The opinion of the court was delivered by: Judge Blanche M. Manning
The instant dispute stems from power struggles by opposing groups within Teamsters Local 743 ("Local 743"). The plaintiffs, two of whom are suspended members of Local 743, and one who is currently a member in good standing, brought suit against Teamsters Joint Council 25 and International Brotherhood of Teamsters ("IBT"), alleging that two of the plaintiffs, Richard Berg and Eugenia Alvarez, were improperly suspended from membership and removed as officers of Local 743. The plaintiffs seek injunctive relief in the form of an order reinstating Berg and Alvarez to membership and office. For the reasons stated below, the plaintiffs' motion for a preliminary injunction is denied.
The court sets forth in this section the basic facts surrounding the instant dispute. Other facts will be discussed later in this order as they become relevant to the court's analysis of the plaintiffs' claims. Defendant IBT is an international labor organization within the meaning of 29 U.S.C. § 402(i). Defendant Teamsters Joint Council 25 ("JC 25") is a subordinate body of IBT, is headquartered in Park Ridge, Illinois, and is a "labor organization" within the meaning of 29 U.S.C. § 402(i). JC 25 is an umbrella organization for all of the Teamsters local unions in the Chicago metropolitan area and Northwest Indiana. Local 743 is headquartered in Chicago and represents employees of nursing homes and hospitals as well as warehouses and manufacturing plants. John Coli is not named as a defendant but is President of JC 25 and is Central Region Vice-president for the IBT. Coli acted as the defendants' representative at the preliminary injunction hearing and testified at the hearing on behalf of the defendants. The IBT is governed by its constitution and bylaws. Local 743 and JC 25 are each governed by their own set of bylaws as well as the IBT constitution and bylaws.
Plaintiffs Berg and Alvarez were members of Local 743 in Chicago until they were removed from office as president and secretary-treasurer, respectively, and suspended from membership in May 2010, as detailed more fully below. The third plaintiff, Melanie Cloghessy, is a rank and file member in good standing of Local 743 who voted for Berg and Alvarez and also seeks their reinstatement to membership and office.
Berg and Alvarez became the Chicago leaders of Teamsters for a Democratic Union ("TDU"), which "is a reform caucus of rank-and-file Teamster members." Complaint at ¶ 11. Berg opposed Local 743's incumbent administration, which supported IBT President Jim Hoffa, in union elections in 1998, 2001, 2004, and 2007. Running under the New Leadership slate, Berg and Alvarez won the Local 743's 2007 election, which the Department of Labor supervised due to fraud in the earlier 2004 election. Specifically, after the 2004 election, the Department of Labor filed suit against Local 743 under the LMRDA alleging election fraud. Pursuant to a settlement, the regularly scheduled 2007 election was conducted under the supervision of the Secretary of Labor. Plaintiffs' Exh. EE. In addition, several members of Local 743, including Robert Walston and Richard Lopez, were indicted for crimes related to the 2004 election fraud. Plaintiffs' Exh. GG. Hoffa did not impose a trusteeship or appoint a personal representative to oversee Local 743 after the Department of Labor filed suit and alleged fraud in the 2004 election.
Berg and Alvarez began their terms as president and secretary-treasurer of 743, respectively, in January 2008. Berg testified that by 2007, he and Alvarez were the only Teamster leaders in Chicago who were openly active in TDU, though other members elected to Local 743 office with Berg and Alvarez supported the TDU platform. At the hearing, the parties detailed the historically contentious relationship between TDU supporters and Hoffa supporters. For example, delegates at IBT conventions preceding union elections often wear buttons or t-shirts in support of their platforms, which include statements like "TDU Sucks" and "Dump Hoffa." TDU supporters sold t-shirts with the "Dump Hoffa" slogan outside the IBT convention's main entrance while IBT secretary-treasurer Thomas Keegel has ended at least one speech with the statement "TDU sucks." Berg also testified that Hoffa supporters chant "TDU Sucks" on the convention floor and did not deny that the chant "Dump Hoffa" was used by TDU supporters.
Berg also testified that at the 2006 IBT convention at which he was nominated to run for Central Region Vice-president of the IBT, Hoffa supporter and then-Local 743 officer Richard Lopez punched Berg in the mouth. Berg filed an election protest and Lopez was found guilty of striking Berg in the face. No one else was charged or convicted of participating in that event. Testimony was also elicited regarding campaign literature distributed by both Hoffa supporters and TDU supporters critical of the opposing platform. For example, Berg's "New Leadership" slate distributed a flyer in 2000 stating in part that:
The stories of betrayal and sellout in Local 743 are many. You have your own story or stories. We have ours as well. A rigged vote, a rotten contract, blatant corruption, double dealing behind our backs, favoritism and much more.
Soon, we the members of Local 743, along with Teamsters all over the country, will have the chance to replace corrupt old guard union officials with new style fighters who will stand with the rank and file. It is time to get rid of Chester Glanton, Junior Hoffa, Philip John, Richard Lopez, Tom Vitali, Louis Sullivan and others who consistently sit on the wrong side of the table.
Plaintiff's Hearing Exh. 16-3. Berg also had a website in 2004 associated with his New Leadership slate, which criticized Hoffa. In addition, Berg and the slate under which he was running, the Leedham slate, distributed campaign literature in 2006 critical of Hoffa and accusing him and his supporters of corruption, broken promises and a failed record. See Plaintiffs' Hearing Exh. 16, pp. 22-25. After Berg was elected president of Local 743 in 2007, he was interviewed by Chicago Public Radio, which identified him as "the city's leading opponent of International Teamsters President James P. Hoffa." Plaintiff's Exh. R. In addition, Alvarez testified that she and Berg were confronted in 2009 by Brian Rainville, JC 25's executive director about an article in the Convoy Dispatch, a TDU publication, regarding the trial of the Local 743 officials with respect to the 2004 election fraud.
On August 28, 2009, a majority of Local 743's executive board filed internal union charges against Berg and Alvarez. The charging members were Larry Davis, Betty Richardson, Chantell Harlin and Fernando Garcia. All of these members except Betty Richardson were Berg and Alvarez's political allies, had run with Berg and Alvarz on the New Leadership slate, and were installed with them in January 2008. There were 10 charges filed against Berg and 6 charges filed against Alvaerz. The plaintiffs believe these charges were unfounded and politically motivated. The first charge against Berg is the one primarily at issue and thus the court quotes it:
1. Violated Section 14(A)(2) of Teamsters Local 743 Bylaws and All Related Sections of Local 743 Bylaws and the IBT Constitution
Paid out $21,000, 4 months of Health Benefits and agreed not to contest unemployment benefits for a Business Agent (Antonio Caldera). A Severance and General Release Agreement was signed by the Business Agent and President Berg. Attached is a copy [of] the signed check, deduction and adjustment worksheet, signed copy of the Severance and General Release Agreement and a copy of the Local 743 Check Summary Report for February 2009. These payouts were all done without the approval of the Executive Board.
Plaintiffs' Exh. S (emphasis in original). The first charge against Alvarez was very similar but charged her with signing the check to Caldera.*fn2
The record reflects the following series of events with respect to the severance payment to Tony Caldera, a member of Local 743, which is at the core of the first charge against Berg and Alvarez. Caldera was hired in January 2008 at an annual salary of $42,000 to $44,000, but was later terminated for failure to perform his duties. At a February 2, 2009, Local 743 board meeting, Berg told the board that Caldera threatened to sue the union for $90,000 but Berg stated he was hoping to pay Caldera between $20,000 and $25,000 to settle the matter. Berg's position is that, as he interpreted the bylaws, he had the power to enter into the severance agreement without board approval. See Plaintiffs' Reply in Support of Their Post-Hearing Memorandum at 2-3, Dkt. 47 ("Berg reasonably interpreted the silence of the bylaws on the subject of severance agreements as empowering him to enter into severance agreements with employees he was solely empowered to hire and fire, including organizers. This undoubtedly was not the only reasonable interpretation, but that doesn't mean that it was unreasonable. It certainly does not mean that it was misconduct.")(emphasis in original). Berg contends that even though he did not need the board's approval under his interpretation of the bylaws, he asked for a motion to approve the severance agreement "to create collectivity and to get our group to work together." Tr. at 100. However, Berg apparently dropped the issue after there were objections to the amount and discussion by the board as to why they had not been better informed about the problems with Caldera. No motion to approve the severance agreement was ever made at the February or any board meeting.
On February 18, 2009, Berg signed the severance agreement, which paid Caldera $21,000, plus four months health insurance and included a promise that Local 743 would not contest Caldera's unemployment claim. At the March 2, 2009, board meeting Berg informed the board that he had reached an agreement with Caldera and at the April 6 meeting, the board approved a routine motion to "pay the bills." One of the checks reported at the April 6 meeting was the $21,000 check to Caldera.
On September 5, 2009, Berg, who acknowledges that he was "probably aware" of the August 28, 2009, charges against him at that time, started a phone poll to approve the severance agreement with Caldera. Local 743 Bylaw 14(f) authorizes the president to conduct a "phone poll" between board meetings. A majority vote in the phone poll constitutes formal action by the board; however, any action must be confirmed at the next "formal session" of the board.
According to Berg, he conducted the phone poll on the advice of the Local 743 attorney and John Coli, president of JC 25. Berg drafted the phone poll which states in part that:
President Berg previously reported to the Executive Board that Tony Caldera had agreed to resign his position as Organizer with Local 743 and settle all outstanding grievances and/or claims on the Local in return Local 743 would pay him $21,000. President Berg said that he considered this a Labor Relations issue. This was not challenged by the Executive Board.
President Berg has discussed the issue with legal council [sic] which said this was acceptable as per our bylaws. Council [sic] further said he would recommend a vote to approve as well. Therefore:
Resolve, to accept Tony Caldera's resignation and signed documents to avoid any potential litigation and resolve the matter completely. In return Tony Caldera would receive $21,000.
IBT Hearing Exh. 3, attachment B.
Berg testified that the phone poll was conducted between September 5 to 8, 2009, and that he personally polled himself, Alvarez, and Chantell Harlin, who all voted yes. Harlin, however, one of the individuals who filed the charges against Berg and Alvarez, denies that she told Berg yes. Tr. at 482. Byron Richardson voted yes while the others voted no; thus, with a "yes" vote listed for Harlin, the phone poll passed by a majority of four to three. The phone poll was never "confirmed" at a board meeting as the bylaws require.
The charges against Berg and Alvarez were filed with JC 25 as required under the Local 743 bylaws and the IBT Constitution because they involved a majority of Local 743's Executive Board. Berg was formally served with the charges by letter dated September 9, 2009, by the JC 25 Secretary Treasurer. JC 25 Exh. Binder 2, Joint Council Tab, Tab 1, p. 1. The letter informed Berg and Alvarez and notified them of the hearing date, time and place. The letter also instructed Berg and Alvarez that "[e]ach party may be assisted in his/her presentation only by a member in good standing of his Local, who is not going to be a witness." Id. Berg wrote a letter to the JC 25 on September 15, 2009, in which he acknowledged receipt of the charges and asserted his preliminary objections to the charges. JC 25 Exh. Binder 2, Joint Council Tab, Tab 1, pp. 2-3. In the letter, he stated that "[Charges] 1 and 2 deal with matters that have been approved by the Local 743 Executive Board at the September 2009 meeting and in a separate phone poll." Id. At the hearing Berg testified that he meant that Charge 1 concerning the $21,000 payment to Caldera was approved in a phone poll and the subject of ...