Protest Decisions

ELECTION APPEALS MASTER

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IN RE: TEAMSTERS UNITED,

            PROTESTOR.                                                                        2015-2016 EAM 4   (KAR)                                                                                                                DECISION RE ESD 46

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Protest Decision 2015 ESD 46, regarding Marty Frates, secretary-treasurer of Teamsters Local Union 70, was issued on October 30, 2015 (OES Case No. P-038-082615-FW).  On November 10, 2015, Mr. Frates filed an appeal of ESD 46.[1]  By Notice of Hearing sent to all identified Interested Parties, a telephonic hearing was scheduled for November 23, 2015.  On November 19, 2015, the Election Supervisor submitted a written response to the appeal (November 19 Letter).

A telephonic hearing was held on November 23, 2015.  The following individuals attended the hearing:  Marty Frates; Jeffrey J. Ellison, Esq., on behalf of the Election Supervisor (OES); Michael Miller (OES Investigator); Deborah Schaaf (OES Regional Director); Julian Gonzalez, Esq. (Teamsters United); David J. Hoffa; and Barbara Harvey, Esq. (Teamsters for a Democratic Union/TDU).  Supplemental submissions were received from the Election Supervisor and from Attorney Harvey on November 24, 2015.

            For the reasons set forth below, the appeal of ESD 46 is DENIED, and the decision of the Election Supervisor is AFFIRMED (as modified below with respect to the schedule for complying with the remedial provisions of ESD 46).

Findings of Fact

The facts pertaining to this appeal are undisputed.

Marty Frates is secretary-treasurer of Teamsters Local Union 70 in Oakland, California.  Mr. Frates sent a letter dated August 17, 2015 (August 17 Letter), to all IBT joint councils and local unions.  The letter appeared on Local Union 70 letterhead and bore Mr. Frates’s signature.  It carried the subject line “Central States Pension” and stated the following:

  Dear Brothers and Sisters:

My name is Marty Frates.   I am the Secretary-Treasurer of Teamsters Local 70 in Oakland, California.   I have been an elected Officer and Official since 1972.   I am passionate about what I do and what I believe.   On June 29, 2015, I sent the attached letter to General President James P. Hoffa and the General Executive Board and to date I have not yet received a response, which is unfortunate.

As outlined in my June 29, 2015 letter, some things have to be done to fix the Central States Pension Plan as well as other pension plans in similar financial condition.  I know the suggested resolution is difficult but if there is a better one, what is it?   My sole purpose of distributing this letter is to rally support to do the right thing which is to ensure that our members have the pension they deserve.  If we do nothing, anyone that can count knows it will go broke.   I cannot stand by and watch this happen and the negative impact it will have on our members and the Teamsters Union.

I plan on getting elected as a Delegate to the 2016 IBT Convention.  I’ve been a delegate at  every convention  since 1976  and  I will  be  making this  an  issue loud  and  clear. Hopefully this matter will be resolved by then and we can get on to other important issues.

Fraternally,

Marty Frates

Secretary-Treasurer

            Annexed to the August 17 letter was another letter on Local Union 70 letterhead, dated June 29, 2015 (June 29 Letter), addressed to General President Hoffa, General Secretary-Treasurer Hall, and the General Executive Board, also signed by Mr. Frates.   The June 29 Letter, the union-funded distribution of which is not challenged by the Election Supervisor, began:

There are some difficult issues facing the Teamsters Union and our members in the near future.    I want  to  put  on  the  table  some  suggestions  that  I know  are  difficult  and controversial but they have to be addressed.  I want to make it very clear this letter is not political.  It is factual and direct to the point and offers a solution.  Everyone should know I am not a candidate, however, I know that we have to do what is right for the members, especially when it comes to Pension and other issues.

The August 17 Letter provided Frates’ assessment of the financial health of the Central States Pension Plan, the climate for a legislative remedy for the situation, and an acknowledgment that all regarded a reduction of pension benefits as undesirable.   The August 17 Letter then proposed a solution of reducing accrual rates for existing employees  and  pension  benefits  for  existing retirees  or  risk  bankruptcy of the  fund  with catastrophic loss to all participants.  The August 17 Letter concluded as follows:

I ask for your response within 30 days upon receipt of this letter.  Hopefully you will be supportive and we can work together but it needs to be made clear to everyone that if there is no response or support, it is rejection.  I will have no choice but to send this letter to every Joint Council, Local Union, and then distribute to the members.  I don’t want this taken as a threat, it’s a fact.  I will do anything to protect our members.  If you have any questions please feel free to call.

Mr. Frates told the OES investigator that the solvency of the various IBT pension funds has been a concern for him and his executive board for the past several years. This increasingly high profile problem had been the subject of bills in Congress, including the Miller-Kline bill (which Mr. Frates said would allow restructuring and  reduction of future retirement benefits) and the Sanders-Kaptur bill (which he said would head off benefit cuts for insolvent funds by cutting current tax loopholes of higher income taxpayers).   Mr. Frates said he had researched IBT pension funds and found some dangerously underfunded, with no projected increased contributions to offset the eventual retiree draw. He said he had been waging his own campaign to get the IBT General Executive Board to address this issue for at least the past year, and viewed his advocacy as an administrative and managerial responsibility he had to the membership rather than a political cause.   Accordingly, he and his executive board decided to send the June 29 Letter to General President Hoffa and the other International officers to call attention to the predicted insolvency of the Central States Pension Plan in the near future, as well as problems involving select smaller plans.

            Mr. Frates did not receive a response from the IBT, and on August 17, 2015, sent the August 17 Letter quoted above to all IBT joint councils and local unions together with the June 29 Letter.

Mr. Frates told the OES Investigator that he sent both letters after consulting with the local union’s attorney and obtaining his executive board’s approval.  Mr. Frates asserted that these letters were not political or designed to disparage any candidate’s campaign, but were designed to rally support to reform the IBT pension plans that were in financial distress.   He saw this advocacy as an essential function of his responsibility as a union officer and a legitimate part of official union business. Accordingly, the letters appeared on local union letterhead, were written and printed at the office of Local Union 70, and were mailed using union funds.   The letters went to all IBT joint councils and locals unions nationwide (said to total 390) using an IBT-published roster.  The labor and materials, cost of preparing and  applying  labels and supplying  and  stuffing  envelopes,  and  postage  came  to  $575.35, according to an itemized tally Mr. Frates supplied to the OES investigator.

At a general membership meeting of Local Union 70 held on September 12, 2015, Mr. Frates distributed copies of the June 29 Letter and August 17 Letter to all in attendance.  The letters as distributed at the membership meeting were identical in all respects to the letters mailed to joint councils and local unions nationwide, including their appearance on local union letterhead.  They were reproduced at local union expense. The August 17 letter as distributed to the membership retained the following sentences: “I plan on getting elected as a Delegate to the 2016 IBT Convention.  I’ve been a delegate at every convention since 1976 and I will be making this an issue loud and clear.”

Decision of the Election Supervisor

            The Election Supervisor analyzed the protest applying the Rules for the 2015-2016 IBT International Union Delegate and Officer Election (Rules), Article VII, Sections 7(a)(1), 7(c), and 8(a), and Article XI, Sections 1(b)(3) and 1(b)(6).  The Election Supervisor found that Local Union 70 and its secretary-treasurer, Marty Frates, violated the Rules by using union resources to distribute the August 17 Letter, which the Election Supervisor found to constitute election campaign material of a candidate for delegate.  The Election Supervisor found that the June 29 Letter by itself did not violate the Rules, but that the August 17 Letter, accompanied by the June 29 Letter, “breached the Rules in at least two respects.”  ESD 46 at 3.

First, the letter constituted campaign literature as it not only announced the delegate candidacy of Marty Frates to the IBT membership at large and to members of Local Union 70 in particular but promoted the candidacy by portraying Frates as a long-time elected union official who is “passionate about what I do and what I believe,” who seeks to “rally support to do the right thing … to ensure that our members have the pension they deserve,” and who will as an elected delegate make pension justice “an issue loud and clear” at the IBT convention.   We conclude that the letter was a union campaign contribution to Frates because it had the purpose, object or foreseeable effect of influencing positively the election of Frates as a delegate.

Second, since the letter was prepared and paid for by the local union and was distributed using its stationery, envelopes, and personnel, it constituted an improper campaign contribution under Article XI, Sections 1(b)(3) and 1(b)(6) of the Rules.   Hull, 2001 ESD 153 (February 10, 2001),   aff’d , 01 EAM 37 (February 21, 2001).

ESD 46 at 3-4.  The Election Supervisor’s decision also relied upon Scognamiglio, 2001 EAD 334 (May 1, 2001), aff’d, 01 EAM 66 (May 16, 2001).

            The Election Supervisor rejected Mr. Frates’s argument that the August 17 Letter was permissible because it reflected his right and responsibility as a union official to report to the membership on a matter of concern to the membership, i.e., the dire financial condition of certain pension funds and the need to address those circumstances, and that he is entitled to use union publications to express his views. 

The Election Supervisor also rejected Mr. Frates’s contention that the mailing to local unions and joint councils did not violate the Rules because the members of those bodies were not eligible to vote in Local Union 70’s delegate and alternate delegate election and therefore could not support him there.   The Election Supervisor found:

 Rules grant no such exception for the use of union resources.  Rather, they forbid union contributions that have the “foreseeable effect … to influence … the election of a candidate.”  Article XI, Section 1(b)(3).   The Rules permit any member, regardless of local union membership, to make a campaign contribution to any candidate for delegate or alternate delegate, even if that candidate is a member of another  local  union;  we  find  it  foreseeable  that  Frates’  letter  may  produce  such  support  for  his candidacy.  Moreover, we find it foreseeable that the letters will induce a positive reaction toward Frates among IBT members who are not members of Local Union 70 that will redound to his credit and influence the voters in Local Union 70’s delegate and alternate delegate election.

Based upon the above findings, the Election Supervisor granted the protest.

Remedy Imposed by the Election Supervisor

The Election Supervisor directed Mr. Frates and Local Union 70 to cease and desist from using union resources to support Frates’ candidacy in the election for local union delegates and alternate delegates.  The Election Supervisor further directed Mr. Frates to cease accepting union support for his candidacy.

The Election Supervisor further directed that:

Within three (3) days of receipt of this decision, we direct Local Union 70 to post the notice attached to this decision titled “Notice to Members of Local Union 70” on all union worksite bulletin boards under the local union’s jurisdiction.  The notice shall remain posted through November 30, 2015 and shall not be defaced or covered up during the posting period.   We impose this remedy to inform members of the Rules’ prohibition on use of union resources to support a candidate and of the violations committed by Frates and Local Union 70.  Within three (3) days of completing the posting, Local Union 70 shall submit a declaration of posting to our office.

Within three (3) days of receipt of this decision, we direct Local Union 70 to mail to the same list it used to distribute the August 17 letter package the notice attached to this decision titled “Notice to IBT Local Unions and Joint Councils.”   We impose this remedy to inform those bodies of the Rules’ prohibition on use of union resources to support a candidate and of the violations committed by Frates and Local Union 70.  Within three (3) days of completing the mailing, Local Union 70 shall submit a declaration of mailing to our office.

Further, we direct Frates to reimburse Local Union 70 from personal funds the sum of $575.35 for the expense the local union incurred in mailing the August 17 letter to all local unions and joint councils.   Such reimbursement shall be completed within three (3) days of issuance of this decision. Within three (3) days of the reimbursement, Frates shall submit a declaration of reimbursement to our office.

Finally, we direct Frates to pay from personal funds the actual costs of the notice mailing to local unions and joint councils, including printing or photocopying, paper, envelopes, labels, postage, and local union staff time at their regular hourly rates.  Such reimbursement shall be completed within three (3) days of completing the mailing.  Within three (3) days of the reimbursement, Frates shall submit a declaration of reimbursement to our office that includes detail of the amounts paid for each cost item.

Appeal by Mr. Frates

            Mr. Frates argued in his November 10 Appeal that “the Election Supervisor’s decision takes my letter entirely out of context and his conclusion that my letter constituted electioneering is wrong.”  Appeal at 1.  He asserts that his letter was “preparing the ground for discussion at the Convention of an issue the leadership was refusing to address.”  Mr. Frates cited Judge Conboy’s decision in Martin, 95 EAM 18 (October 2, 1995), in which the then-Election Appeals Master observed that:

An incumbent has a “right and responsibility,” as a union officer, to “advise and report to the membership on issues of general concern” to the membership, and is “entitled to use union publications to express [his] views.”  [Citations omitted.]

Appeal at 3.  Mr. Frates acknowledged that his reference to being a candidate was “perhaps unartful but should not become the basis on which to ignore the context and stifle the very purpose of members’ use of the Convention as a forum for issues vital to the Union.”  Appeal at 2.  Mr. Frates further pointed out that the cases relied upon by the Election Supervisor, e.g., Hull, 2001 EAD 153, and Scognamiglio, 2001 EAD 334, can be distinguished because the communications found to violate the Rules occurred within weeks of the election, and specifically referred to the election, whereas the timing of the August 17 Letter was related to pending federal legislation regarding the Central States Pension Plan.  Appeal at 2-3.

            Mr. Frates concluded:

Viewed in the context of the national federal legislative timeline, the Election Officer's decision has a chilling effect on the duty of an officer of a Local Union to advise and report to the membership on issues of general concern.   My two lines in reference to the Convention should not be allowed as the basis for the Election Rules to undermine free debate over an issue vital to this membership organization.

Appeal at 3.  On November 13, 2015, Mr. Frates requested a stay of ESD 46 pending the decision on this appeal, which was not opposed by the Election Supervisor.

Pre-Hearing Submission by the Election Supervisor

            In the Election Supervisor’s November 19 Letter to the Election Appeals Master, the Election Supervisor acknowledged a union official’s “right and responsibility” to “advise and report to the membership on issues of general concern,” even when the subject matter of the union official’s report is, or is likely to be, an issue in the coming electoral campaign.  November 19 Letter at 1.  The Election Supervisor argued, however, that the August 17 Letter constituted an impermissible “use of union resources to support or attack a candidate.”  The Election Supervisor pointed out that the August 17 Letter “implicitly criticized General President Hoffa and the IBT’s General Executive Board for failing to take decisive if painful action to preserve the funds and the pensions they can provide,” and quoted the conclusion of the August 17 Letter referring to Mr. Frates’s candidacy for delegate to the 2016 IBT convention.  November 19 Letter at 1.  The Election Supervisor reiterated his conclusion that the August 17 Letter was a union campaign contribution to Mr. Frates because “it had the purpose, object or foreseeable effect of influencing positively the election of Mr. Frates as a delegate” by announcing his candidacy and “stating in forceful terms a central plank of his platform.” November 19 Letter at 1-2.  The Election Supervisor acknowledged that “[h]ad Frates stopped short of identifying himself as someone who ‘plan[s] to get elected Delegate to the 2016 IBT Convention,’” and as someone who would make the issue of pension protection “loud and clear” at the convention, “his union funded communication likely would not violate the rules.”  November 19 Letter at 2.  Finally, the Election Supervisor argued that “taken to its logical end,” Mr. Frates’s position “is that so long as he discusses an issue of concern to the union membership in a union-funded publication to that membership, he is free also to promote his candidacy.  This position grants campaign rights to incumbent union officials that otherwise are unavailable to members without access to union-funded publications.”  November 19 Letter at 2.

Hearing on the Appeal of ESD 46

            As noted above, a telephonic hearing was held on November 23, 2015.  At the hearing Mr. Frates argued that the ESD 46 “undermines free speech.”  He stated that he mentioned the Convention because it is a place where union leadership “cannot avoid answering questions” regarding the pension issue.  Mr. Frates acknowledged that the concluding paragraph of the August 17 Letter was “a poor choice of words,” and that he “probably should not have said that he would be a candidate.”  Mr. Frates asserted that he had not read the Rules, and that he did not intend the August 17 Letter to be “campaign literature.”[2]

Decision of the Election Appeals Master

The appeal by Mr. Frates is DENIED, and ESD 46 is AFFIRMED for substantially the reasons set forth in ESD 46 and the Election Supervisor’s November 19 Letter (summarized above).  For purposes of this appeal, it is not necessary to determine whether Mr. Frates intended the August 17 Letter to be campaign literature.  The applicable Rules with respect to union-funded publications do not require intentional violation.  As noted by the Election Supervisor, a violation of the Rules is established as long as the publication has the “foreseeable effect” of influencing positively the election of a candidate.  With respect to Mr. Frates’s argument that the Convention and election are months away, I note that although the union-funded publications in some of the cases relied upon by the Election Supervisor occurred closer to the election, a significant factor in many prior decisions – including the Martin decision relied upon by Mr. Frates – is the explicit mention of the upcoming election.  Moreover, the August 17 Letter not only mentions the Convention, but also Mr. Frates’s candidacy for delegate – which he himself acknowledges was inappropriate.  While the publication of  the August 17 Letter was arguably not an egregious violation of the Rules in light of its timing and “context,” the facts fully support the Election Supervisor’s decision, as well as the remedy imposed.

            Mr. Frates is directed to comply with the remedial provisions of ESD 46 no later than December 3, 2015.  The worksite bulletin board notice shall remain posted until December 31, 2015.

SO ORDERED.

/s/___________________________________

KATHLEEN A. ROBERTS

ELECTION APPEALS MASTER

DATED:  NOVEMBER 30, 2015