Protest Decisions

OFFICE OF THE ELECTION SUPERVISOR

for the

INTERNATIONAL BROTHERHOOD OF TEAMSTERS

 

IN RE: TEAMSTERS UNITED,           )               Protest Decision 2015 ESD 46

                                                                    )               Issued: October 30, 2015

            Protestor.                                       )               OES Case No. P-038-082615-FW     

__________________________________)

 

            Teamsters United filed a pre-election protest pursuant to Article XIII, Section 2(b) of the Rules for the 2015-2016 IBT International Union Delegate and Officer Election (“Rules”).  The protest alleged that Marty Frates promoted his candidacy for delegate using union resources, in violation of the Rules.

 

            Election Supervisor representative Michael Miller investigated this protest.

 

Findings of Fact

 

            Marty Frates is principal officer of Local Union 70 in Oakland, California.  Frates sent a letter dated August 17, 2015 to all IBT joint councils and local unions.  The letter appeared on Local Union 70 letterhead and bore 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

 

The two-page enclosure with this letter also appeared on Local Union 70 letterhead, was dated June 29, 2015, and was addressed to General President Hoffa, General Secretary-Treasurer Hall, and the General Executive Board.  It 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 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 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 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.

 

Frates told our 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 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).  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 campaign 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, 2015 letter to General President Hoffa and the other International officers to call attention to the predicted insolvency of the Central States plan in the near future, as well as problems involving select smaller plans.

 

Not receiving a response from the IBT, Frates sent the August 17, 2015 letter to all IBT joint councils and local unions together with the June 29 letter. 

 

Frates stated that he sent both letters after consulting with the local union’s attorney and obtaining his executive board’s approval.  Frates insisted to our investigator 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 Local Union 70 office, 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, supplying and stuffing envelopes, and postage came to $575.35, according to an itemized tally Frates supplied to our investigator.  

 

At a general membership meeting of Local Union 70 held September 12, 2015, Frates distributed copies of the June 29 and August 17, 2015 letters 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.”

 

Analysis

 

Article VII, Section 7(a)(1) of the Rules provides that “[e]ach candidate shall be permitted a reasonable opportunity, equal to that of any other candidate, to have his/her literature distributed by the Union, at the candidate’s expense.”  Article VII, Section 7(c) provides that “[e]ach candidate shall pay, on a reasonable basis, for the actual cost of distribution, including stationery, duplication, time required to do the work and postage for mailing.”  Article VII, Section 8(a) provides that “[n]o publication or communication financed, directly or indirectly, by a Union (including a social media site) may be used to support or attack any candidates or the candidacy of any person.”  Article XI, Section 1(b)(3) provides that “[n]o labor organization, including but not limited to the International Union, Local Unions and all other subordinate Union bodies, whether or not an employer,  may contribute, or shall be permitted to contribute, directly or indirectly, anything of value, where the purpose, object or foreseeable effect of the contribution is to influence, positively or negatively, the election of a candidate.  No candidate may accept or use any such contribution. These prohibitions extend beyond strictly monetary contributions made by a labor organization and include contributions and use of the organization’s stationery, equipment, facilities, and personnel.”  Article XI, Section 1(b)(6) provides that “[n]o Union funds or other things of value shall be used, directly or indirectly, to promote the candidacy of any individual. Use of the union’s official stationery with union’s name, insignia or other mark identifying the union is prohibited, irrespective of compensation or access.”

 

The June 29 letter by itself did not violate the Rules.  However, we find that the August 17 letter, accompanied by the June 29 letter, clearly breached the Rules in at least two respects.

 

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).

 

Frates contends to the contrary that he had the right and responsibility as a union official to report to the membership on a matter of concern to that membership, namely what he considered the dire financial condition of certain pension funds and the need to address those circumstances.  He grounds this contention on the principle Election Appeals Master Conboy explained in Martin, 95 EAM 18 (October 2, 1995), 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.”  In Lyons, 2006 ESD 279 (May 30, 2006), appeal withdrawn, 06 EAM 43 (June 14, 2006), the protest challenged an article published in the Wisconsin Teamster by then-IBT vice president Fred Gegare that joined a debate with TDU’s Convoy Dispatch over the viability of the Central States Pension fund.  We held:

 

Gegare’s article did not violate the Rules.  It addressed the funding and benefits paid by the Central States Pension Fund and, implicitly, the fund’s continued viability, issues of obvious interest and concern to members with stakes in the fund.  Gegare’s article was part of the ongoing debate on pension issues within the IBT and in the nation at large. 

 

Important to our holding in Lyons, however, was this finding:

 

[The article] did not refer to any pending election or support or attack any candidate. Merely because the article addressed an issue that also is debated in a pending election does not convert the article to impermissible union-financed campaigning.

 

A similar letter in Holzwarth, 2006 ESD 100 (February 27, 2006), was found not to violate the Rules because it “did not praise or attack any candidate or otherwise refer to the delegate or International officer election.  Moreover, it contained a factual report of the current financial condition of the local union.  Finally, credit for the improved finances and increased membership was shared broadly with the stewards without reference to their internal union political affiliation.”

 

            Likewise, in Hicks, 2006 ESD 110 (March 2, 2006), aff’d, 06 EAM 22 (March 15, 2006), a local union publication that was devoted to health care was held not to violate the Rules.  We noted that “the newsletter’s content appears to report factually on the health care plan and cannot be read as favoring positions of, or advocating for, the incumbent officers and business agents running as candidates in the delegate and alternate delegate election.”  Election Appeals Master Conboy affirmed, writing that “elected local officers should not, and cannot, be constrained by the Rules from discharging their responsibilities to the membership in reporting on matters of vital interest, as long as the reportage is politically neutral.”  (Emphasis supplied.)

 

In contrast to these decisions, Frates’ August 17 letter did refer to a coming election and his candidacy in it.  It portrayed him as a forward-thinking leader passionate about preserving pension rights for IBT members.  Presented in this context, his case is dissimilar with Lyons, Holzwarth, and Hicks.  Had Frates offered the same rhetoric without linking it to his delegate candidacy or the upcoming election, he would have reported and advocated to the membership on a matter of general concern without violating the Rules. 

 

However, Frates’ presentation was not politically neutral.  In this regard, it was similar to Hull, supra (union-funded letter to membership extolling the incumbent principal officer), and Scognamiglio, 2001 EAD 334 (May 1, 2001), aff’d, 01 EAM 66 (May 16, 2001) (union-funded letter informing membership of IRB decision concerning delegate candidate and referring explicitly to pending delegate election).

 

In reaching this conclusion, we reject Frates’ 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.[1]  The 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.

 

Accordingly, we GRANT the protest.

 

Remedy

 

When the Election Supervisor determines that the Rules have been violated, he “may take whatever remedial action is deemed appropriate.”  Article XIII, Section 4.  In fashioning the appropriate remedy, the Election Supervisor views the nature and seriousness of the violation as well as its potential for interfering with the election process.  “The Election Supervisor’s discretion in fashioning an appropriate remedy is broad and is entitled to deference.”  Hailstone & Martinez, 10 EAM 7 (September 14, 2010).

 

            We direct Frates and Local Union 70 to cease and desist from using union resources to support Frates’ candidacy in the local union delegates and alternate delegates election.  We further direct Frates to cease accepting union support for his candidacy. 

 

            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.

 

            A decision of the Election Supervisor takes immediate effect unless stayed.  Lopez, 96 EAM 73 (February 13, 1996).

 

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:

 

Kathleen A. Roberts

Election Appeals Master

JAMS

620 Eighth Avenue, 34^th floor

New York, NY 10018

kroberts@jamsadr.com

 

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, 1050 17^th Street, N.W., Suite 375, Washington, D.C. 20036, all within the time prescribed above.  A copy of the protest must accompany the request for hearing.

 

                                                                        Richard W. Mark

                                                                        Election Supervisor

cc:        Kathleen A. Roberts

            2015 ESD 46 

 

DISTRIBUTION LIST (BY EMAIL UNLESS OTHERWISE SPECIFIED):

 

Bradley T. Raymond, General Counsel

International Brotherhood of Teamsters

25 Louisiana Avenue, NW

Washington, DC 20001

braymond@teamster.org

 

David J. Hoffa

1701 K Street NW, Ste 350

Washington DC 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

 

Teamsters United

315 Flatbush Avenue, #501

Brooklyn, NY 11217

info@teamstersunited.org

 

Louie Nikolaidis

350 West 31^st Street, Suite 40

New York, NY 10001

lnikolaidis@lcnlaw.com

 

Julian Gonzalez

350 West 31^st Street, Suite 40

New York, NY 10001

jgonzalez@lcnlaw.com

 

David O’Brien Suetholz

515 Park Avenue

Louisville, KY 45202

dave@unionsidelawyers.com

 

Fred Zuckerman

P.O. Box 9493

Louisville, KY 40209

fredzuckerman@aol.com

 

Marty Frates

Teamsters Local Union 70

400 Roland Way

Oakland, CA 94621-0170

mfrates@teamsterslocal70.org

 

Michael Miller

P.O. Box 251673

Los Angeles, CA 90025-1673

miller.michael.j@verizon.net

 

Deborah Schaaf

1521 Grizzly Gulch

Helena, MT 59601

dschaaf@ibtvote.org

 

Jeffrey Ellison

214 S. Main Street, Suite 210

Ann Arbor, MI 48104

EllisonEsq@aol.com

Office of the Election Supervisor

for the International Brotherhood of Teamsters

1050 17^th Street, N.W., Suite 375

Washington, D.C.  20036

202-429-8683

844-428-8683 Toll Free

202-774-5526 Facsimile

ElectionSupervisor@ibtvote.org

www.ibtvote.org

 

October 30, 2015

Richard W. Mark

Election Supervisor

 

NOTICE TO MEMBERS OF TEAMSTERS LOCAL UNION 70

 

The Election Supervisor has found that Local Union 70 and its secretary-treasurer, Marty Frates, violated the Rules for the 2015-2016 IBT International Union Delegate and Officer Election (“Rules”) by using union resources to distribute delegate election campaign material of a candidate.

On August 17, 2015, Local Union 70 mailed delegate election campaign material of a candidate to all IBT local unions and joint councils.  The campaign material was printed on Local Union 70 stationery and was mailed at Local Union 70’s expense.  On September 12, 2015, Frates and others distributed this same material letters at the monthly meeting of Local Union 70 held that date.

The Rules prohibit use of union resources to support a candidate. 

The Election Supervisor will not permit any such violations of the Rules.  The Election Supervisor has ordered Frates and Local Union 70 to stop using union resources to support any candidate and has ordered Frates to pay back Local 70 for the union funds spent to distribute the campaign material.

The Election Supervisor has issued this decision in Teamsters United, 2015 ESD 46 (October 30, 2015).  You may read this decision at https://www.ibtvote.org/Protest-Decisions/esd2015/2015esd046.  

 

            Any protest you have regarding your rights under the Rules or any conduct by any person or entity that violates the Rules should be filed with Richard W. Mark, 1050 17^th Street, N.W., Suite 375, Washington, D.C.  20036, telephone: 844-428-8683, fax: 202-774-5526, email: electionsupervisor@ibtvote.org.

 

This is an official notice prepared and approved by Richard W. Mark, Election Supervisor for the International Brotherhood of Teamsters.  It must remain posted on this bulletin board through November 30, 2015 and must not be defaced or covered up.