CHICAGO — A federal judge will allow a Chicago Teamsters chapter to dissolve a trusteeship imposed by the union's international organization, after the local unit alleged it was punished for refusing to merge with another, larger union local.
U.S. District Judge Joan Lefkow issued an opinion and order Oct. 6 in favor of members and former officers of Teamsters Local Union 786, who sued the International Brotherhood of Teamsters, its Joint Council 25 and Terry Hancock, president of Local 731 and Council 25, alleging violations of the Labor Management Reporting and Disclosure Act.
According to Lefkow, Teamsters International General President James Hoffa Jr. imposed the trusteeship in the summer of 2019 after the Local 786 executive board refused to merge with Local 731. Lefkow said the defendants argued Local 786 failed to enforce collective bargaining agreements with employers and also wouldn’t stop representing employees of a company outside its jurisdiction.
With roughly 5,600 members, Local 731 is significantly larger than Local 786. Both represent Chicago-area construction workers and are two of 25 locals comprising Council 25, which covers Illinois and Northwest Indiana.
Michael Yauger, former Local 786 president, said Hancock pushed for a merger because Local 786 is “a competitor that provides higher wages and benefits than his own local does,” according to Lefkow’s summary of an affidavit. Yauger further testified Hancock offered him $200,000 annually over three years to make the merger happen.
Hancock said Local 786’s advantage comes from having a fully funded pension fund, which allows for allocating more money to wages. He said Yaugher, who was retiring, agreed to merger terms and pledged to endorse the proposal to his board.
Although the sides disputed when the trusteeship should’ve started and therefore ended its 18-month term, Lefkow noted Local 786 also argued it wasn’t “imposed in conformity” with the Teamsters International constitution. She found “minimal” evidence Local 786 was failing to collect benefit contributions from companies and noted it is in better financial shape than other nearby chapters.
However, Lefkow disagreed with Local 786’s position on the fairness of the hearing that preceded the trusteeship, finding the lack of a written hearing panel report and recommendation doesn’t violate the contract between Teamsters International and Local 786.
Lefkow sided with Local 786 on the question of whether the trusteeship was imposed in good faith. She noted Hoffa’s July 2019 letter setting forth three reasons for the imposition, and said she believed Hoffa's allegations in the letter were unfounded and lacked evidence to support them.
She also said it was likely Local 786 could prevail in its position that a dispute about an organizing campaign was “an ordinarily jurisdictional dispute that Teamster locals routinely have” and that the lack of a collective-bargaining agreement with the company in question works in Local 786’s favor.
With respect to Local 786’s retaliation argument, Lefkow said Yauger was unlikely to want to merge with Local 731 both because of his longstanding disagreements with Hancock and because Local 786 membership was in opposition. Further, she pointed to Hancock’s financial and competitive incentives for the merger and said the Teamsters International constitution left him “little recourse to accomplish the merger legitimately” after the Local 786 board refused.
Lefkow further said Local 786 makes a decent case the trusteeship isn’t being maintained in good faith and that denying its request for a dissolution injunction could cause irreparable harm to Local 786, because union leaders are barred from performing elected duties. She said granting the request wouldn’t harm Teamsters International, noting the trusteeship will expire in January regardless.