Opinion ID: 2981468
Heading Depth: 2
Heading Rank: 2

Heading: The Hampton Agreement

Text: Local 79’s long-time president, Willie Hampton, retired shortly after the unions began the process of merging. On May 14, 2007, Local 79’s executive board approved a retirement benefits package providing Hampton with, among other things, lifetime health and life insurance benefits, a new car, and six months’ severance pay. But before he retired, Hampton and Local 79 personnel expanded the benefits package through a contract entitled “Agreement Between Willie Hampton and SEIU Local 79” (hereinafter “Hampton Agreement”). As part of that agreement, and directly at issue in this litigation, the Hampton Agreement increased protections for several Local 79 employees. Specifically, the agreement guaranteed that: 2 No. 10-1543 [i]f during the 12 months following Willie Hampton’s retirement any of the below listed individuals are terminated, they will receive salary and insurance coverage through June 30, 2008. This will not apply to individuals terminated for cause or who voluntarily resign or retire. Plaintiffs Pearson, Childs, and Murdaugh were among the employees given protection under this clause. The Hampton Agreement was signed by Hampton and Plaintiff Pearson, who was hired as Local 79’s vice president shortly before the effective date of the Reorganization Agreement. It is doubtful, however, that Pearson had the authority to sign the agreement. Under the Local 79 constitution, the vice president was only empowered to represent the president when the president directed him to do so, to act as president in his absence at meetings, and sign any and all collective bargaining agreements on behalf of Local 79. III. SEIU HCMI Investigation and Plaintiffs’ Terminations SEIU HCMI became suspicious of the Hampton Agreement and investigated its adoption and propriety. From its investigation, SEIU HCMI’s counsel found that the Hampton Agreement was discussed and adopted at a Local 79 executive board meeting on June 27, 2007. But counsel also concluded that three executive board members never received notice of the meeting. Plaintiffs contested this conclusion in a SEIU International grievance proceeding described below, arguing that notice was sent to the three board members. SEIU HCMI’s investigation faulted Pearson for his role in the adoption of the Hampton Agreement. The union argued that under Local 79’s constitution, Pearson lacked the authority to negotiate or sign the Hampton Agreement and breached a fiduciary duty he owed to Local 79 by doing so. The investigation also faulted Childs for her actions during the formulation of the 3 No. 10-1543 Hampton Agreement. Childs was a Local 79 staff member and the union’s recording secretary. That position allowed her to take the minutes of union and board meetings, notify SEIU International of the results of Local 79 elections, and prepare copies of resolutions in advance of union votes. Between June 11 and June 28, 2007, Childs and Hampton co-signed Local 79 checks made out to several churches, schools, and other charities, for amounts totaling roughly $50,000. SEIU HCMI believed that it was improper for Childs to co-sign the checks, because the Local 79 constitution gives only the financial secretary-treasurer the power to disburse money paid to the union for the benefit of the organization and its members. As a result of the investigation, Local 79 disciplined the offending employees and rescinded the Hampton Agreement. On August 30, 2007, Local 79 suspended Pearson and Childs, and then the union fired Pearson on September 27, 2007 and Childs on October 1, 2007. At a Local 79 executive board meeting on December 15, 2007, the board nullified all actions taken at the June 27, 2007 board meeting because Pearson was not authorized to negotiate or sign the Hampton Agreement. The board also disapproved the contributions made pursuant to the checks signed by Childs and benefits granted to Hampton before his retirement. For his part, Plaintiff Murdaugh retired from his employment with Local 79 in 1999. Local 79 retained him as a consultant in 2000, after which he continued to receive his pension pursuant to an SEIU policy that allowed pensioners to provide consulting services. Murdaugh was released from service on August 30, 2007. 4 No. 10-1543