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Office of Labor-Management Standards (OLMS)

OLMS Interpretative Manual

TABLE OF CONTENTS

TRUSTEESHIP

300            Trusteeship In General
301-304     (Numbers Reserved)

305            Determining Existence of Trusteeship
306            Merger as Trusteeship
307            Revocation and Reissuance of Charter as Trusteeship
308            Restraint on Disaffiliation as Trusteeship
309            Absence of Autonomy Otherwise Available

310            Purposes of Trusteeship In General
311            Correcting Corruption
312            Financial Malpractice
313            Assuring Performance of Collective Bargaining Agreement
314            Restoring Democratic Procedures
315            Other Legitimate Objects
316-319     (Numbers Reserved)

320            Activities of a Trusteed Union
321            The Trustee
322            Participation in Elections of Superior Bodies
323            Elections Within the Trusteed Local
324            Management of Funds
325            Distribution of Assets
326            Reporting Obligation
327            Remedy of Abuses During Trusteeship
328-349     (Numbers Reserved)

350            Termination of Trusteeship In General
351            Voluntary Termination
352            Suit by Member to Terminate Trusteeship
353            Complaint by Member to Secretary
354            Action by Secretary of Labor
355            Presumption of Validity
356            Presumption of Invalidity
357            Suit to Correct Abuses During Trusteeship Now Terminated
358-399     (Numbers Reserved)

TRUSTEESHIP IN GENERAL

300.001 LMRDA, SECTION 3(h)

            “TRUSTEESHIP” means any receivership, trusteeship, or other method of supervision or control whereby a labor organization suspends the autonomy otherwise available to a subordinate body under its constitution or bylaws.
See 29 CFR 400.1(b).

300.003 HISTORICAL NOTE

            The practice of imposing trusteeships by unions dates back to the 19th century, but was extremely rare until the development of strong national unions.

            During hearings of the McClellan Committee it was disclosed that the power to impose trusteeship was used sometimes for the purpose of “milking” local treasuries or undemocratically controlling votes to perpetuate power.  In the second and third years of the McClellan Committee hearings, legislation was proposed containing provisions to correct abuses through enforcement measures.
           
            Provisions covering trusteeships were enacted as Title III of the Labor-Management Reporting and Disclosure Act of 1959 (Public Law 86-257) on September 14, 1959.  This title prescribes conditions under which trusteeships may be established and continued.  It requires reporting and public disclosure of their stewardship by any labor organization, makes it a crime either to count the votes of delegates of the trusteed union unless democratically elected, or to transfer funds to the supervisory body, and provides redress for the union member or subordinate body either directly in court or through the Secretary of Labor.

            The discussions and committee deliberations in Congress recognized that union trusteeships, although sometimes used to control subordinated organizations illegally, most often are used to provide assistance to subordinates in difficulties, to assist in maintenance and stability, and to promote rather than stifle union democracy.
           
            The Department’s administration of Title III has been guided by an awareness of these Congressionally noted facts.  Therefore, the Department emphasizes voluntary compliance and provides technical assistance to unions in their efforts to comply with the law.  However, trusteeship violations have been investigated thoroughly to insure that the law is being complied with.

Union Trusteeships: a Report to Congress, page 5.

See also Union Trusteeships: A Report to Congress, published by the Department of Labor, pursuant to LMRDA, Section 305.

            (The Secretary shall submit to Congress at the expiration of three years from the date of enactment of this Act a report upon the operation of this title.)

DETERMING EXISTENCE OF TRUSTEESHIP

305.005 SUSPENSION OF CHARTER

            Where the charter of a local labor organization is suspended by the parent organization according to the constitution of the parent organization and where the funds, records, and other property of the local are impounded by a court as a result of a dispute between the parent and the local over the suspension, those facts are sufficient to constitute a trusteeship so as to require a trusteeship report by the parent organization.

305.100 SUSPENSION OF AUTONOMY MAY BE COMPLETE OR PARTIAL

            A suspension of autonomy imposed on a subordinate labor organization by a superior organization is a trusteeship.  The suspension of autonomy may be either complete or partial.  Thus, a local is under trusteeship if one of its functions (e.g., control of financial affairs) is suspended, notwithstanding its retention of autonomy in other functions. 
           
            See also Manual Entry 235.005.

305.105 SUPERVISION OF LOCAL

            Four members of a local union filed a complaint with the Secretary of Labor under the provisions of Title IV of LMRDA charging that an officer of the international union refused to permit them to be seated as officers of their local after they had been duly elected because they would not sign a pledge of loyalty to the union.  On investigation it was found that the international president had placed this local under his “direction, control and supervision” because of a movement within the ranks of the local to secede from the parent international and form an independent union. This condition was in effect at the time of the election and the refusal to seat.

            Such supervision and control, including the international officer’s demand that the complainants sign a loyalty pledge and his refusal to seat them when they would not, was determined by the Department to have constituted a suspension of the autonomy otherwise available to this local under its constitution and bylaws.

            This suspension of autonomy was found to have constituted a trusteeship within the meaning of Title III of LMRDA.

305.200 RECEIVERSHIP NOT TRUSTEESHIP

            The appointment of a receiver by a State Court is not a “trusteeship” within the meaning of LMRDA because the local’s autonomy is suspended by operation of State law and not by a labor organization.

Mills v. Collier, 56 LRRM 2894 (S.D. Ind. 1964).

      (Technical Revisions: Dec. 2016)

305.300 MINORITY FACTION

            The trusteeship provisions of the Act relate only to assumption of control by one labor organization over its separately organized subordinate labor organizations.  In the absence of intervention by a superior labor organization, Title III does not affect in any way the principle of majority rule within a subordinate local union and therefore a minority faction within a single labor organization could not be considered as being under trusteeship because of domination and control exercised by the majority.

305.400 FOREIGN LOCALS

            The provisions of the Act with respect to imposition of trusteeships are applicable to United State national or international labor organizations subject to this Act even though the action of the United States organization is taken with respect to a foreign local.

29 CFR 451.6(c).

*305.500 “SUBORDINATE BODY” MEANS SUBORDINATE LABOR ORGANIZATION

            While the definition of a trusteeship in section 3(h) of the LMRDA refers to a labor organization’s suspension of the autonomy otherwise available to a “subordinate body” under its constitution and bylaws, multiple courts of appeal have interpreted “subordinate body” to be synonymous with “subordinate labor organization” in this instance.  Therefore, a trusteeship is not covered by the Act unless it is imposed over a body that meets the definition of a labor organization in section 3(i) of the Act. 

See, e.g., New Jersey County and Municipal Council No. 61 v. American Federation of State, County & Municipal Employees, 478 F.2d 1156, 1160 (3d Cir. 1973); Colorado Labor Council v. American Federation of Labor & Congress of Industrial Organizations, 481 F.2d 396, 399 (10th Cir. 1973).

            (Revised: Dec. 2016)

MERGER AS TRUSTEESHIP

306.005 IN GENERAL

            A merger of two locals to form a new local or the consolidation of one local into another local, when properly conducted, does not in and of itself create a trusteeship.

306.100 ELIMINATION OF OFFICERS

            A merger in which the officers’ positions ceased to exist would not necessarily amount to a trusteeship, although a parent organization cannot arbitrarily replace the officers of a subordinate union without creating a trusteeship.

306.200 COURT’S JURISDICTION IN MERGER

            A United States District Court in New York held that it could not take jurisdiction over a case in which a local union sought to enjoin its international from forcing a merger on it in order to derive the local of its autonomy. The local argued that, in effect, this action constituted the imposition of a trusteeship for a purpose not allowable under section 302. The court rejected this argument, and concluded that nothing in the legislative history of LMRDA indicates an intent to affect mergers.

Brewery Bottlers and Drivers Union Local 1345, Brooklyn, New York, of International Brotherhood of Teamsters v. International Brotherhood of Teamsters, 202 F.Supp. 464, 468, 49 LRRM 2712 (E.D.N.Y. 1962).
See also   Local No. 48 v. United Broth. of Carpenters and Joiners, 920 F.2d 1047, 1056-57, 136 LRRM 2001, 2008-09 (1st Cir.1990); Massey v. Curry, 46 LRRM 2140 (Sup. Ct. Ga. 1960).

      (Technical Revisions: Dec. 2016)

REVOCATION AND REISSUANCE OF CHARTER AS TRUSTEESHIP

307.005 REVOCATION OF CHARTER

            The revocation of a local’s charter terminates its affiliation with the international, and it can no longer be regarded as a “subordinate body” of the international thereafter for trusteeship purposes.  Nothing in the Act prevents the creation of a new local even though it may be composed primarily of the same individuals formerly belonging to the local which has had its charter revoked.

Local Union No. 14 of United Association of Journeymen and Apprentices of Plumbing and Pipefitting Industry v. United Association of Journeymen and Apprentices of Plumbing and Pipefitting Industry, 160 A.2d 664, 671-72 (1960); page 130 of the Trusteeship Report; and Parks v. International Brotherhood of Electrical Workers, 314 F.2d 886, 923-24 (4th Cir. 1963), cert. denied, 372 U.S. 976 (1963).

            However, courts have also held that provisions of a parent union’s Constitution giving its President the authority to suspend or revoke a local’s charter and “create a provisional government” for that local also serve as implied authority for the parent union to impose trusteeships. See, e.g., McVicker v. International Union of District 50, 327 F.Supp. 296 (N.D. Ohio 1971); Local No. 2, International Brotherhood of Telephone Workers v. International Brotherhood of Telephone Workers, 261 F.Supp. 433 (D. Mass.1966).

      (Revised: Dec. 2016)

RESTRAINT ON DISAFFILIATION AS TRUSTEESHIP

308.005 VALID DISAFFILIATION

      See Manual Entry 315.100.

ABSENCE OF AUTONOMY OTHERWISE AVAILABLE

309.005 SENIORITY DISPUTES

            There is no suspension of “autonomy otherwise available” when a president of a union acts under a resolution of the union’s convention empowering him to act in a seniority dispute between two merged locals if the resolution permanently removes the autonomy of all locals to decide seniority disputes. Therefore, there is no trusteeship.

PURPOSES OF TRUSTEESHIP IN GENERAL

310.001 LMRDA, SECTION 302

            Trusteeships shall be established and administered by a labor organization over a subordinate body only in accordance with the constitution and bylaws of the organization which has assumed trusteeship over the subordinate body and for the purpose of correcting corruption or financial malpractice, assuring the performance of collective bargaining agreements or other duties of a bargaining representative, restoring democratic procedures, or otherwise carrying out the legitimate objects of such labor organization.

310.005 PURPOSES STATED IN TRUSTEESHIP REPORTS

      The LMRDA states four allowable purposes for establishing trusteeships:

  1. “Correcting corruption or financial malpractice.”  This reason has been used by parent unions to justify correction of situations ranging from minor speculations to gross mishandling of funds constituting violations of the LMRDA.
  2. “Assuring the performance of collective - bargaining agreements or other duties of a bargaining representative.”  This was a frequently used and obviously important reason for establishing trusteeships.
  3. “Restoring democratic procedures.”  This reason has frequently been used for trusteeships established to correct violations of the Act.
  4. “Otherwise carrying out the legitimate objects of such labor organization.”  Included under this purpose are: caretaker trusteeships (accounting for about one-third of union trusteeships), which were used when a subordinate union was relatively inactive because of the closing of a plant, a small or itinerant membership, sudden loss of leadership (e.g., by death or illness), or because it was a new local not yet able to stand on its own feet; mismanagement, which embraces other than financial malpractice; enforcing a subordinate’s lawful obligations to the parent when a subordinate is improperly refusing to fulfill those obligations; and disaffiliation, a self-explanatory reason for establishing trusteeships.  Whether the asserted “purposes” for establishing a trusteeship are valid is resolved on a case-by-case basis, depending on the particular facts.

      (Revised: Dec. 2016)

*310.007 ONE STATUTORY PURPOSE MAY ESTABLISH VALIDITY

            If in fact a trusteeship is established and administered for at least one of the purposes enumerated in section 302 of the Act, the validity of the trusteeship will not be affected merely because it may have been designed to accomplish other purposes not specified in the statute.  These other purposes, however, must not include any of the prohibited activities specified in section 303.

310.100 TRUSTEESHIP TO FRUSTRATE INVESTIGATION

            How the imposition of a trusteeship is to be viewed depends upon the purpose sought to be served in its creation.  The Department will not allow the imposition of a trusteeship to frustrate its investigation of an election in a trusteed labor organization.  It is recognized that use of such control by a parent organization as a device for correcting election abuses may well prove a valuable tool in aid of a policy of voluntary compliance.  In either event the Department is not precluded from proceeding with investigation of a timely received election violation complaint.

310.200 ESTABLISHMENT OR ADMINISTRATION

            The Department’s position, as expressed in the Trusteeship Report, has been that the procedure to be followed in the establishment or administration of a trusteeship does not have to be set forth in the parent labor organization’s constitution and bylaws as a prerequisite for a valid trusteeship.

                        However, some U.S. Circuit Courts have ruled to the contrary.  See Int'l Bhd. of Teamsters v. Local Union Number 810, 19 F.3d 786, 790 (2d Cir.1994); United Brotherhood of Carpenters and Joiners v. Brown, 343 F.2d 872, 881, 59 LRRM 2141 (10th Cir. 1965); Flight Engineers’ International Association, CAL. Chapter v. Continental Air Lines, Inc., 297 F.2d 397, 49 LRRM 2951.(9th Cir. 1961), cert. denied, 369 U.S. 871 (1962).

      (Technical Revisions: Dec. 2016)

310.300 FAILURE TO HOLD A HEARING

            Section 302 provides two conditions for the establishment of a valid trusteeship: (1) The trusteeship must be established and administered in accordance with the constitution and bylaws of the labor organization which is imposing the trusteeship; and (2) the trusteeship must be established for one of the purposes stated in section 302.

            On its face, section 302 does not make a “fair hearing” mandatory to establish a valid trusteeship.  However, if the constitution and bylaws of the labor organization imposing the trusteeship provide for a hearing, then the trusteeship would not be a valid one unless a hearing is held because the trusteeship would not have been established in accordance with the parent labor organization’s constitution and bylaws.

                On the other hand, where the constitution and bylaws of the labor organization do not provide for a hearing, the effect of the failure of the labor organization imposing the trusteeship to hold a hearing does not affect the validity of the trusteeship, but it deprives the labor organization of the 18-month presumption of validity otherwise available under section 304(c). 

But see Becker v. Industrial Union of Marine & Shipbuilding Workers, 900 F.2d 761, 768  (4th Cir. 1990); Jolly v. Gorman, 428 F.2d 960, 966 (5th Cir. 1970), cert. denied, 400 U.S. 1023 (1971); Tam v. Rutledge, 475 F. Supp. 559, 562 n.4 (D. Haw. 1979); Luggage Workers Local 167 v. International Leather Goods Workers Union, 316 F. Supp. 500, 505,(D. Del. 1970) (the contention “that a fair hearing is required to establish a valid trusteeship, does not appear more readily from the Act…. The weight of judicial authority favors the requirement, however, and finds it implied from the legislative history and purpose.”); Plentty v. Laborers, 302 F. Supp. 332, 338, 72 LRRM 2305 (E.D. Pa. 1969) (Congress recognized and wished to preserve the common law rule requiring a “fair hearing”).

      (Revised: Dec. 2016)

310.305 TIME OF HEARING

            When a hearing is held in connection with the imposition of a trusteeship or in order to establish a presumption of its validity, such a hearing may be held before the imposition of the trusteeship or within a reasonable time thereafter.  This conclusion is based on the language of section 304(c) that “a trusteeship established by a labor organization in conformity with the procedural requirements of its constitution and bylaws and authorized or ratified after a fair hearing. . . ”

 

311 - -                            CORRECTING CORRUPTION

312 - -                            FINANCIAL MALPRACTICE

*312.005 ENDANGERING FISCAL INTEGRITY

            The kind of financial malpractice which may justify imposition of a trusteeship is not specifically defined in the Act.  The conduct which might lead to supervision by a parent body could be as serious as embezzlement of funds by local officers.  However, it would not appear to be improper for a labor organization to impose a trusteeship when action which is not necessarily criminal, like irresponsible leadership, jeopardizes the fiscal integrity of the organization.

313 --          ASSURING PERFORMANCE OF COLLECTIVE
                                      BARGAINING AGREEMENT

313.005 WILDCAT STRIKES

            A trusteeship imposed on a local union by an international union where the members of the local engaged in a number of wildcat strikes and the officers of the local were irresponsible and incapable of controlling the members was held to be a valid trusteeship within the meaning of section 302.

*313.007 FAILURE TO ENFORCE AGREEMENT

            An International union imposed a trusteeship over a local union when its investigation revealed that the local could not police its collective bargaining agreements, offer adequate membership representation in the field, nor properly administer its dispatch procedure.

                                                                                    In a private suit under section 304 challenging the validity of the trusteeship, a Federal District Court found that under the above circumstances the International president was justified in imposing a trusteeship to assure the performance of the union’s collective bargaining agreements.  Foose v. Hoffa, 63 LRRM 2436 (C.D. Cal. 1966).

     (Technical Revisions: Dec. 2016)

RESTORING DEMOCRATIC PROCEDURES

*314.005 INABILITY TO CONDUCT ORDERLY MEETINGS

            An international imposed a trusteeship over one of its locals because the local was “in turmoil,” and local offices were unable to conduct orderly meetings.  In upholding the validity of this trusteeship in a proceeding brought under section 304, a Federal District Court said:

“Certainly, there was sufficient justification for imposing a Trusteeship for the purpose of restoring democratic procedures…there was no doubt but what the local officers,…were not able to conduct proper parliamentary meetings.” 

Foose v. Hoffa, 63 LRRM 2436 (C.D. Cal. 1966).

      (Technical Revisions: Dec. 2016)

OTHER LEGITIMATE OBJECTS

315.005 PREVENTING IMPROPER BYLAWS CHANGES

            Where the international president, acting within the authority granted to him in the international constitution, interprets the actions of a local union as being in conflict with the international constitution, he may validly impose a trusteeship over the local if empowered by the international constitution to do so for that purpose.
     
            Consequently, if a local union were to adopt new bylaws that the international president interpreted as being contrary to the provisions of the international constitution, it would seem that he may validly impose a trusteeship over the local union.

      (Revised: Dec. 2016)

315.007 ENFORCEMENT OF CONSTITUTION AND BYLAWS

            In appropriate circumstances, the Department may consider the uniform enforcement of lawful provisions of a subordinate labor organization’s constitution and bylaws a legitimate object of a parent labor organization and, if so, will not challenge a trusteeship established for this purpose, provided that the trusteeship was imposed in accordance with the constitution and bylaws of the organizations involved.

315.100 PREVENTING SECESSION OF AFFILIATE
     
            If preventing  an affiliated subordinate labor organization is a purpose of a parent labor organization in imposing the trusteeship, that does not necessarily mean the trusteeship is unlawful.  One condition that must be met for a parent union to lawfully impose a trusteeship to prevent disaffiliation is that disaffiliation must be prohibited by the parent union’s governing document(s) and its prevention authorized by such document(s) as a basis for a trusteeship.  See, e.g., Boilermakers v. Local Lodge 714, 845 F.2d 687, 691, 128 LRRM 2259, 2260 (7th Cir. 1988); Local 450 v. International Union of Elec., Elec., Salaried Mach. & Furniture Workers, 30 F. Supp. 2d 574 , 578, 579–80, 159 LRRM 2989,  2994 and 2996 (E.D.N.Y. 1998) .  In addition, preventing disaffiliation is not permissible as a sole purpose for a trusteeship, and must be combined with at least one other valid purpose for the trusteeship to be lawful.  See, e.g., International Brotherhood of Boilermakers v. Local Lodge D474, 673 F.Supp. 199, 203-04, 129 LRRM 2309, 2313 (W.D.Tex.1987)  C.A.P.E. Local Union 1983 v. International Bhd. of Painters & Allied Trades, 598 F. Supp. 1056, 1069-70 (D.N.J.1984).

      (Revised: Dec. 2016)

315.200 RACIAL DISCRIMINATION

            A trusteeship imposed by an international union on a local union because the local union was continuing a course of discriminatory and unequal treatment of members on the grounds of race was established for the purpose of “carrying out the legitimate objects of such organization: within the meaning of section 302 of the Act.

IMPROPER OBJECTS

315.500 INDEBTEDNESS TO INTERNATIONAL

            A local union’s indebtedness to an international union may be a valid reason for the international to impose and continue a trusteeship over the local within the meaning of section 302 of LMRDA.  However, when the international deliberately increases the debt of the local rather than taking steps to decrease it, the continuance of the trusteeship would not be considered to be for a proper purpose.

ACTIVITIES OF A TRUSTEED UNION

320.001 UNLAWFUL ACTS RELATING TO LABOR ORGANIZATION UNDER
  TRUSTEESHIP

LMRDA, SECTION 303

  1. During any period when a subordinate body of a labor organization is in trusteeship, it shall be unlawful (1) to count the vote of delegates from such body in any convention or election of officers of the labor organization unless the delegates have been chosen by secret ballot in an election in which all the members in good standing of such subordinate body were eligible to participate, or (2) to transfer to such organization any current receipts or other funds of the subordinate body except the normal per capita tax and assessments payable by subordinate bodies not in trusteeship:  Provided, That nothing herein contained shall prevent the distribution of the assets of a labor organization in accordance with its constitution and bylaws upon the bona fide dissolution thereof.
  2. Any person who willfully violates this section shall be fined not more than $10,000 or imprisoned for not more than one year, or both.

 

320.005 PURPOSES OF SECTION

            Section 303 of the Act appears to have been designed to prevent two of the most flagrant types of abuses that the McClellan Committee found arising out of trusteeships.  These were the concentration of power in individuals or groups through the manipulation of delegates from unions under trusteeship and the “milking” of the treasuries of these unions.

320.200 RATIFICATION OF CONTRACT

            Members of a local in trusteeship were held to have no standing under LMRDA to challenge the administrator for not allowing them the right, granted under their local constitution, to vote on the ratification of a contract negotiated by the trustee since the trusteeship suspended the autonomy of a local union.

THE TRUSTEE

321.005 APPOINTING ASSISTANTS

            If a trusteeship has been established and is being administered in conformity with the requirements of Title III and with the constitution of the labor organization which has assumed trusteeship, nothing in Title IV would prevent the trustee from appointing individuals to assist him in carrying out the purpose for which the trusteeship was established.

*321.100 AUTHORITY IN GENERAL

            With the exception of the activities specifically prohibited in section 303, the Act does not define in detail the degree or type of control that may be employed by a parent labor organization administering a trusteeship.  If the governing rules of the international union permit, the International through its trustee, may suspend the constitution and bylaws of the local, appoint officers, a business agent or the trustees of a joint trust fund.  The trustee may also vacate offices where circumstances warrant, appoint the chairman of meetings, or postpone or suspend regular membership meetings if such action would further the legitimate purposes for which the trusteeship was imposed.

See, e.g., Blassie v. Poole, 58 LRRM 2359 (E.D. Mo. 1965).

      (Technical Revisions: Dec. 2016)

PARTICIPATING IN ELECTIONS OF SUPERIOR BODIES

322.001 LMRDA, SECTION 303(a)

            During any period when a subordinate body of a labor organization is in trusteeship, it shall be unlawful (1) to count the vote of delegates from such body in any convention or election of officers of the labor organization unless the delegates have been chosen by secret ballot in an election in which all the members in good standing of such subordinate body were eligible to participate.

*322.005 MEANING OF “ANY CONVENTION”

            Section 303(a)(1) covers any regular or special convention of a national or international labor organization or intermediate body such as a joint council or conference.  The word “convention” is considered to apply to any organized assembly of delegates from constituent organizational units which meets to act upon basic union policy and in which the delegates represent the interests of the members of their respective units.

322.100 DELEGATES FROM TRUSTEED LOCALS

            Section 303(a)(1) of the Act prohibits counting the votes of delegates or representatives to conventions of a national or international labor organization or intermediate body, appointed by a trustee from an organization under trusteeship, but this does not prevent such delegates or representatives from attending these conventions.  If the organization imposing the trusteeship has not suspended the trusteed organization’s right to elect delegates or representative to conventions, the organization may elect delegates that have full voting powers to any such convention.

322.105 DELEGATES APPOINTED FROM ELECTED GROUP

            Local X elected six delegates to the International Convention.  Subsequently a valid trusteeship was imposed over Local X by the International and a trustee was appointed.  The trustee selected three of the six delegates to attend the convention.  Two of these three delegates would not have been elected if the membership had voted for only three delegates.

            This Office took the position that appointment from a group that has been elected by secret ballot is not the same as election by secret ballot and that if the votes of such delegates were counted at the convention, such counting would be a violation of section 303 of the Act.

322.110 REPRESENTATION AT CONVENTION

            Where a trusteeship is imposed in accordance with the provisions of Title III of LMRDA and results in complete suspension of the autonomy otherwise available to the trusteed local, the Department’s position is that the Act does not require that the trusteed local be represented by delegates at the international convention.

322.200 VOTING ON ISSUES

            The prohibition in section 303(a) against counting the votes of delegates or representatives from a trusteed labor organization who have not been chosen by secret ballot at any convention or election of officers includes a meeting, conference, convention, or other assemblage of a national or international labor organization, or intermediate body, and is applicable to voting on issues as well as voting for officers.

ELECTIONS WITHIN THE TRUSTEED LOCAL

323.005 APPOINTMENT OF OFFICERS

            If the autonomy of a local union is suspended in accordance with Title III and the constitution and bylaws of the parent organization, it would not be a violation of the Act for the trustee to appoint the officers of the local to serve while the local is under trusteeship.  However, an election of delegates by secret ballot of the local’s members in good standing is required by section 303, if the delegates’ votes are to be counted in a convention or election of officers.

323.200 APPLICABILITY OF OTHER TITLES

            Where a trusteeship is validly imposed for one of the statutory purposes, such as the correction of corruption or financial malpractice on the part of certain officers of a subordinate, compliance with the purposes of section 302 may best be secured by removing the officers in question and temporarily appointing others, despite the provisions of Title IV.

            The Department has taken the general position that a validly imposed trusteeship that results in a complete suspension of autonomy would necessarily cut off the requirements of Title IV of the Act, and make Titles II and V largely inapplicable to the members of the trusteed local.  But a valid trusteeship runs a broad gamut from complete suspension to only limited suspension of certain aspects of a local’s affairs.  In those cases where the parent does not completely suspend autonomy, even though it has the power to do so, the other provisions of the Act would apply to the extent that autonomy is, in fact, retained.  To the extent that the officers retain some of their powers, Title V may apply.  When an election of officers of the subordinate is, in fact, held during the trusteeship, Title IV would apply.

Union Trusteeships: A Report to Congress, page 39.

See also Manual Entry 472.300

MANAGEMENT OF FUNDS

324.001 LMRDA. SECTION 303(a)(2)

      . . .to transfer to such organization any current receipts or other funds of the subordinate body except the normal per capita tax and assessments payable by subordinate bodies not in trusteeship...

324.005 TRANSFER TO “HIGHER BODY”

            The phrase “such organization” as used in 303(a)(2) obviously refers to “labor organization” in the first line of section 303.  Under section 3(i), “labor organization” includes joint councils and conferences, among others, which exist for certain purposes and are subordinate to a national or international labor organization.  Reading the statute in this light, it would appear that a transfer of funds from a trusteed subordinate labor organization to any higher body would be barred, including a transfer of the funds of a trusteed intermediate body to a higher intermediate body.

*324.007 EFFECT OF INVALID TRUSTEESHIP

            If a trusteeship is determined to be invalid, any payment by a trusteed local whose purpose or effect is to maintain the trustee or the trusteeship may well be an illegal transfer of funds.

324.100 LEGAL FEES

            When a court has taken action and has failed to find that a trusteeship was invalid, the payment of legal fees for the defense of the case is a legitimate expense of the local organization and is not a transfer of funds to the international prohibited by section 303(a)(2).

*324.200 EXPENDITURES BY TRUSTEED LOCAL

            Under a valid trusteeship the international may require the local to meet reasonable expenses incurred for the benefit of the trusteeship.  For example, the local may be required to pay the salary and expenses of a trustee, provided that the payment is comparable to that incurred by local officers in conducting the business of the local.

            Criteria for determining the reasonableness of expenditures may be found in the constitution and bylaws of the trusteed organization, and in its past practice when it was not under trusteeship.

324.300 RETURN OF TRANSFERRED MONEY

            The transfer of the funds of a trusteed local to a separate account under the name of the international was held not to be an invalid transfer of funds within the meaning of the Act when substantially greater funds were later retransferred to the local on the grounds that there was no evidence of intent by the international to deprive the local of its funds.

324.400 REPAYMENT OF LOAN

            The deduction of $1,000 per month by the international from a trusteed local’s share of its checkoff dues is not an invalid transfer of funds since the international had loaned the local $10,000 prior to the imposition of the trusteeship and used this method to get repayment.

324.410 LOAN TO INTERNATIONAL

            A loan of $2,500 by a trusteed local to the international and the donation of $100 a week to part of the international’s strike fund were held not to be an invalid transfer of the funds of the trusteed local where both the loan and the donation were noted and approved by the membership at a regular meeting and where other locals, not in trusteeship, made similar loans and donations.

325 - -  DISTRIBUTION OF ASSETS

325.001 LMRDA, SECTION 303(a)(2)

      . . . Provided, That nothing herein contained shall prevent the distribution of the assets of a labor organization in accordance with its constitution and bylaws upon the bona fide dissolution thereof.

326 - -    REPORTING OBLIGATION

See Manual Entries on Trusteeship Reports: 230 ff.

REMEDY OF ABUSES DURING TRUSTEESHIP

See Manual Entry 323.200.

 

TERMINATION OF TRUSTEESHIP IN GENERAL

350.001 LMRDA, SECTION 304

  1. Upon the written complaint of any member or subordinate body of a labor organization alleging that such organization has violated the provisions of this title (except section 301) the Secretary shall investigate the complaint and if the Secretary finds probable cause to believe that such violation has occurred and has not been remedied he shall, without disclosing the identity of the complainant, bring a civil action in any district court of the United States having jurisdiction of the labor organization for such relief (including injunctions) as may be appropriate.  Any member or subordinate body of a labor organization affected by any violation of this title (except 301) may bring a civil action in any district court of the United States having jurisdiction of the labor organization for such relief (including injunctions) as may be appropriate.
  2. For the purpose of actions under this section, district courts of the United States shall be deemed to have jurisdiction of a labor organization (1) in the district in which the principal office of such labor organization is located, or (2) in any district in which its duly authorized officers or agents are engaged in conducting the affairs of the trusteeship.

350.005 ALTERNATIVE REMEDIES

            Section 304(a) of the Act provides a dual method of enforcement.  A member or subordinate body of a union may either institute a civil action in a district court of the United States or lodge a complaint with the Secretary of Labor.  The enforcement of Title III through a complaint to the Secretary of Labor can be initiated only by a written complaint alleging violations of any provisions of Title III except the reporting requirements in section 301.

            The Secretary is directed to investigate any such complaint.  If he finds probable cause to believe that a violation has occurred and has not been remedied, he may bring civil action for appropriate relief, including injunctions, in any district court of the United States having jurisdiction over the labor organization.

350.006

            Action was brought by members of the suspended executive board of a local under sections 302, 303, and 501 of the LMRDA to terminate trusteeship and for an accounting.  Defendant union moved to dismiss on the ground that the Secretary has exclusive jurisdiction in bringing suit to remove a trusteeship improperly imposed.  Flaherty v. McDonald, 178 F.Supp. 544 (S.D. Cal. 1959), reh’g, 183 F. Supp. 300 (S.D. Cal. 1960); Rizzo v. Ammond, 182 F.Supp. 456, 472 (D.N.J. 1960).  Held: motion to dismiss denied.
     
            The court rejected the holding in the Flaherty and Rizzo cases and held that the two remedies set out by section 304(a) were truly alternative remedies, and the filing of a complaint with the Secretary was not a prerequisite to individual suit.  Executive Board, Local Union No. 28, I.B.E.W. v. International Brotherhood of Electrical Workers, 184 F.Supp. 649, 655-56 (D. Md. 1960)

      (Technical Revisions: Dec. 2016)

VOLUNTARY TERMINATION

See Manual Entry 357.005.

SUIT BY MEMBER TO TERMINATE TRUSTEESHIP

352.001 LMRDA, SECTION 304(a)

            Any member or subordinate body of a labor organization affected by any violation of this title (except section 301) may bring a civil action in any district court of the United States having jurisdiction of the labor organization for such relief (including injunctions) as may be appropriate.

352.005 WHEN MEMBER MAY BRING SUIT

            Unless and until the Secretary of Labor brings suit, “any member .... affected by any violation of this title (except section 301) may bring a civil action in any district court of the United States having jurisdiction of the labor organization...”

352.100 COURT DECISIONS ON MEMBER’S RIGHT TO SUE

In Blue v. United Brotherhood of Carpenters and Joiners, 47 LRRM 2590 (D. Minn. 1964), members of a union sued to set aside trusteeship of Local 7 which they alleged was imposed in violation of Title III.  Union sought dismissal on ground court lacked jurisdiction because Title III requires complainant to proceed through the Secretary of Labor and not go directly into court.

   Court noted split in decisions:

Must sue via Sec’y

Cox v. Hutcheson, 204 F. Supp. 442, 450-51, 49 LRRM 2990 (S.D. Ind. 1962).

Rizzo v. Ammond, 182 F. Supp. 456, 471-72, 45 LRRM 3159  (D.N.J. 1960).

Flaherty v. McDonald, 183 F. Supp. 300, 306, 45 LRRM 2456  (S.D. Cal. 1960).

Can sue directly

Parks v. International Brotherhood of Electrical Workers, 314 F.2d 886, 923, 52 LRRM 2281 (4th Cir. 1963), cert. denied 372 U.S. 976, 52 LRRM 2943 (1963).

Air Line Stewards and Stewardesses Association v. Transport Workers Union, 55 LRRM 2711 (N.D. Ill. 1963).

Forline v. Helpers Local No. 42, 211 F. Supp. 315, 319, 51 LRRM 2639 (E.D. Pa. 1962).

Dole v. Local 427, International Union of Electrical, Radio and Machine Workers, 894 F.2d 607, 609, 133 LRRM 2362 (3d Cir. 1990).

Vars v. International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, 204 F. 245, 248, 50 LRRM 2851 (D. Conn. 1962).

Executive Board, Local Union No. 28, I.B.E.W. v. International Brotherhood of Electrical Workers, 184 F. Supp. 649, 655-56, 46 LRRM 2159 (D. Md. 1960).

Hotel and Restaurant Employees and Bartenders International Union v. Del Valle, 328 F.2d 885, 886, 55 LRRM 2595 (1st Cir. 1964).
           
            Court held weight of authority indicates exhaustion of remedy via Secretary is not prerequisite to suit and denied the union’s motion to dismiss.  Blue v. United Brotherhood of Carpenters and Joiners, 47 LRRM 2590 (D. Minn. 1964).

            (Technical Revisions: Dec. 2016)

352.105 EXPELLED MEMBER MAY CHALLENGE TRUSTEESHIP

            A union member who has been expelled from membership after the imposition of a trusteeship has standing to bring an action based on the alleged improper imposition of the trusteeship where in the same suit he seeks to be reinstated to membership.

See Vars v. International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, 204 F. Supp. 245, 248, 50 LRRM 2851 (D. Conn. 1962).


            (Technical Revisions: Dec. 2016)

*352.200  PARTIES TO SUIT AGAINST TRUSTEESHIP

            A union member bringing action against a trusteeship should probably sue the superior body imposing the trusteeship, the trustee and the president of the superior body. The labor organization is, of course, the major party defendant. See Cox v. Hutcheson, 204 F. Supp. 442, 450-51 (S.D. Ind. 1962).  But where the international president has power to continue the trusteeship, he, like the trustee of the local, is an indispensable party to the relief sought by the local members. Both officers should be joined as defendants in any such action.

Rizzo v. Ammond, 182 F. Supp. 456, 473, 45 LRRM 3159 (D.N.J. 1960).

            (Technical Revisions: Dec. 2016)

COMPLAINT BY MEMBER TO SECRETARY

353.001 LMRDA, SECTION 304(a)

            Upon the written complaint of any member or subordinate body of a labor organization alleging that such organization has violated the provisions of this title (except section 301) the Secretary shall investigate the complaint and if the Secretary finds probable cause to believe that such violation has occurred and has not been remedied he shall, without disclosing the identity of the complainant, bring a civil action in any district court of the United States having jurisdiction of the labor organization for such relief (including injunctions) as may be appropriate.

353.005 WRITTEN COMPLAINT

            Investigations under section 302 need not be predicated upon a written complaint, inasmuch as the broad investigative powers granted the Secretary under section 601 authorize an investigation whenever the Secretary believes such is necessary “in order to determine whether any person has violated, any provision of this Act.”
           
            Insofar as the enforcement power of the Secretary is concerned, investigations of section 302 which are predicated on the authority of section 601 cannot result in formal enforcement action in the absence of a written complaint.  However, the Secretary has the power, under such circumstances, to “report to interested persons or officials concerning the facts required to be shown in any report required by this title.”

*353.100  RENEWAL OF COMPLAINT

            If the Secretary has received a complaint alleging violation of Title III before the end of the 18 month period of presumptive validity, he may take enforcement action after the expiration of the 18 month period without a new complaint.

ACTION BY THE SECRETARY OF LABOR

354.001 LMRDA, SECTION 306

            The rights and remedies provided by this title shall be in addition to any and all other rights and remedies at law or in equity: Provided, That upon the filing of a complaint by the Secretary the jurisdiction of the district court over such trusteeship shall be exclusive and the final judgment shall be res judicata.

354.005 WHERE VIOLATION REMEDIED

            The language of section 304(a) does not require the Secretary to bring civil action where the matters complained of have been remedied.

354.100 PROCESSING OF COMPLAINTS

            After receipt of a valid complaint under section 304(a) of the Act, OLMS conducts an investigation that includes the development of all facts available to ascertain: (1) whether a trusteeship has in fact been imposed; (2) whether it has been imposed in accordance with the organization’s constitution and bylaws; and (3) whether it has been imposed for a purpose allowable under the Act.  The report of the investigative findings is then reviewed for a determination of the OLMS issues.  OLMS then notifies the parties concerned of its findings.  (It is important to note that OLMS is required not to disclose the identity of the complainant.)  If OLMS finds cause to believe that a violation has occurred, it will take such steps as are necessary under section 304(a).
           
            On the question of whether an aggrieved individual may file a private suit, the Department of Labor has taken the position that the statutory language permits a member to maintain such a suit under section 304(a) as a supplemental and accessory method of securing complete relief where appropriate jurisdictional grounds exist for direct action by the member against the labor organization.

            (Revised: Dec. 2016)

PRESUMPTION OF VALIDITY

355.001 LMRDA, SECTION 304(c)

            In any proceeding pursuant to this section a trusteeship established by a labor organization in conformity with the procedural requirements of its constitution and bylaws and authorized or ratified after a fair hearing either before the executive board or before such other body as may be provided in accordance with its constitution or bylaws shall be presumed valid for a period of eighteen months from the date of its establishment and shall not be subject to attack during such period except upon clear and convincing proof that the trusteeship was not established or maintained in good faith for a purpose allowable under section 302.

355.005 RETROACTIVITY

            The eighteen-month period is to be measured from the date of establishment of the trusteeship, even if establishment occurred before the effective date of the Act, or before labor union coverage under the Act.

            (Revised: Dec. 2016)

355.100 EIGHTEEN-MONTH PERIOD

            Enforcement of the provisions of Title III in proceedings under section 304 may be had at any time after enactment. The eighteen-month period is not a condition of enforcement, but relates only to the proof required in a court proceeding, whenever brought. In such proceeding, a trusteeship that meets stated conditions is “presumed” valid for a period of eighteen months from establishment. This is not a conclusive presumption; it may be rebutted by clear and convincing proof to the contrary. After the expiration of the eighteen-month period the presumption is to the contrary; i.e., the trusteeship is presumed invalid. But here again the presumption is rebuttable and may be overcome by clear and convincing proof that continuation of the trusteeship is necessary for a purpose allowable by section 302.

PRESUMPTION OF INVALIDITY

356.001 LMRDA, SECTION 304(c)

            After the expiration of eighteen months the trusteeship shall be presumed invalid in any such proceeding and its discontinuance shall be decreed unless the labor organization shall show by clear and convincing proof that the continuation of the trusteeship is necessary for a purpose allowable under section 302. In the latter event the court may dismiss the complaint or retain jurisdiction of the cause on such conditions and for such period as it deems appropriate.

SUIT TO CORRECT ABUSES
DURING TRUSTEESHIP NOW TERMINATED

357.005 ILLEGAL TRUSTEESHIP

            Termination of a trusteeship should preclude action by the Secretary only where restoration of autonomy can be considered a remedy appropriate to the violation that has occurred.  Where the violation is imposition of a trusteeship for an unauthorized purpose, restoration of autonomy after the organization has achieved its unlawful purpose certainly could not be considered a sufficient remedy.  Action by the Secretary despite termination of the trusteeship may be warranted in order to deprive the international of the fruits of its illegal act.

 

 

Last Updated: 1-5-17