INTERN. BROTH. OF BOILER MAKERS v. International Brotherhood of Boilermakers

Decision Date08 July 1987
Docket NumberNo. 87 C 1708.,87 C 1708.
Citation663 F. Supp. 1071
PartiesINTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO, LOCAL LODGE 714; Michael Bellmore, President; Ronald Gilmore, Vice President; Susan Garvin, Secretary-Treasurer; Sandra Aker, Recording Secretary; Brunetta Wiegand, Chairman of Trustees; Karen Steege, Trustee; Frances Logan, Trustee; and Paul Schultz, Inspector, Defendants.
CourtU.S. District Court — Northern District of Illinois

Bernard M. Mamet, Bernard M. Mamet & Associates, Ltd., Chicago, Ill., for plaintiff.

Richard J. Tupper, Cornfield and Feldman, Chicago, Ill., for defendants.

MEMORANDUM ORDER

BUA, District Judge.

This order concerns the motion of plaintiff International Brotherhood of Boiler makers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO ("International"), for a preliminary injunction to enforce a trusteeship and the motion of defendant Local Lodge 714 of International ("Local 714") for a preliminary injunction to dissolve trusteeship. Originally, this matter was referred to Magistrate Elaine E. Bucklo to conduct a hearing and prepare recommended findings of fact and conclusions of law. On May 15, 1987, Magistrate Bucklo submitted her report to this court recommending that International's motion for preliminary relief be granted and that Local 714's motion be denied. Pursuant to Fed.R.Civ.P. 72(a), this court reviewed the magistrate's proposed findings and conclusions de novo and now enters the following order adopting the recommendation of Magistrate Bucklo with the following clarifications.

I. FINDINGS OF FACT

This court adopts the magistrate's findings of fact with certain exceptions as set forth below.

International is a labor organization with approximately 120,000 members. The members are members of local lodges such as Local 714. Local 714, at least until November 13, 1986, was composed of from 135-141 (the answer states the number as 141 although testimony at the hearing indicated fewer members) persons who were production and maintenance employees of Quaker Industries, Inc. in Antioch, Illinois.1

In August 1986, International held an election for president and other officers of the organization. Various persons were unhappy with the results of that election (and apparently other votes taken at the International convention) and decided to try to form a competitive labor organization. Beginning in the fall of 1986, various locals attempted to disaffiliate from International. International responded with the imposition of trusteeships upon at least some of those locals that attempted to disaffiliate.

International's constitution, Article XVIII, provides that the Executive Council of the International may place any local under trusteeship "if it is satisfied after notice and hearing that a trusteeship is warranted and the interests of the International Brotherhood so require." Grounds for a trusteeship are stated to be:

secession or threatened secession, dissolution or threatened dissolution, dissipation or loss of funds or assets or financial malpractice or corruption or threat thereof; violation or threatened violation of collective bargaining agreements; the deprivation of democratic procedures and other activities constituting a violation of this Constitution and threatening the welfare of the subordinate body membership or the International Brotherhood.

Section XVIII of International's constitution also provides that a trustee duly appointed by International's president after notice and hearing, has the right, upon demand, to the "funds, properties, books and assets" of the local. The trustee must be bonded and must use any local funds "only to the extent necessary for the proper conduct of the subordinate body." In addition, expenses of the trusteeship are to be paid from the funds of the trusteed local. The trusteeship "shall be continued no longer than is necessary to coordinate and reorganize the affairs of the subordinate body."

Article XXXV of International's constitution states that the funds of local lodges "are trust funds for the benefits of its members" which, upon surrender or revocation of the local's charter, are to be forfeited to International. Various Local 714 members testified that they would never have voted to affiliate with International in 1972 if they had known of the provision in International's constitution permitting forfeiture of funds on dissolution. The provision apparently has been part of the constitution at least since that time. Local 714 has also approved bylaws at various times that state that Local 714 agrees to abide by and incorporates the International's constitution as its bylaws.

Local 714 was chartered as a subordinate lodge by International in 1972. In late October 1986, Michael Bellmore, the President of Local 714, met with Thomas Cooper, one of the organizers of the newly formed competitive international (the Independent Workers of North America) and until August 1986, an International Vice President for the Great Lakes Area of International. As a result of this meeting, Bellmore called an executive board meeting of Local 714 on November 10, 1986. The board voted to distribute a petition to disaffiliate from International. A separate dues revocation sheet was also distributed. A vote was scheduled for November 13, 1986.

On November 11, 1986, pursuant to a vote of the Board (apparently ratified by the membership on November 13) Local 714 transferred its bank account to a new account under the name Independent Workers of North America. This money has been kept separate from other money collected by the new union. Some of it, however, has been used to pay expenses of Local 15.

The petition to disaffiliate from International was distributed by Local 714's shop stewards. 130 of the 135-141 members of Local 714 signed the petition. At the election held on November 13, 1986, the vote to disaffiliate was 102 to 2.2 International was not told of the meeting. Bellmore testified that he was afraid International would have taken steps to prevent the meeting if it had learned of it. He also testified that the trustee appointed by International and other International agents have attempted to disrupt meetings of the new union since this time.

Pursuant to the November 13, 1986 vote, officers and most of the members of Local 714 formed what they now call Local 15 of the new international, Independent Workers of North America. Local 15 has the same officers as Local 714. Bellmore did not know if Local 15 had new books and records or simply continued those of Local 714.

On November 14, 1986, Local 15 petitioned the NLRB for an election of bargaining representative on the ground that a "schism" existed at the local level (thus attempting to avoid the contract bar doctrine). Local 15 filed a second petition for an election with the NLRB on January 5, 1987, when because of the imminent expiration of the existing collective bargaining agreement with Quaker Industries on March 27, 1987, the contract bar doctrine would not prevent a new election. That election has not yet been held.

International learned of Local 714's disaffiliation vote and on December 3, 1986, International wrote a letter, the receipt of which is acknowledged by the individual defendants, entitled "Official Hearing Notice." The notice was of a hearing to consider the imposition of a trusteeship. On December 5, 1986, International also sent a letter to the individual defendants directing them to attend the hearing and to bring with them Local 714's books and records.

The trusteeship hearing was held on December 19, 1986. None of the individual defendants attended the hearing. On January 30, 1987, International voted to impose a trusteeship. Various grounds are stated in International's decision, including the fact that Local 714's officers or members had promoted disaffiliation, that the actions of Local 714's officers violated their duties to International, and that since Local 714 had not produced its records it was "reasonable to infer that possible financial malpractice" has occurred.

International states that it does not really care if the members of Local 714 want to disaffiliate. It does, however, seek the books and records of Local 714, as well as the funds (about $8,000) that were in Local/714's bank account prior to November 11, 1986.

In its counterclaim, Local 714 asked for preliminary and permanent injunctive relief to restore to Local 15 of the Independent Workers of North America dues paid by members since November 13, 1986, which Quaker Industries has paid to International, as well as an injunction against the imposition of the trusteeship. At the hearing, Local 714 agreed that these funds were not properly the subject of a preliminary injunction.

The certified bargaining representative to Quaker Industries is listed in International's complaint and other documents as Local 714. The collective bargaining agreement states that it is between Quaker Industries and International as well as Local 714. That agreement has now expired, however, and International did not attempt to impose the trusteeship on the basis of interference with a collective bargaining agreement.

II. DISCUSSION
A. Burden of Proof

On the cross motions for preliminary injunctions before this court, the burden of proof for each party differs substantially. The Seventh Circuit specifically notes in Roland v. Air Line Employers Ass'n, the distinction between a party seeking to preserve the status quo through a preliminary injunction (i.e., enforcing a trusteeship) and a party seeking to destroy the status quo (i.e., dissolving a trusteeship). 753 F.2d 1385, 1392 (7th Cir.1985). Cautioning that "injunctive relief to dissolve an existing trusteeship is a most unique remedy," the court sets forth the traditional...

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