Protest Decisions

November 30, 1998

VIA UPS OVERNIGHT

James P. Hoffa

November 30, 1998

Page 1

James P. Hoffa

2593 Hounds Chase

Troy, MI 48098

Hoffa Slate

c/o Patrick J. Szymanski, Esq.

Baptiste & Wilder

1150 Connecticut Avenue, NW

Suite 500

Washington, DC 20036

Tom Sever, Acting General

  President/Secretary-Treasurer

Int’l Brotherhood of Teamsters

25 Louisiana Avenue, NW

Washington, DC 20001

David L. Neigus

Acting General Counsel

Int’l Brotherhood of Teamsters

25 Louisiana Avenue, NW

Washington, DC 20001

General Executive Board

Int’l Brotherhood of Teamsters

25 Louisiana Avenue, NW

Washington, DC 20001

Metz Slate

c/o Jim Smith

2833 Cottman Avenue

Philadelphia, PA 19149

George O. Suggs, Esq.

Wilburn & Suggs

1015 Locust

Suite 818

St. Louis, MO 63101

Bradley T. Raymond, Esq.

Finkel, Whitefield, Selik,

  Raymond, Ferrara & Feldman

32300 Northwestern Highway

Suite 200

Farmington Hills, MI 48334

James P. Hoffa

November 30, 1998

Page 1

Re: Election Office Case No. PR-397-IBT-EOH

Gentlemen:

James P. Hoffa, a candidate for general president, and the Hoffa Unity Slate, filed a pre-election protest pursuant to Article XIV, Section 2(b) of the Rules for the 1995-1996 IBT International Union Delegate and Officer Election (“Rules”) against IBT Acting General President and General Secretary-Treasurer Tom Sever and the IBT.  The protesters allege that Mr. Sever recently implemented significant pay increases and bonus payments to IBT employees, without any involvement of the General Executive Board.  As this action was taken shortly before the mailing of the ballots in the International Officer Rerun Election, the protesters contend that Mr. Sever and the IBT utilized union resources with the purpose, object and foreseeable effect of buying votes and/or facilitating a scheme to have the monies diverted to

James P. Hoffa

November 30, 1998

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Mr. Sever’s slate or campaign.

The IBT responds that IBT employees had not received raises in a long time, Mr. Sever had been attempting to raise salaries since 1998, the raises were given to all non-bargaining unit personnel (which included non-IBT members) and the raises were based upon the employee’s date of hire.

The protest was investigated by Deputy Election Officer Benetta M. Mansfield.

The ballots for the International Officer Rerun Election were mailed on Monday, November 2, 1998.                On October 31, 1998, Mr. Sever sent a memorandum to 209 employees at the IBT headquarters advising them of a salary adjustment effective September 1, 1998.  In the memorandum, Mr. Sever wrote:

During this administration, the IBT has undergone many changes to have the Union truly be working for the members.  This has resulted in significant progress in having the members become involved in their Union and to the benefit of all members.  This progress could not have been possible without the hard work and efforts of the IBT staff.  The past couple of years have been extremely difficult times at the IBT, yet I am proud of how the staff has continued to work for the members.  I sincerely appreciate all of your efforts and am pleased to provide you with this salary increase.

The salary increases were provided to all IBT non-bargaining unit personnel, with the exception of the attorneys (who had previously received a salary increase), recently hired employees and a few part-time non-bargaining unit employees.  In addition, six other employees received one-time bonuses.  Of the 209 employees who received the salary increases, 134 were IBT members and 75 were not members of the IBT.  Of those receiving the bonuses, four were IBT members and two were not.

For those who received salary amounts designated as international representatives and organizers, those employees hired in 1992 or 1993 received a $5,000 raise; those hired in 1994 or 1995 received a $2,500 raise and those hired in 1996 or 1997 received a $1,500 raise.[1]

James P. Hoffa

November 30, 1998

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The other employees receiving the raises included various other classifications such as cafeteria workers (8 employees who received a three percent raise); security staff (11 employees); non-bargaining unit secretarial and support staff, the international auditors, [2] and all of the management staff (including non-GEB division directors, department directors and managers).

The IBT presented the investigator with memoranda demonstrating that a raise for international representatives and organizers had been proposed by Mr. Sever and others at least since 1997.  On March 12, 1997, Mr. Sever sent then General President Ron Carey a memorandum proposed a $5,000 increase for the international representatives and organizers who became employees in 1992, and had not received an increase since that time.  An attached list included 33 employees.  The increase was not given.  On January 7, 1998, Organizing Director Robert Muehlenkamp sent a memo to Mr. Sever proposing $5,000 raises for those organizers who had not received a raise in 5 ½ years; and $2,500 for the other organizers. On June 18, 1998 Tom Sever drafted a memo to Director of Human Resources Howard Edwards proposing salary increases for international representatives, DRIVE representatives and organizers effective June 1, 1998 which had a list of 32 employees attached.  That increase was placed on hold.  On October 31, 1998, Mr. Sever implemented the salary increase in dispute here.

The investigator extensively interviewed Director of Accounting Joe Selsavage. 

Mr. Selsavage stated that the pay raises in the March 1997 memo were not granted by Mr. Carey because he felt at the time, the IBT was not in a financial position to grant them.  However,

Mr. Sever continued to want to grant the raises and the issue was brought up in numerous conversations between Aaron Belk, Executive Assistant to Mr. Carey, Mr. Sever, Jim Bosely, Executive Assistant to Mr. Sever, and Mr. Selsavage.  Mr. Selsavage recalls that in the fall of 1997, when the IBT realized that there would be a rerun election, they urged Mr. Sever to put the issue on hold because they did not want a pay raise to look like he was trying to influence the outcome of the election.  When Mr. Sever did a memo in January, 1998, Messrs. Bosley and Selsavage once again urged Mr. Sever to put it “on hold” due to the rerun election. 

James P. Hoffa

November 30, 1998

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Mr. Selsavage stated that they spoke to General Counsel Earl Brown and Mr. Brown advised them that Mr. Sever had a right to grant the pay raise so long as it was fair and equitable.  Nevertheless, Messrs. Bosley and Selsavage urged Mr. Sever to hold the raises.  When Mr. Sever wrote the June memo, it was shortly after he had announced his affiliation with the John Metz Slate.  Again, Messrs. Bosley and Selsavage convinced Mr. Sever to hold the raises.  In late September, Mr. Sever stated that he was determined to grant the pay raises and this would be his last opportunity before he might leave his position as Acting General President and General Secretary-Treasurer.  Rather than just including the international representatives and organizers, Mr. Sever decided to give raises across the board to those employees who had not received raises since the onset of Mr. Carey’s administration or their hire date, and therefore included all IBT employees, excluding only those in another bargaining unit (who had received contractual raises), the attorneys (who had received a raise earlier in the year), recent hires and a few part-time non-bargaining unit employees.

The yearly increase in costs to the IBT for the raises is $640,000, which is 5.5 percent of the IBT’s total payroll costs. 

The IBT Constitution contains several provisions regarding the authority to set salaries of certain employees, without referral of the matter to the GEB.  For example, Sam Carter, Executive Assistant to the General President, received a $5,000 increase.  The IBT Constitution at Article V, Section 1(c) reads:

The person holding the position of Executive Assistant to the General President, while working under orders of the General President, shall be paid a salary, allowances and expenses fixed by the General President.

As to Organizers, international representatives and international auditors, Article V, Section 1(d) of the IBT Constitution, reads:

General Organizers and International Representatives shall be appointed by the General President and while working under his orders shall receive a salary as determined by the General President and reported to the General Executive Board.  International Auditors shall be appointed by the General Secretary-Treasurer and shall receive a salary as determined by the General Secretary-Treasurer and reported to the General Executive Board.  The total salary of General Organizer, International Representative or International Auditor shall not exceed that of the General President.

As to clerical, technical and professional employees, the IBT Constitution reads, at Article IX, Section 8:

The General President and General Secretary-Treasurer, respectively, shall have the power to employ or retain such clerical, technical and professional assistance for their respective departments as each may from time to time determine.  Such persons shall be paid reasonable salaries or professional fees from the general fund; salaries shall be appropriately classified so as to provide for uniformity of compensation for the general type of work in both departments. 

James P. Hoffa

November 30, 1998

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Therefore, under the provisions of the IBT Constitution, Mr. Sever had the authority to act, and in some instances, was obligated to then report his actions to the General Executive Board.

The protesters contend that the raises and bonuses violate the Rules because under Article XII, Section 1(b), Mr. Sever utilized union funds 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 . . ..”  The protesters also contend that the salary increases and bonuses were funneled into Mr. Sever’s campaign.  The protesters have offered absolutely no evidence to support this contention and therefore the Election Officer refuses to address it.

Mr. Sever is a candidate for office on the Metz Slate.  However, the circumstances here lead the Election Officer to the conclusion that the raises and bonuses did not violate the Rules.  First, the documentation indicates that Mr. Sever had long proposed raises for the international representatives and organizers, which comprise 75 of the employees who received the salary increases.  Removing these employees from the total number receiving the raises, would leave only 59 other members who received salary increases, as opposed to 75 non-members.  Second, those receiving the pay raise included supporters of Mr. Leedham[3] and Mr. Hoffa.[4]  Third, in each category or job classification receiving raises, all of the employees in that classification received raises. 

The only support offered by the protesters to support their theory that the pay increase violated the Rules is Hodgson v. Mine Workers, 344 F. Supp. 17 (D.D.C. 1972).  In that case the District Court found that the Union violated Section 401(g) of the Labor-Management Reporting and Disclosure Act when it timed and manipulated salary increases of its employees to secure their support for incumbent officers.  The evidence does not support the same finding here because the pay raises for many of the employees were proposed long ago, and many of the employees receiving raises could not vote in the election.  The only issue here is the timing.  Given the memoranda proposing raises, the Election Officer credits the statements of

Mr. Selsavage that Mr. Sever believed this was his last opportunity to implement raises while he was still in office.  While the use of union treasury monies to do so may not be the wisest choice of resources, the Election Officer finds that the action did not violate the Rules.

Accordingly, the protest is DENIED.

James P. Hoffa

November 30, 1998

Page 1

Any interested party not satisfied with this determination may request a hearing before the Election Appeals Master within one (1) 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 & 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, 444 North Capitol Street, NW, Suite 445, Washington DC 20001, Facsimile (202) 624-3525.  A copy of the protest must accompany the request for a hearing.

Sincerely,

Michael G. Cherkasky

Election Officer

cc:              Kenneth Conboy, Election Appeals Master