Protest Decisions

January 11, 1996

VIA UPS OVERNIGHT

James P. Hoffa

January 11, 1996

Page 1

James P. Hoffa

2593 Hounds Chase

Troy, MI 48098

Ron Carey, General President

International Brotherhood of Teamsters

25 Louisiana Avenue, N.W.

Washington, DC 20001

John Sullivan, Associate General Counsel

International Brotherhood of Teamsters

25 Louisiana Avenue, N.W.

Washington, DC 20001

Susan Davis, Esq.

Cohen, Weiss & Simon

330 W. 42nd Street

New York, NY 10036

Steven Kaplan

Krakow & Kaplan

1161 San Vincente Boulevard

Suite 1015

Los Angeles, CA 90049

James P. Hoffa

January 11, 1996

Page 1

Re:  Election Office Case No. P-264-IBT-SCE

Gentlepersons:

A pre-election protest was filed pursuant to Article XIV, Section 2(b) of the Rules for the 1995-1996 IBT International Union Election (“Rules”) by James P. Hoffa, a candidate for general president.  The protester alleges that certain conduct engaged in by the IBT in a lawsuit in which a former employee sued the International union for race and age discrimina-tion violated Article XII, Section 1(b) of the Rules.  High v. Int’l Bhd. of Teamsters,

CV 93-3185-AWT(Sx) (C.D.Cal.).  The protester specifically cites three different aspects of the litigation as improper campaign contributions which have the “purpose, object or foreseeable effect of influencing the reelection of Ron Carey.”  First, the protester alleges that in settling the litigation the IBT insisted upon confidentiality provisions to enhance

James P. Hoffa

January 11, 1996

Page 1

Mr. Carey’s campaign.  Second, in a related contention, the protester asserts that the IBT sought the confidentiality language to keep Mr. Hoffa from being apprised of the settlement.  Finally, the protester argues that the settlement was structured to pay the amounts to the plaintiff largely out of the Teamsters Retirement and Family Protection Plan (“Retirement Plan”).  The protester asserts the settlement was structured in this fashion expressly to avoid fully reporting the amount of the settlement to the membership in the reports the IBT is required to file with the U.S. Department of Labor under the Labor-Management Reporting and Disclosure Act, as amended.  

After the protest was filed, the IBT attempted to seek withdrawal of the settlement in the High case, stating in papers filed with the Court entitled “Supplement to Status Report and Memorandum Regarding Settlement of Case” (“Supplemental Report”) that the plaintiff had breached the terms of the settlement by providing Mr. Hoffa with information regarding the terms of the settlement on the transcript of court proceedings on the settlement.  In the Supplemental Report, the IBT attached the protest by Mr. Hoffa in this case.  On

December 12, 1995, Mr. Hoffa asked the Election Officer to amend his protest, contending that the IBT’s efforts to withdraw the settlement based upon his protest were retaliation against Mr. High and himself, in violation of Article XIV, Section 1 of the Rules.

The IBT responds that the settlement of the litigation had no connection whatsoever to the current election campaign.  The terms of the settlement, the IBT argues, serve the legitimate institutional interests of the IBT as an employer and a progressive union in preserving the confidentiality of the settlement.  The IBT notes that it has “good reasons to believe that without a secure confidentiality provision, this settlement might be adversely publicized by High’s witnesses as an IBT concession that it engaged in race discrimination.”  The IBT further defends that there is no logic to that portion of the protest which claims the payment mechanism is a violation of the Rules.  They argue that the contemplated payment mechanism is entirely lawful.  If Mr. High had prevailed in his discrimination suit, he would have been entitled to reinstatement and the corresponding pension benefits.  As to the claim concerning the IBT’s attempt to withdraw the settlement, the IBT argues that its papers filed with the Court had nothing to do with Mr. Hoffa’s campaign and that Mr. High is not protected by the Rules and did not file any election protest.  Moreover, the IBT argues that it has already settled with Mr. High and has specifically repudiated any language in this court filing which “suggest that the IBT made any decision not to settle the case due to Mr. High’s tangential involvement in filing the election protest.”  Finally, the IBT notes that it had not authorized the language in the Supplemental Report and that the IBT had instructed local counsel to withdraw the submission and to repudiate any language that suggested that the IBT had decided not to settle the case because of Mr. Hoffa’s protest or Mr. High’s tangential involvement in the protest.[1]

The protest was investigated by Regional Coordinator Bruce Boyens.

James P. Hoffa

January 11, 1996

Page 1

Thomas High sued the IBT for race and age discrimination following his discharge from employment as a general organizer for alleged poor performance.  On October 30, 1995, one day before the trial date scheduled in his case, Mr. High, through counsel, accepted a settlement offer from the IBT for $87,000.  The settlement agreement provided for Mr. High to receive about $3,000 from the union’s general fund and to be reinstated for a short time in order to be entitled to approximately $84,000 in pension benefits to be paid from the Retirement Plan.

On October 31, Mr. High’s attorney and the attorney retained by the IBT for this litigation appeared before U.S. District Court Judge Wallace Tashima.  Mr. High’s attorney objected that subsequent to his written acceptance of the settlement offer on October 30, the IBT faxed him a new offer which added the following language:  “This final settlement agreement must contain firm and exceptionally protective confidentiality provisions.”  When questioned by the Court about the importance of a confidentiality provision, local counsel for the IBT testified, in pertinent part, as follows:

This is a case that is intertwined with a high degree of politics going on at the Teamsters Union.  Ron Carey is up for reelection next year.  He’s being opposed by the son of James Hoffa . . . And, in fact, the bulk of the witnesses that Mr. High was going to be calling are political opponents of Mr. Carey.  So the nature of a settlement in this context . . . is very sensitive and subject to exposure during the political campaign.

The Court granted the plaintiff’s oral motion to enforce the settlement agreement as originally agreed upon, stating that an offer had been made and accepted on October 30.  The Court found the confidentiality clause was not part of that offer.  Moreover, the judge stated, such a clause would be unenforceable as the terms of the settlement were disclosed at the hearing and are therefore a matter of public record.  The Court declined to issue a written order or ruling, stating that the parties should rely on the transcript of the proceedings.

Pointing to the testimony of the IBT counsel quoted above, the protester characterizes the IBT’s efforts to keep the settlement agreement confidential as “the determined efforts of IBT lawyers to cover up the whole matter for the express purpose of enhancing Mr. Carey’s reelection chances.  Mr. Hoffa cites the Election Officer’s decision in Giacumbo, P-001-IBT-PNJ, et al. (September 29, 1995), aff’d as modified, 95 - Elec. App. - 32 (KC) (November 1, 1995) in support of his argument that the attempt to impose confidentiality is a prohibited campaign contribution.

Article XII, Section 1(b) prohibits a labor organization from contributing “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 . . .” 

The situation in Giacumbo is clearly distinguishable from the instant protest. 

James P. Hoffa

January 11, 1996

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Mr. High, a long-time employee of the IBT, sued the union for discrimination in employment.  There is no evidence that Mr. High’s discharge benefited the candidacy of Mr. Carey in any way, or that the subsequent litigation and settlement had any connection to Mr. Carey’s campaign.

                Looking at the specific claims of the protester, the Election Officer notes that it is very common for employers like the IBT and within the IBT’s institutional interests to attempt to settle lawsuits of this type in order to avoid the expense and stress of trial.  It is reasonable to believe the actions of the IBT’s attorney reflected this goal.  The mechanism of the settlement agreement reached by the parties, with Mr. High to receive most of the money from the Retirement Fund was reasonable in structuring a settlement.  Thus, there is no evidence to connect the settlement itself to any right protected under the Rules.

As to the confidentiality provision sought by the IBT, the Election Officer finds that it is within the union’s institutional interests to attempt to maintain the confidentiality of settlement agreements, especially in cases involving claims of discrimination.  According to the IBT, the testimony of its outside counsel at the October 31, 1995 hearing referring to the International election “simply reflect[s] the fact that people with political axes to grind were lining up to testify for High and there would likely be inaccurate portrayals of the settlement to the detriment of the IBT’s institutional interests.”

The Election Officer finds the explanation of the IBT--that its attempt to impose confidentiality on the settlement agreement was motivated by the union’s fear of adverse publicity--to be a reasonable, non-election-related basis for its conduct.  Accordingly, the Election Officer finds that the conduct of IBT counsel did not constitute a contribution to

Mr. Carey’s campaign, in violation of the Rules.

Mr. Hoffa also claims that the filing of the Supplemental Report on December 11, 1995 asking the Court to withdraw the settlement agreement constituted retaliation against Mr. High and Mr. Hoffa because his protest filed on December 7 was  “based on evidence (a court transcript) allegedly obtained from High’s counsel.” 

Article XIV, Section 1 of the Rules protects the right of a union member to file a protest with the Election Officer “free from retaliation or threat of retaliation by any person or entity.”  The Election Officer has consistently held that the right to file a protest “go[es] to the heart of the safeguards mandated by the Rules and the Consent Order.”  Sullivan, P-084-LU745-SCE (June 10, 1995), Crawley, P-098-LU988-PNJ (June 30, 1995), aff’d, 95 - Elec. App. - 1 (July 14, 1995).

Although the protest is clearly referenced in the Supplemental Report, seeking withdrawal of the settlement cannot be construed as retaliation against the protester since he was not involved in the litigation itself.  Moreover, the IBT has repudiated the reference to the protest and has withdrawn the Supplemental Report.              

For the foregoing reasons, the protest is DENIED.

James P. Hoffa

January 11, 1996

Page 1

Any interested party not satisfied with this determination may request a hearing before the Election Appeals Master within one day of receipt of this letter.  The parties are reminded that, absent extraordinary circumstances, no party may rely upon evidence that was not presented to the Office of the Election Officer in any such appeal.  Requests for a hearing shall be made in writing and shall be served on:

Kenneth Conboy, Esq.

Latham and Watkins

885 Third Avenue, Suite 1000

New York, NY 10022

Fax (212) 751-4864

Copies of the request for hearing must be served on the parties listed above as well as upon the Election Officer, 400 North Capitol Street, Suite 855, Washington, D.C. 20001, Facsimile (202) 624-3525.  A copy of the protest must accompany the request for a hearing.

Sincerely,

Barbara Zack Quindel

Election Officer

cc:               Kenneth Conboy, Election Appeals Master

Bruce Boyens, Regional Coordinator