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United States v. Roth

June 5, 1964

UNITED STATES OF AMERICA, APPELLEE
v.
HAROLD ROTH, ET AL., DEFENDANTS-APPELLANTS.



Before Moore,*fn* Smith and Hays, Circuit Judges.

Author: Moore

MOORE, C.J.:

These are appeals by defendants Roth and Sternberg from convictions in the Southern District of New York, for violations of section 302 of the Labor Management Relations Act of 1947, 29 U.S.C.A. § 186(a), which prohibits an employer from paying or delivering "any money or other thing of value" to a representative of his employees. Roth was sentenced to six months in jail and fined $10,000; Sternberg was sentenced to two months in jail and fined $4,000. At a separate trial, Milton Holt, the recipient of the "thing of value," was found guilty by a jury of violating § 186(b), which prohibits the receipt of anything of value from an employer by an employee representative. Holt was sentenced to six months and fined $10,000. Execution was suspended on all three sentences.

There is no real dispute about the facts. In 1957 Roth was president of National Vending Corp. and Continental Vending Machine Corp. and Sternberg was a high ranking employee of these corporations (Sternberg signed the collective bargaining agreement for the corporation). Holt was the secretary-treasurer of the local union representing the employees. Sternberg was also the vice president of Valley Commercial Corp., a private finance company in which Roth was the major stockholder. In October of 1957 Sternberg, with Roth's approval, called Abrams of Adams Associates, another private finance company, and asked Adams to do them a personal favor by loaning Holt $30,000 without collateral or interest. Valley Commercial sent Adams Associates the funds with which to make the loan. Adams Associates thereupon made the loan and took Holt's note, endorsed by his wife. Eight months later, Holt repaid the loan.

In April of 1959 Sternberg again requested Adams Associates to make a short term loan ($54,600 - two days) to Holt without interest or collateral. This pattern was repeated in May of 1959 ($12,000 - 18 days). All the loans were repaid, and all were backstopped by a Valley Commercial check except for the May 1959 loan. These three loans constitute, respectively, the subject matter of counts 1, 3 and 5 on which Roth and Sternberg were convicted.

At the time of these transactions, the statute involved, 29 U.S.C.A. § 186, 61 Stat. 157, read:

Restrictions on payments to employee representatives; exceptions; penalties; jurisdiction; effective date; exception of certain trust funds .

(a) It shall be unlawful for any employer to pay or deliver, or to agree to pay or deliver, any money or other things of value to any representative of any of his employees who are employed in an industry affecting commerce.

(b) It shall be unlawful for any representative of any employees who are employed in an industry affecting commerce to receive or accept, or to agree to receive or accept, from the employer of such employees any money or other thing of value.

On September 14, 1959, this section was amended, 29 U.S.C.A. § 186, 73 Stat. 537, to read:

Restrictions on payments and loans to employee representatives, labor organizations, officers and employees of labor organizations, and to employees; exceptions; penalties, jurisdiction; effective date; exception of certain trust funds .

(a) It shall be unlawful for any employer or association of employers or any person who acts as a labor relations expert, adviser, or consultant to an employer or who acts in the interest of an employer to pay, lend, or deliver, or agree to pay, lend, or deliver, any money or other thing of value -

(1) to any representative of any of his employees who are employed in an industry affecting commerce . . .

(b)(1) It shall be unlawful for any person to request, demand, receive, or accept, or agree to receive or accept any payment, loan, or delivery of any money or other ...


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