Court Opinion

ID: 3002686
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:32:28.000163+00
Date Added: 2024-06-11T12:52:33.822215
License: Public Domain

In the

 United States Court of Appeals
              For the Seventh Circuit

No. 08-2438

D ANIEL V OUGHT and DANIEL A LEXANDER,
                                    Plaintiffs-Appellants,
                          v.

T HE STATE OF W ISCONSIN TEAMSTERS JOINT COUNCIL N O. 39,
FRED G EGARE, PAUL LOVINUS ET AL.,
                                     Defendants-Appellees.

            Appeal from the United States District Court
                for the Eastern District of Wisconsin.
        No. 05 C 552—Aaron E. Goodstein, Magistrate Judge.

    A RGUED D ECEMBER 11, 2008—D ECIDED M ARCH 10, 2009

  Before MANION, EVANS, and TINDER, Circuit Judges.
  EVANS, Circuit Judge. If there’s any truth to the rumor
that Jimmy Hoffa has been resting for the last 33+ years
somewhere beneath the end zone at Giants Stadium (or
“The Meadowlands” as the New York Jets prefer) in East
Rutherford, New Jersey, this case, involving political in-
fighting at a Teamster’s Local in Wisconsin, might cause his
body to stir just a bit.
2                                               No. 08-2438

  In today’s case, we revisit the question of whether the
Labor Management Reporting and Disclosure Act
(LMRDA), 29 U.S.C. § 401 et seq., allows an individual to sue
over the loss of appointed union employment. Relying on
our precedent, the district court (Magistrate Judge Aaron E.
Goodstein sitting with consent) held that it does not. But
Daniel Vought and Daniel Alexander, former employees of
Local 662 of the International Brotherhood of Teamsters,
suggest that rule is wrong. We start with the facts viewed in
the light most favorable to their claim.
  In 2003, Vought and Alexander worked as appointed
business agents for Local 662 in Eau Claire, Wisconsin. At
the time, James Newell was the Secretary-Treasurer, the
union official with the most authority in the Local. But in a
matter of months, all three would be on the outside looking
in, removed by new leadership that viewed them with
suspicion and distrust.
  The power shift began in June 2003 with a disagreement
over the proper description for a union health plan. The
Clark County Sheriff’s Department, then affiliated with the
Teamsters, was considering jumping ship and choosing the
Wisconsin Professional Police Association as its union
representative. Robert Russell was the business agent
assigned to the sheriff’s department, so it fell upon him to
dissuade the department from leaving the Teamsters.
Allegedly he was overzealous in this task. According to
Newell, Russell misrepresented the nature of a union health
plan, claiming that it was only available to Teamsters
members when that wasn’t the case. When Newell caught
wind of this, he told Russell to stop, but Russell disagreed
No. 08-2438                                               3

that he had done anything wrong and disobeyed the order.
On June 27, 2003, Newell, with Vought as a witness,
confronted Russell once more and ultimately fired him.
  Russell sought review by the Local 662 Executive Board,
however, and the termination was reversed—despite
Newell and Vought’s presence on the panel. In addition to
Newell and Vought, the board members who heard the case
were President Dave Reardon, Vice President Rick Skutak,
Trustees John Kaiser and Vicki Kramer, and Tim Wentz. To
call the board polarized would be an understatement, and
the issue with Russell was just the starting point.
  As it turns out, Newell—with the support of Vought and
later Alexander—was on something of a crusade. On July
10, 2003, the same day as the reinstatement hearing, Newell
and Vought filed charges of impropriety against Reardon,
Skutak, and Kaiser. They also charged Russell for the Clark
County affair, and Russell shot back with his own charges
against Newell, claiming that Newell had a vendetta against
Reardon and tried to compel him (Russell) to say Reardon
was the man behind the Clark County incident on pain of
losing his job. Because all these charges involved Local 662
officers, the whole mess was submitted to Joint Council 39,
and a hearing was scheduled for August 1.
  Alexander became involved some two days before the
hearing. Fellow business agent Steve Novacek approached
Alexander that day bearing a message from Reardon.
Alexander was a known ally of Newell and Vought, so
Reardon’s message was simple: As long as he “kept [his]
nose out of the . . . hearing, [he] would be okay.” But
Alexander ignored this warning and testified on behalf of
4                                               No. 08-2438

Newell, supporting his charges against Russell and
Reardon. And Vought stood by Newell as well, serving as
his hearing representative. At the end of the day, though,
the only thing that would come from this aid would be
further ostracization; Newell had swiftly become unpopu-
lar, and those who had his back were guilty by association.
  The Joint Council issued its decision on August 14, 2003,
dismissing the charges filed by Newell and Vought and
sustaining Russell’s charge against Newell. Newell was
removed as the Secretary-Treasurer and suspended from
membership or employment with the Teamsters for five
years. As a result, Reardon became the acting Secretary-
Treasurer until the Local 662 Executive Board could meet
and decide upon a permanent replacement. Reardon didn’t
take long to exercise his new-found power. The same day he
was tapped for the job, he fired Vought as a business agent.
Alexander would be next.
  Unlike Vought, however, Alexander was given a chance
to save himself. On September 5, 2003, Russell filed a charge
against Vought, claiming that Vought should receive further
punishment because he was a party to Russell’s unwar-
ranted termination. Vought asked Alexander for help
defending against those charges and—against his self-
interest, as we shall see—Alexander agreed. Reardon was
upset by this. He called Alexander and told him Vought
was quite capable of representing himself, and it would be
a “bad idea” to get involved. On September 26, 2003, the
Executive Board held a hearing, following which it voted to
suspend Vought’s membership for two-and-a-half years.
The board found that Vought “plainly and willingly
No. 08-2438                                                  5

participated in ‘Newell’s cynical efforts to manipulate’ the
entire situation” involving Russell.
  Vought filed an appeal shortly thereafter, and the pres-
sure on Alexander, his confidant, increased. Reardon
threatened to fire Alexander if he caught him talking with
Vought or Newell about Local business, and another union
official (apparently a poker fan) flashed his fist in front of
Alexander, telling him to watch out for the “five of clubs.”
Undeterred, Alexander went on to represent Vought at the
appeal proceedings before the Joint Council on January 7,
2004. Reardon was visibly upset when he saw Alexander
show up for the hearing; meeting with him the next Mon-
day, Reardon told Alexander he couldn’t trust him any-
more. So Reardon made Alexander keep a minute-by-
minute log of all his work activities, something none of the
other union employees had to do, and tacked on other
administrative burdens. After a few days of this, Alexander
resigned, telling Reardon he could see the “[ ]writing on the
wall in that he was setting me up to file internal Union
charges against me and/or to terminate my employment.”
A handful more days saw the Joint Council’s decision on
appeal. Though Reardon took no part in the decision, the
suspension of Vought was approved.
  Alexander and Vought filed their complaint in federal
court the following year. (Newell joined in the suit but is not
a party to the appeal.) Suing under the LMRDA, the Na-
tional Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq.,
and Wisconsin law, they claimed, as might be expected, that
they were forced out in retaliation for blowing the whistle
on union impropriety. The district court ruled largely in
6                                                  No. 08-2438

favor of the defendants, dismissing the NLRA and state-law
claims and all but eliminating the LMRDA claims on
summary judgment.1 The court dismissed Vought’s claims
on the merits, never reaching that part of Alexander’s case
because it determined that he failed to exhaust union
remedies.
  The central question on appeal has to do with the district
court’s analysis of the LMRDA, but before we get there we
must address Alexander’s contention that exhaustion would
have been futile. He says it would have been pointless to
follow the grievance and appeal procedures because the
individuals who threatened and harassed him held sway
over the Executive Board and the Joint Council. It is true
that exhaustion, normally required under § 101(a)(4) of the
LMRDA, 29 U.S.C. § 411(a)(4), may be excused in the case
of futility. But we review a district court’s decision requiring
exhaustion for an abuse of discretion, and “[t]o convince us
that the district court exceeded the bounds of its discretion
by not forgiving [his] failure to properly exhaust, [Alexan-
der] must establish that ‘union officials [were] so hostile to
[him] that [he] could not hope to obtain a fair hearing on
[his] claim.’ ” Stevens v. Northwest Ind. Dist. Council, 20 F.3d
720, 733 (7th Cir. 1994) (quoting Clayton v. UAW, 451 U.S.
679, 689 (1981)). We are not entirely sure that we would
have reached the same conclusion as the district

1
   The court did grant summary judgment in favor of Vought on
his claim that he was denied a fair hearing before the Executive
Board in violation of § 101(a)(5)(C) of the LMRDA, 29 U.S.C.
§ 411(a)(5)(C). The parties stipulated to damages of approxi-
mately $9,000.
No. 08-2438                                                 7

court—under one view, the deck was stacked against
Alexander—but at bottom we do not believe the court
abused its discretion. Recall that Reardon and his allies
treated Alexander differently than Vought all along. They
never filed charges against Alexander, and they never
subjected him to formal discipline—possibly because
Alexander played no part in the underlying incident
involving Russell and filed no charges of his own. Given
these distinctions, it would be reckless to assume that the
internal process for Alexander would have been an empty
formality like it was, perhaps, for Vought. Stepping back for
a moment, though, we should point out that the issue of
exhaustion matters little in practice. Had the court excused
exhaustion, we are confident that Alexander would have
shared Vought’s fate on the merits as their claims hinged on
the same basic legal question.2
  Which brings us to the main issue: Did the district court
erroneously hold that Vought had no claim under the
LMRDA for the loss of appointed union employment, i.e.,
his business agent position?3 At first blush, one might think
so. Congress passed the LMRDA out of “concern with
widespread abuses of power by union leadership,” Finnegan
v. Leu, 456 U.S. 431, 435 (1982), and its provisions speak to

2
  Actually, that may be generous to Alexander. He had another
hurdle to clear—establishing constructive discharge—because he
was not actually fired.
3
   Counsel confirmed at oral argument that this appeal is not
about the loss of union membership or elected office, only the
loss of appointed union employment.
8                                                   No. 08-2438

that issue. Sections 101(a)(1) and (2), 29 U.S.C. §§ 411(a)(1)
and (2), guarantee equal voting rights, and rights of speech
and assembly, to “[e]very member of a labor organization”;
section 102, 29 U.S.C. § 412, authorizes civil actions for
violations of those rights; and section 609, 29 U.S.C. § 529,
makes it illegal for a union “to fine, suspend, expel, or
otherwise discipline any of its members for exercising any
right to which he is entitled under the provisions of [the
LMRDA].” All this with the overarching objective of
“ensuring that unions w[ill] be democratically governed
and responsive to the will of their memberships.” Finnegan,
456 U.S. at 436.
    But does the loss of appointed union employment impli-
cate the same concerns as the loss of union membership?
The Court in Finnegan said no. Considering the statutory
language and legislative history, the Court found it “readily
apparent . . . that it was rank-and-file union members—not
union officers or employees, as such—whom Congress
sought to protect.” Id. at 436-37 (emphasis added). The
petitioners in that case were fired from their business agent
positions after they supported the incumbent (and losing)
president in a Local election. The new president showed
them the door because he feared they lacked loyalty and
“would be unable to follow and implement his policies and
programs.” Id. at 434. The Court found no problem with this
decision under any of the provisions mentioned above.
Rather, the Court held that the LMRDA does not “establish
a system of job security or tenure for appointed union
employees.” Id. at 438. And to the extent the Act limits
action taken “as ‘part of a purposeful and deliberate attempt
. . . to suppress dissent within the union,’ ” it doesn’t do that
No. 08-2438                                                9

at the expense of “the freedom of an elected union leader to
choose a staff whose views are compatible with his own.”
Id. at 441 (quoting Schonfeld v. Penza, 477 F.2d 899, 904 (2d
Cir. 1973)).
  We took up a similar matter one year later, Hodge v.
Drivers Local Union 695, 707 F.2d 961 (7th Cir. 1983), to a
similar result. The case was slightly unique in that Hodge
did not openly oppose the new leadership—she was only
terminated because she had worked closely with the
opposition in the past—but we found this immaterial. As
the Court made clear in Finnegan, it didn’t matter whether
Hodge took sides:
    The crux of the Supreme Court’s reasoning in that
    decision was that the Act “does not restrict the freedom
    of an elected union leader to choose a staff whose views
    are compatible with his own” and that a union leader
    should be able “to select his own administrators” as a
    way of “ensuring a union administration’s responsive-
    ness to the mandate of the union election.” 102 S. Ct. at
    1873. Open or not, plaintiff’s electoral support of the
    [opposition] apparently led the union leadership to
    conclude that her “views,” however unadvertised, were
    not “compatible” and thus would interfere with smooth
    application of the new regime’s policy. The rationale of
    Finnegan plainly prevents application of the Act to
    prohibit the union leadership from acting on such a
    conviction.
Id. at 964.
  If these cases left any doubt about the viability of ap-
pointed employment claims—and it’s hard to see how they
10                                               No. 08-2438

could—we surely erased it in Brunt v. Service Employees Int’l.
Union, 284 F.3d 715 (7th Cir. 2002). As in Finnegan and
Hodge, the plaintiffs were ousted from their appointed
union jobs following an election. Before winning the contest,
the incumbent president warned that he would fire anyone
who ran against him. The first plaintiff took his chances and
ran anyway; the second supported the first; and the third
remained neutral in the contest despite the incumbent’s
admonition that even that could be dangerous to her career.
We held that the LMRDA afforded no relief to these individ-
uals because the reelected leader merely exercised his “right
to select his own employees.” Id. at 719. And it mattered not
that the plaintiffs lost their contingent membership rights as
a result because that was “merely incidental” to the lawful
termination of their employment. Id. at 720.
  Against this precedent, Vought faces an almost impossible
task. He must distinguish his plight from Finnegan, Hodge,
and Brunt, where nearly all the salient facts remain the same.
This, we conclude, he cannot do. Nevertheless, we detect
one meaningful difference that bears some discussion.
   Resolving this case isn’t quite as easy as it seems
because—unlike in Finnegan, Hodge, and Brunt—the union
leader responsible for the ouster of Vought was not elected.
If the “primary objective” of the LMRDA is to ensure that
unions will be “democratically governed and responsive to
the will of their memberships,” Finnegan, 456 U.S. at 436,
then the Finnegan rule makes perfect sense—at least where
an elected leader does the firing. If the union members
choose a new leader on a certain platform, but he is sur-
rounded by the old administration’s appointed cronies
No. 08-2438                                                 11

supporting conflicting ideas, shouldn’t he have the power
to replace them? If not, isn’t the will of the people—calling
for new leadership with fresh ideas—frustrated? Probably
so. But are the same concerns at play when the new union
leader gains his office not by election but by default, as in
this case? Probably not. It is hard to see how democracy is
furthered by allowing someone like Reardon, an unelected
leader, to fire a business agent.
  But these observations do not necessarily mean Vought
has a claim. First, there is nothing in the LMRDA that says
he does. Second, despite the difference between this case
and the Finnegan line, ruling against Vought does not run
afoul of the controlling precedent. Were we convinced that
the action taken was anti-democratic, that would change
things. For instance, if Vought were an elected business
agent, it would be difficult—indeed impossible—to sustain
the ruling. Under Sheet Metal Workers v. Lynn, 488 U.S. 347
(1989), it makes a world of difference if the business repre-
sentative is elected. “The consequences of the removal of an
elected official are much different” because it (1) denies
union members “the representative of their choice,” and
(2) produces a “more pronounced” chilling effect on the
exercise of free speech rights. Id. at 355. But when the ousted
employee secured his job through appointment, not elec-
tion, these harms are not present.
  Perhaps recognizing as much, counsel asks us to look to
the fact that Vought was elected in some capacity—as the
Local’s Recording Secretary. Since Reardon terminated the
employment of an elected official, this case becomes like
Lynn. But that logic ignores what Vought actually lost: an
12                                              No. 08-2438

appointed job. Nothing in Lynn suggests that an appointed
business agent is shielded from termination merely because
he also happens to hold an elected office. A similar argu-
ment was made and rejected in Finnegan. “As [union]
members,” the petitioners in that case “undoubtedly had a
protected right to campaign” for the losing candidate, but
they were not “thereby immunized from discharge at the
pleasure of the [new] president from their positions as
appointed union employees.” Finnegan, 456 U.S. at 437. Just
as “discharge from [appointed] union employment does not
impinge upon the incidents of union membership,” id. at
438, we do not see how it illegally impinges upon the
functions of elected office.
  Ultimately, the viability of Vought’s claim “must be
judged by reference to the LMRDA’s basic objective: ’to
ensure that unions [are] democratically governed, and
responsive to the will of the union membership as ex-
pressed in open, periodic elections.’ ” Id. at 354 (quoting
Finnegan, 456 U.S. at 441). Though we doubt the termination
in this case advanced this objective, we do not believe it
thwarted it. And we do not have to agree with the decision
to force out Vought to uphold it. Congress decided that the
harm that may occasionally flow from union leadership’s
ability to terminate appointed employees is less than the
harm that would occur in the absence of this power. It is not
our place to second-guess that legislative judgment. And the
possibility that Congress may wish to revisit its assessment
in the future—perhaps in response to cases such as
this—only underscores that we deal with the law as it is, not
as it might be.
No. 08-2438                                         13

  We have considered Vought and Alexander’s remaining
arguments (relating to damages) and find them mooted in
part and otherwise unpersuasive.
 The judgment of the district court is AFFIRMED.

                          3-10-09