Internal Affairs and Lawsuits
Internal Union Elections
Internal union elections are heavily regulated by federal law. The U.S. Department of Labor enforces the legal requirements. Elections must be run in conformity with the law and with the union’s constitution. Violations of either can cause the election to be set aside by the government and rerun. Contributions by the union and employers to candidates for union office are prohibited. This can also be something that causes an election to be set aside.
It is important to involve a knowledgeable attorney long before the election to ensure that it is properly set-up to prevent problems. Cary Kane’s attorneys have years of experience helping unions run their election and dealing with DOL investigations of complaints about the election.
Membership Demands for Financial Records
Federal law also regulates financial disclosure by unions. The appropriate LM Report must be filed annually with the government. Accountants knowledgeable about how union expenditures should be classified must be engaged to prepare the report, especially if the union is required to file an LM-2.
Record-keeping requirements are complex and are subject to audit by the DOL. Members under particular circumstances are entitled not only to see the LM report but also the records backing up the entries. Refusal to provide the information may result in successful litigation with the union paying the plaintiff’s legal fees.
Breach of Fiduciary Duty Lawsuits
Union officers and staff have a fiduciary duty to handle the union’s moneys carefully and to spend it only on approved union purposes.
Officers must pay attention to obtaining approvals of expenditures required under the Union’s constitution. Failure to do so may result in the official being found personally liable to the union for expenditures he or she improperly authorized and spent.
If the union fails to act on a member’s demand that it files an action to recover moneys improperly spent, gives that member the legal authority to bring a federal lawsuit against the officials accused of making improper expenditures. Any moneys recovered because of the action belong to the union, not the plaintiffs. In a successful action, the union is liable for the plaintiff member’s reasonable attorney’s fees.
These are complex issues requiring experienced counsel. Cary Kane is available to help.
You can reach us at (212) 868-6300 or here.