reimbursements for expenses that are covered by allowances or that have already been reimbursed.
      3. Reasonableness of Expenses
        To be reimbursable, expenses should be reasonable in amount. Each affiliate must prepare guidelines indicating what expenses are appropriate. Guidelines should indicate the limits or prohibitions placed on reimbursement for such items as hotel expenses, meals, transportation (such as whether first class travel is permitted), parking fees, laundry, telephone calls home, and spouse expenses. Violations of guidelines should ordinarily be handled as internal personnel matters. But it is a violation of the Code if (i) the principal officer violates the guidelines or (ii) a member or employee of the affiliate violates the guidelines and the amount by which the guidelines is exceeded is $250.00 or more on a single occasion or totals $1,000.00 or more during a twelve-month period.
      4. Legal Expenses
        Reimbursement for legal expenses of an agent of the Union is proper only if (i) it serves a Union purpose and (ii) it is specifically approved by the executive board and, if reimbursement is by a local union, by a vote at a properly called general membership meeting. If the agent is defending a criminal, civil, or administrative claim that the agent violated a legal duty owed to the Union or its members, payment of legal fees is improper unless the agent has been exonerated before any payment is made.
      5. Record Keeping
        To be reimbursed, an expense must be verified by documentation describing the date the expense was incurred, the place the expense was incurred, the nature or purpose of the Union business requiring the expense, the goods or services received, and the recipients of the goods and services.
    3. Duties in Return for Compensation - Fair Day's Work

      Agents of the Union owe a fair day's work for a fair day's pay.

G. Transition in Office

During the period between the date of election and the end of the term of office, no extraordinary expenditure of local Union funds shall be made without the approval of the officers-elect and the membership.

 

Section 4: Loans And Gifts

    A. Loans

    1. Agents of the Union shall not intentionally grant or receive loans of Union funds, other than advances for travel expenses or travel allowances.
       
    2. Agents of the Union shall not grant or receive loans in excess of the amount permitted by law.
       

    B. Gifts of Union Funds and Property

    The law requires Union property to be used only for a Union purpose. This requirement sets an important restriction on gifts of Union property.

    1. Charitable Gifts
      Charitable giving is permitted.
    2. Political Contributions
      Lawful political contributions are permitted.
    3. Other Gifts
      Except for charitable gifts and political donations, gifts of automobiles or other items of substantial value are prohibited.
    4. Sales for Less than Fair Market Value
      Sales of Union property for less than fair market value constitute gifts to the extent that the fair market value exceeds the sale price.

 

Section 5: Abuse Of Union Position

    A. Dealings with Subordinates

Agents of the Union are prohibited from using their positions to coerce members or subordinate employees into providing money or services for any purpose. It is not coercion to use reasonable means of persuasion in support of lawful Union objectives.

B. Sham Contracts and Memberships

1. Illegitimate Collective Bargaining Agreements (Sham Contracts)

The Union may enter into, renew, or maintain collective bargaining agreements only for legitimate Union purposes. Agents of the Union shall not intentionally encourage or assist the Union in entering into, renewing, or maintaining illegitimate collective bargaining agreements. Legitimate purposes include:

a. Representing employees.
b. Providing benefits, such as pension and health-and-welfare benefits, to owner-operators who fall within the Union's jurisdiction, where permitted by law.
c. Continuing to provide benefits to independent contractors who were formerly employees covered by a Union collective bargaining agreement providing similar benefits.

Illegitimate agreements include:

a. Agreements that permit racketeers to obtain or maintain Union membership or Union pension and health-and-welfare benefits.
b. Agreements that cover only owners or that are designed solely to provide pension or health-and-welfare benefits to owners.
c. Agreements that are not intended to be enforced or honored or that are not enforced or honored.


2. Illegitimate (Sham) Memberships

Agents of the Union shall not intentionally encourage or assist the Union in permitting a person to obtain or maintain an illegitimate membership in the Union. Illegitimate memberships are memberships not permitted by the IBT Constitution or applicable law. Illegitimate memberships include:

a. Membership of a racketeer.
b. Membership of an owner pursuant to an illegitimate collective bargaining agreement.
c. Membership of a person who was required by IBT Constitution Article XVIII, Section 6(a) to be issued a withdrawal card.

 

 

Section 6: Union Benefit Plans

Any member who serves as a fiduciary of a benefit plan covering members or employees of the Union has the following duties with respect to service as a fiduciary to the plan:

    A. Best Interests of Participants and Beneficiaries

    The fiduciary shall faithfully serve the best interests of the participants and beneficiaries of the plan in accordance with the requirements of applicable law.

    B. Prudent-Person Rule

    The fiduciary shall exercise duties with respect to the plan with the care, skill, prudence, and diligence under the circumstances that a prudent person familiar with such matters would use acting under similar circumstances.

    C. No Personal Profit

    Neither the fiduciary nor any member of the fiduciary's family shall profit personally from his or her position in the plan, other than through benefits payable under the generally applicable rules of the plan or reasonable compensation payable by the plan for services rendered the plan, which services are necessary for the establishment or operation of the plan.

    D. No Payments to Full-time Officers or Employees of Union

    A full-time paid officer or employee of an affiliate who is a fiduciary of a union benefit plan shall not receive compensation from the plan if he or she receives full-time pay from the affiliate. The affiliate, however, may receive reimbursement from the plan for the fiduciary's employee-related expenses in connection with services rendered to the plan by a fiduciary who is paid by the affiliate.

    E. Fair Share of Expenses

    The fiduciary shall ensure that the affiliate pays its fair share for any services or facilities it shares with the plan, including, but without limitation, office space, clerical and administrative staff, and telephone and other office equipment and supplies.

    F. Reports and Contributions

    The fiduciary shall take reasonable steps, consistent with his or her obligations under applicable law, to ensure that all employers who are required to contribute to the plan under a collective bargaining agreement fully comply with their reporting and contribution obligations.

    G. Administrative and Other Expenses

    The fiduciary shall not cause the plan to incur unreasonable administrative or other expenses not necessary for the establishment or operation of the plan, in accordance with established law.

    H. Cooperation with Negotiators

    The fiduciary shall cooperate with Union negotiating committees by responding to requests from any chair or co-chair of a negotiating committee for information and assistance needed for bargaining, to the extent not inconsistent with his or her fiduciary obligations to the plan.

 

Section 7: Fair Representation

    A. Explanation of Failure to Pursue Formal Grievance

    If the Union decides not to pursue a grievance after filing of a formal grievance, the Union shall provide the member with an explanation of why it is not continuing to pursue the grievance.

    B. Referral Lists (Hiring Halls)

    A local union operating a referral system shall base referrals only on objective standards. In determining the order in which workers are referred, the standards cannot be arbitrary or discriminatory, nor can the standards be applied in an arbitrary or discriminatory fashion.

    To assure compliance with standards, the procedure by which the referral list is operated must be in writing and available upon request to any member seeking a job referral. Because of the great difficulty in reconstructing what has happened in the past with respect to a referral process, the local must have a system for contemporaneously recording how each referral is placed.

 

Section 8: Accountability

Each officer and employee of the Union has a duty to make reasonable efforts to prevent and correct violations of this Code by fellow officers and employees. Members of the executive board of an affiliate have the following specific duties:

  1. They must actively participate in the work of the board, including attending board and membership meetings, reading minutes, and reviewing the performance of the principal officer and staff of the affiliate.
  2. They must have general knowledge of the affiliate's books and records and take reasonable steps to assure that the affiliate's records and accounts are accurate.
  3. They must investigate or cause to be investigated evidence or reports of officer or staff violations of this Code. When appropriate, they should seek assistance from an attorney or other professional, or from the International Ethics Officer or International Investigations Unit.
  4. They must take reasonable steps to prevent or stop anyone from holding a position with their affiliate who is prohibited from holding that position because of a prior violation of law.