Building Material and Dump Truck Drivers, Local 420 v. Traweek
| Decision Date | 25 January 1989 |
| Docket Number | Nos. 87-5744,87-5749 and 87-5806,s. 87-5744 |
| Citation | 867 F.2d 500 |
| Parties | 130 L.R.R.M. (BNA) 2441, 110 Lab.Cas. P 10,924 BUILDING MATERIAL AND DUMP TRUCK DRIVERS, LOCAL 420; and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Plaintiffs- Appellants, v. Oliver TRAWEEK and Gene McFadden, Defendants-Appellees, v. Gene TRUE; Edgar Smith; Richard Martino; Pete Gallegos; Leo Pittman; Arthur Webb; and Clyde Craig, Third-party-defendants-Appellants. BUILDING MATERIAL AND DUMP TRUCK DRIVERS, LOCAL 420, Plaintiff-Appellee, and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Plaintiff, v. Richard MARTINO; Edgar Smith; and Gene True, Defendants, and Oliver Traweek and Gene McFadden, Defendants-counterclaim-third-party- Plaintiffs-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
George Pappy, Pappy and Davis, Los Angeles, Cal., for Local 420, and individual third-party plaintiffs-appellants-cross-appellees.
Richard C. Leonard, and D. Steven Cameron, Levine, Schreiber and Leonard, Beverly
Hills, Cal., for defendants-cross-appellants.
Robert D. Vogel, Wohlner, Kaplon, Phillips, Vogel, Shelley & Young, Los Angeles, Cal., for Joint Council third-party defendant-appellant-cross-appellee.
Appeal from the United States District Court for the Central District of California.
Before NELSON, REINHARDT and O'SCANNLAIN, Circuit Judges.
These consolidated appeals involve a series of disputes between former union officers of Local 420, Oliver Traweek and Gene McFadden, ("appellees") and the individual current union officers of Local 420 ("the individual third-party defendants"); Local 420; the union's Joint Council; the International Union; and the United States Department of Labor. Traweek was the secretary-treasurer and chief executive officer of Local 420; McFadden was Local 420's vice president during all times relevant to the litigation. They were part of the seven member executive governing board of Local 420 (the "Local Board"). We affirm in part and reverse in part.
The first dispute involves an interpretation of the Local's by-laws and of the provisions of the International Union's Constitution regarding the necessary union approval for payment of a member's personal legal fees. Traweek went both to the Local Board and the membership to persuade them to pay for the legal defense of any union member charged with a crime. Traweek did this because Louie Andrini, Local 420's business agent, had been indicted for setting afire the Cove Development Co., a customer of a manufacturer against whom Local 420 was on strike. Additionally, unknown to the Local Board or the union membership, Traweek advanced $10,000 of his own money for Andrini's legal fees, to be refunded if the union paid the legal fees. The district court concluded that Traweek feared that he would be implicated in the arson if the union did not pay Andrini's personal legal fees. On February 17, 1981, Traweek went to the Local Board with his fees proposal. Instead of approving the motion, the board requested a legal opinion as to the legality of such a payment. Three days later Traweek went to the membership and submitted the same resolution for payment of legal expenses of union members. The membership ratified the proposal, subject to a legal opinion approving of the action.
On February 27, 1981, Traweek received the legal opinion, but did not reveal it either to the Local Board or to the membership. The parties dispute whether the legal opinion received actually interpreted union governing documents to authorize disbursement of union funds for Andrini's legal fees. The next week, appellees, as two of the persons authorized to sign for disbursement of union funds, paid Andrini's defense counsel $25,000 from union funds and Traweek received reimbursement of his personal monies. On March 10, March 18, and March 24, appellees paid Andrini's various defense attorneys out of union funds with three checks totaling an additional $30,000.
On March 12, 1981, the five members of the Local Board filed charges with the Joint Council 1 regarding the first check written by appellees. The other board members charged that appellees had expended union funds contrary to the union's by-laws and the International Constitution. The five members later amended the charges to include the second and third checks, but did not include the fourth check drawn on the union's accounts.
The Joint Council impaneled hearing officers and held a hearing on April 21, 1981 regarding the charges against Traweek and McFadden. Although appellees did not challenge the neutrality of the hearing members before the hearing, they now On May 30, the Joint Council decided to require appellees to repay the $40,000 drawn from the Local's accounts and suspended them from the union for one month or until repayment, whichever occurred last. The next day the Local Board immediately appointed replacements for Traweek and McFadden. Pappy was rehired as Local 420's counsel. Traweek appealed to the International Union's president for a stay of the decision. The International rejected Traweek's petition.
challenge the fairness of the hearing. The Joint Council's attorney, George Pappy, was also counsel for Local 420 until fired by Traweek. At the time of the hearing, Pappy was retained by several other member locals. Pappy did not usually attend any Joint Council hearing panel deliberations, but Pappy was present at the April 21 hearing. Traweek contends that Pappy was biased against him because Traweek selected another firm to represent Local 420, and that Pappy impermissibly maintained an undisclosed financial interest in the hearing because he knew that if Traweek were removed as a Local 420 officer, the Pappy law firm would again be retained by the Local.
During this time, actions forming the second controversy took place. On March 1, after the membership vote but before union funds were disbursed, the five remaining officers of the Local Board held a special, secret meeting of the board. Neither Traweek nor McFadden were notified about the meeting. At this meeting the five members, constituting a majority of the board, decided not to contest the latest Labor Department challenge to the propriety of Local 420's November 1980 elections. This election challenge required rerun elections to be held for only three Local Board offices, including those held by Traweek and McFadden. The five members of the Local Board also passed a resolution prohibiting the expenditure of union funds for an individual member's legal fees without the approval of a majority of the board. Appellees did not know of these actions at least until after the first check was written.
On March 5, twenty union members filed charges against the five Local Board members regarding the secret meeting. Because the charges involved a majority of the members of the local's executive board, the Joint Council assumed original jurisdiction over the case. On April 28, one week after the hearing against Traweek and McFadden, a separate Joint Council hearing panel heard the improper secret meeting charges. The Joint Council never issued a decision concerning the alleged violations committed by the individual local board members.
The third action also involves appellees' unauthorized disbursement of union funds but this action concerns charges brought regarding the fourth and final check drawn on the union's accounts (the $15,000 check). Instead of filing these charges with the Joint Council, as was done in the first action against appellees, other union members filed these charges with the Local Board on May 17, 1981. After the Joint Council's decision was rendered against Traweek, the Local Board notified Traweek that a Local Board disciplinary hearing would be held regarding the issuance of the fourth check. The Local Board gave Traweek only three days notice of the Local Board charges and hearing date, in violation of Article XIX, section 1(c) of the International Constitution, which requires ten days notice of a hearing and prohibits charging parties from presiding over the disciplinary hearings.
On June 12, the Local Board held a hearing concerning the fourth check, and a decision issued on June 17. The Board required Traweek to repay the last $15,000 withdrawn from the union account, fined him $5,000 as a penalty, and expelled him from the union for five years. The Local Board did not issue a decision regarding McFadden's punishment for signing the fourth check. In the meantime, the Labor Department set a date for the rerun elections for the three challenged Local 420 positions. On August 8, the Labor Department Local 420 then filed suit against Traweek and McFadden pursuant to 29 U.S.C. Secs. 185 & 501(b) and California common law fraud statutes. Traweek filed a counterclaim against Local 420 claiming violations of 29 U.S.C. Sec. 411 and filed a third-party complaint against the Joint Council, the International, the Department of Labor 3 and individual third party defendants who were members of the newly constituted local board. Traweek contends that the third-party defendants violated his rights under the Landrum-Griffin Act, as codified at 29 U.S.C. Sec. 411, and that these parties entered into a conspiracy against appellees to oust them from the Local Board and to prevent them from running in the upcoming union rerun elections. Traweek and McFadden also claim back wages and penalties for violations of Cal.Labor Code Secs. 201 & 203.
informed Traweek that he was ineligible to run in the rerun election because he was not a union member in good standing. Traweek immediately complained to the International about the Local Board's action, but the International stayed the appeal. 2
The district court found for the appellants on the ...
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