IN RE: ELIGIBILITY OF ALEX BENEDICT, Local Union 142.
Protest Decision 2011 ESD 109
Issued: February 9, 2011
OES Case No. E-032-011811-MW
Richard Knipp, secretary-treasurer of Local Union 142, filed an eligibility protest pursuant to Article XIII, Section 2(b) of the Rules for the 2010-2011 IBT International Union Delegate and Officer Election ("Rules"). The protest alleged that Alex Benedict is ineligible for nomination as delegate to the 2011 IBT convention.
Election Supervisor representatives Jeffrey Ellison investigated this protest.
Findings of Fact and Analysis
Alex Benedict was nominated for delegate at Local Union 142's nominations meeting held January 15, 2011. The protest alleged that Benedict is ineligible to serve as delegate if elected because his wife owns a trucking company that "has a financial interest in the outcome of a collective bargaining agreement negotiated by the Union with one of its signatory contractors." As such, the protest alleged that Benedict has a conflict of interest that, while permitting him to be a member of the local union, renders him ineligible for office in it.
Benedict formerly had an ownership interest in Benedict Ltd., an Indiana corporation that owned trucks used in the construction industry. In February 2002, he transferred his ownership interest to Carol Benedict, who was then and remains his wife. Until October 1, 2008, Benedict remained president of Benedict Ltd. Ms. Benedict was sole owner of Benedict Ltd. from February 2002 to January 2011, when she sold her entire interest to William Mack, a person not related by blood or marriage to either Benedict or Ms. Benedict.
For several years prior to the January 2011 sale of the business, Benedict Ltd. owned several trucks that it leased to Omega Trucking, a firm that is a member of a multi-employer association that is party of a two-county construction labor agreement with Local Union 142. For all or nearly all of that time, Alex Benedict was employed by Omega to drive one of the trucks that Benedict Ltd. leased to Omega. Benedict's wages and benefits were paid by Omega, which also made lease payments to Benedict Ltd. for the trucks. Omega's practice was to enter into one-year leases for the trucks, which it renewed annually. At the end of the construction season in late November and early December 2010, however, Omega did not renew the truck leases, and the trucks owned by Benedict Ltd. are currently idle and not under lease.
Carol Benedict told our investigator that she has sought to sell the business or some or all of its assets for some time. She finally concluded a sale for 100 percent of the company's stock on January 3, 2011. The sale of the stock included sale of its major assets, six trucks, which are titled to the company and were identified by vehicle identification number in the stock purchase agreement. On the same date the sale closed, Ms. Benedict resigned her office with Benedict Ltd. Since that date, neither Benedict, Ms. Benedict, nor any person related by blood or marriage to either of them has held an ownership interest or served as an officer, director or employee of Benedict Ltd. The current owner, William Mack, intends to seek a lease arrangement with Omega Trucking or another firm that will be effective when the spring construction season commences. The stock purchase appears to be an arms-length transaction.[1]
In November 2008, Benedict sought election as secretary-treasurer of Local Union 142. He was ruled ineligible for office at that time because his wife owned Benedict Ltd., which leased trucks to an employer that was under contract with Local Union 142. Benedict appealed his eligibility determination to the U.S. Department of Labor, which sustained the determination by letter-decision dated August 6, 2009, writing as follows:
[O]ne of the rights of the union position you sought to run for is to serve on the negotiating committee for the construction contract that establishes the hourly wage rate of the drivers of the trucks leased by Omega Trucking and other companies. … [A]s a potential negotiator and signatory of the construction contract, you would be in a position to negotiate the hourly wage rate for drivers and, at the same time, your wife would benefit from the truck rate that Omega would negotiate with her, or any of the other truck owners. This is the type of conflict of interest described in the Department's regulation. 29 CFR §452.47. Under these circumstances, the Department determined that the union properly ruled you ineligible for office under Article II, Section 2(g) of the union's constitution.
Protestor Knipp argued that the 2009 USDOL ruling still applies to render Benedict ineligible for office. We disagree. Neither Benedict, his wife, nor any person related to either by blood or marriage has an ownership interest in Benedict Ltd. or its trucks or serves as an officer, director or employee of Benedict Ltd. We further note that the office of delegate does not negotiate collective bargaining agreements with employers or employer groups. Accordingly, the conflict of interest on which the USDOL determination rested no longer exists.
For these reasons, we DENY the protest and find Benedict ELIGIBLE to serve as delegate if elected.
Any interested party not satisfied with this determination may request a hearing before the Election Appeals Master within two (2) working days of receipt of this decision. The parties are reminded that, absent extraordinary circumstances, no party may rely upon evidence that was not presented to the Office of the Election Supervisor in any such appeal. Requests for a hearing shall be made in writing, shall specify the basis for the appeal, and shall be served upon:
Kenneth Conboy
Election Appeals Master
Latham & Watkins
885 Third Avenue, Suite 1000
New York, New York 10022
Fax: (212) 751-4864
Copies of the request for hearing must be served upon the parties, as well as upon the Election Supervisor for the International Brotherhood of Teamsters, 1801 K Street, N.W., Suite 421 L, Washington, D.C. 20006, all within the time prescribed above. A copy of the protest must accompany the request for hearing.
Richard W. Mark
Election Supervisor
cc: Kenneth Conboy
2011 ESD 109
DISTRIBUTION LIST (BY EMAIL UNLESS OTHERWISE SPECIFIED):
Bradley T. Raymond, General Counsel
International Brotherhood of Teamsters
25 Louisiana Avenue, N.W.
Washington, D.C. 20001
braymond@teamster.org
David J. Hoffa
Hoffa Keegel 2011
1100 Connecticut Avenue, N.W., Ste. 730
Washington, D.C. 20036
hoffadav@hotmail.com
Ken Paff
Teamsters for a Democratic Union
P.O. Box 10128
Detroit, MI 48210-0128
ken@tdu.org
Barbara Harvey
1394 E. Jefferson Avenue
Detroit, MI 48207
blmharvey@sbcglobal.net
Fred Gegare
P.O. Box 9663
Green Bay, WI 54308-9663
kirchmanb@yahoo.com
Scott D. Soldon
3541 N. Summit Avenue
Shorewood, WI 53211
scottsoldon@gmail.com
Fred Zuckerman, President
Teamsters Local Union 89
3813 Taylor Blvd.
Louisville, KY 40215
fredzuckerman@aol.com
Robert M. Colone, Esq.
P.O. Box 272
Sellersburg, IN 47172-0272
rmcolone@hotmail.com
Carl Biers
Box 424, 315 Flatbush Avenue
Brooklyn, NY 11217
info@SandyPope2011.org
Julian Gonzalez
Lewis, Clifton & Nikolaidis, P.C.
350 Seventh Avenue, Suite 1800
New York, NY 10001-5013
jgonzalez@lcnlaw.com
Alex Benedict
1112 North 400 E
Fair Oaks, IN 47943
benedict@midway.net
Richard Knipp, Secretary-Treasurer
Teamsters Local Union 142
1300 Clark Road
Gary, IN 46404
rich@teamsters142.org
William C. Broberg
1108 Fincastle Road
Lexington, KY 40502-1838
wcbroberg@aol.com
Kathryn Naylor
Office of the Election Supervisor
1801 K Street, N.W.
Washington, D.C. 20006
knaylor@ibtvote.org
Jeffrey J. Ellison
214 S. Main Street, Suite. 210
Ann Arbor, MI 48104
ellisonesq@aol.com
[1] We decline to state in this decision the purchase price, because doing so may prove harmful to Mack's business interests. We note, however, that the price was in the six-figure range.