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SERVICE EMPLOYEES INTERN. UNION v. SERVICE EMPLOY.

September 18, 2002

SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL NO. 87, ON BEHALF OF ITS MEMBERS, AND AS EXCLUSIVE COLLECTIVE BARGAINING REPRESENTATIVE; RICHARD LEUNG, AHMED ABOZAYD, OLGA MIRANDA, JOSE BELTRAN, CARMEN CORTEZ, JAMES DAVIS, JOSE ESPINOZA-JARQUI, ABDUL ISMAIL, IRMA MANZANAREZ, GUSTAVO RENDON, RAMIRO RODRIGUEZ, SAM SIU, MUDAFFAR ALGAHIM, GREGORY CARTER, KAM SING CHAN, IN THEIR OFFICIAL CAPACITIES AS LOCAL UNION OFFICERS AND FIDUCIARIES, AND MIRIAM VIDES, MAURICIO VIDES, EMILIO MANZANARES, ALFREDO RODRIGUEZ, INDIVIDUALLY, AS RANK AND FILE MEMBERS OF SEIU LOCAL 87, PLAINTIFFS,
V.
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL NO. 1877; SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO, AND DOES 1 TO 10, INCLUSIVE, DEFENDANTS



The opinion of the court was delivered by: William Alsup, United States District Judge.

ORDER GRANTING SERVICE EMPLOYEES INTERNATIONAL UNION'S MOTION FOR PARTIAL SUMMARY JUDGMENT

INTRODUCTION

Plaintiffs are a local union of building service employees in San Francisco, and its elected offices, executive board members, trustees, and rank and file members. They bring suit to challenge the actions by defendants Service Employees International Union and another local union to merge their union with the other local union and to place a trusteeship over it. Defendant SEIU moves for partial summary judgment as to all of plaintiffs' claims and as to its own counterclaim for injunctive relief enforcing the trusteeship. This order GRANTS defendant's motion as to plaintiffs' first three claims relating to the validity of the merger, plaintiffs fourth claim relating to the trusteeship, and defendants' counterclaim to enforce the trusteeship.

STATEMENT

Defendant Service Employees International Union ("SEIU") is a labor organization within the meaning of the National Labor Relations Act, 29 U.S.C. § 152 (5) (Compl. ¶ 13). Local 87 is a labor organization within the meaning of the NLRA and is a chartered local union of SEIU (¶ 8). The SEIU Constitution and Bylaws are binding on Local 87 (Medina Decl. ¶ 2, Exh. A, Art. III § 2(a), Art. XXVII § 3).

In October 2001, SEIU notified Local 87's leadership that it was considering merging Local 87 and other SEIU local unions into SEIU Local 1877, as a single statewide SEIU local (First Leung Decl. ¶ 10.) SEIU was considering the merger in furtherance of the "New Strength Unity Plan," adopted at its 2000 Convention (First Baird Decl. Exh. 3 at 3-5). On November 15 and 16, 2001, SEIU conducted hearings on the matter (First Leung Decl. ¶ 13). At the hearing, Local 87 members voiced their strong opposition to the merger, and presented a report supporting their opposition, entitled "Proposal for a Northern California Building Service Local" (Ibid., Exh. 2). At its December 2001 membership meeting, Local 87's membership voted against the proposal for a statewide local (Id. ¶ 15).

On December 8, Local 87 members instructed their officers not to negotiate with the International and instead [to] fight the merger" (Second Baird Decl. Exh. 2 at 6). On January 13, 2002, SEIU International President Andrew Stern appointed four representatives to monitor and assist in the implementation of the merger directive at Local 87's offices (First Leung Decl. ¶ 17). Stern directed "the Officers and Staff of Local 87 to cooperate fully" with these personal representatives, including, but not limited to "giving them advance notice of any meetings of the Local, its officers or any affiliated bodies at which official business is to be conducted, providing unhampered access to the Local's office, and submitting all checks or other disbursement of Local Union funds for their review prior to issuance" (Id. Exh. 4).

The parties dispute whether Local 87's officers and executive board members cooperated with Stern's personal representatives. Plaintiffs claim that they provided Stern's personal representatives full access to Local 87's offices and financial records and invited them to Local 87 meetings (First Leung Decl. ¶ 18; Miranda Decl. ¶ 9; Abozayd Decl. ¶ 10). Defendant SEIU claims that the Board engaged in conduct to thwart the merger by taking the actions they claim provided the proper purposes for the trusteeship, as discussed below.

On or about January 13, 2002, SEIU's Executive Board adopted the hearing officer's recommendation that Local 87 should be merged into Local 1877 (First Leung Decl. ¶ 16). Around the same time, Local 87's leadership had begun to meet with representatives of SEIU and Local 1877 to discuss the terms of the merger (First Leung Decl. ¶ 14; Miranda Decl. ¶ 7; Abozayd Decl. ¶ 8). Local 87's leadership indicated that it would not oppose the merger if the membership supported it (Miranda Decl. ¶ 7; Abozayd Decl. ¶ 8).

On or about January 22, 2002, SEIU advised Local 87 of the terms of its imposed merger. In a letter from President Stern, SEIU told Local 87 officers that they were obligated to comply with the merger decision and to cooperate in the transition process, and directed them to "cease and desist any activity that undermines the merger process" (Monterroso Decl. ¶ 10, Exh. 5). SEIU ordered Local 87's officers and executive board members to recommend these terms to their membership (First Leung Decl. ¶ 21; Miranda Decl. ¶¶ 10-1). Local 87's officers and executive board members refused to recommend the merger to the membership because the proposed final terms did not include several items they had proposed (First Leung Decl. ¶ 22; Miranda Decl. ¶ 11; Abozayd Decl. ¶ 13). Local 87's leaders agreed to send a neutral notice to the membership calling for a membership meeting to discuss and vote on the proposed terms of the merger (First Leung Decl. ¶ 22, Exh. 7).

On January 23, 2002, SEIU representatives met with the Local 87 Executive Board to discuss any concerns the Board members had about the merger. The Executive Board stated that it voted not to "recognize the merger" and not to "cooperate with the merger" (Monterroso Decl. ¶ 15; First Baird Decl. ¶ 11). Local 87's leadership agreed to prepare a final counter-offer of merger terms and to present their proposal to legal counsel for SEIU on January 26 (First Leung Decl. ¶¶ 23-24; Miranda Decl. ¶ 12). The attorney asked to reschedule the meeting to the morning of January 28. Leung requested that Weinberg confirm with the SEIU International that the delay of their meeting was acceptable. He confirmed that the International approved the delay of the meeting (First Leung Decl. ¶ 24).

On January 25, 2002, President Stern was advised of the actions Local 87 had taken, and on January 27, issued an "emergency" trusteeship order pursuant to his right under SEIU's Constitution (Medina Decl. Exh. A, Art. VIII, § 7(a)). On January 28, 2002, the "emergency" trusteeship went into effect. SEIU cancelled the membership meeting scheduled for that afternoon, removed Local 87's officers from office, seized control of Local 87's building at 240 Golden Gate Avenue in San Francisco, and denied Local 87 executive board members entry (Id. ¶¶ 26-27).

SEIU's January 28, 2002 "Emergency" Trusteeship Notice makes it clear that the trusteeship was imposed because of Local 87's opposition to the proposed merger (Exh. 8). SEIU charged that Local 87's officers refused to recognize the merger, misinformed members, and used scare tactics to mislead members; failed to supply the International President's personal representatives with information necessary to develop an orderly merger transition; interfered with the local's finances and attempted to disrupt Local 87's collective bargaining relationships by encouraging, participating or permitting the circulation of dues revocation notices; engaged in dual unionism by taking steps to disaffiliate from SEIU and approaching another union; and engaged in financial malpractice by using local union resources to block the merger.

SEIU's constitution required the International Executive Board ("IEB") to conduct a hearing within 30 days of imposing an emergency trusteeship to determine if the imposition of the emergency trusteeship was appropriate and whether the trusteeship should continue (Medina Decl. Exh. A, Art. VIII § 7(f). On February 12, a hearing was conducted before an IEB hearing officer. The hearing officer upheld the decision to impose the emergency trusteeship, concluding that each of the charges discussed in the notice of the emergency trusteeship had been established (First Baird Decl. Exh. 3 at 1). He also determined that an ongoing trusteeship was justified because of new evidence SEIU discovered after imposing the trusteeship. This evidence included that the local union's grievance handling was in "disarray" and that the local union membership voted to provide its officers with severance pay in the event that their jobs were eliminated in the merger. The IEB hearing officer found that plaintiffs never had been negotiating in good faith with SEIU's representatives (Id. at 9).

Following the hearing on February 12, 2002, SEIU adopted the hearing officer's report finding that the emergency trusteeship was properly imposed and that the trusteeship should be continued for the following reasons:

(1) Local 87's officers had not negotiated in good faith with SEIU over the terms of ...

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