The opinion of the court was delivered by: MISHLER
Plaintiffs bring this motion for leave, nunc pro tunc, to include in their complaint a cause of action for breach of fiduciary duty under Section 501(a) of the Labor Management Reporting and Disclosure Act of 1959 ("LMRDA"); 29 U.S.C. § 501(a).
The court has jurisdiction of this matter pursuant to 28 U.S.C. § 1331 and LMRDA § 102, 29 U.S.C. § 412.
Plaintiffs brought suit against International Brotherhood of Teamsters ("IBT"), Local 803 of IBT ("Local 803") and William Hagner, President of Local 803 ("Hagner"), claiming that defendants deprived them of strike benefits
and wrongfully abandoned plaintiffs during a strike.
As an additional cause of action, plaintiffs alleged that such behavior by defendants constituted a breach of fiduciary duty under LMRDA § 501(a); 29 U.S.C. § 501(a). Plaintiffs failed, however, to receive prior leave of the court before bringing action under § 501, as required by that statute.
Plaintiffs requested such leave, nunc pro tunc and oral argument was heard on plaintiffs' motion.
Defendants raised two arguments in opposition to the motion before us: first, that plaintiffs' allegations of wrongful behavior do not state a claim against defendants under the narrow scope of § 501 and, second, that leave of the court cannot be granted where plaintiffs have not satisfied the mandatory requirements set forth at § 501(b). We do not here decide the merits of plaintiffs' other statutory or pendent claims.
We conclude that the cause of action for breach of fiduciary duty under § 501 and the remedies afforded thereunder do not apply to the alleged behavior of defendants in this case. In addition, plaintiffs have not satisfied the statutory requirements of § 501(b). Accordingly, plaintiffs' motion for leave, nunc pro tunc, to plead under LMRDA § 501 is denied.
Plaintiffs were employed as part-time and full-time registered nurses at Brunswick Hospital Center ("Brunswick") in Amityville, New York. Local 803 was certified by the National Labor Relations Board ("NLRB") as the exclusive collective bargaining representative for plaintiffs on April 8, 1980, following a representation election conducted by NLRB in March, 1980. Prior to the certification election, Local 803 distributed leaflets, dated March 7, 1980, which stated, inter alia, that "NO INITIATION FEE" would be charged by Local 803 for any nurse eligible to vote in the election, that "there will be NO DUES to Local 803 for any nurse until a contract [is accepted]" and "if you decide that a strike is what it takes then we will bring to bear the unbeatable resources of the Teamsters Union which will be behind you until you get what you want."
Local 803 and Brunswick engaged in negotiations for a collective bargaining agreement but failed to reach agreement by July 11, 1980.
A strike was called by Mr. Hagner against Brunswick on July 11, 1980. The strike continued to November 27, 1981. Each plaintiff received weekly strike benefit payments from IBT through Local 803 for the period from July 11, 1980 to mid-September 1980. No strike benefit payments were made after October 1, 1980 by IBT or Local 803, although plaintiffs claim that they made "demand for such payments"
and that "nonpayment was the subject of many complaints by [Ms. Agola] and other plaintiffs to agents of Mr. Hagner and Local 803. "We demanded to know why our strike benefits were not coming through and asked Hagner to look into it."
Local 803 informed plaintiffs and Brunswick by letter, dated November 14, 1980, that "Local 803 disclaims interest in representing the registered nurses at Brunswick Hospital Center."
Local 803 unilaterally expelled plaintiffs from the labor organization. The nurses' strike continued to November 27, 1981 without representation by Local 803. Events following this period are not relevant here.
An action may be brought under LMRDA § 501(b) "when any officer, agent, shop steward or representative of any labor organization is alleged to have violated the duties declared in subsection (a)."
Section 501 does not provide a basis for actions against labor organizations. Head v. Brotherhood of Railway, Airline & Steamship Clerks (BRAC), 512 F.2d 398, n.1 (2d Cir.1975); Pignotti v. Local # 3 Sheet Metal Workers' Int. Ass'n., 477 F.2d 825, 832 (8th Cir.), cert. denied, 414 U.S. 1067, 94 S. Ct. 576, 38 L. Ed. 2d 472 (1973); Sabolsky v. Budzanoski, 457 F.2d 1245, 1249 (3d Cir.), cert. denied, 409 U.S. 853, 93 S. Ct. 65, 34 L. Ed. 2d 96 (1972). Thus, plaintiffs' suit for breach of fiduciary duty pursuant to LMRDA § 501 can properly be brought against defendant Hagner, President of Local 803, but not against the two defendant labor organizations, Local 803 and IBT.
The fiduciary duty imposed under LMRDA § 501(a) relates to the money and property of the labor organization. Section 501(a) of LMRDA provides that it is the duty of the officers and agents of a labor organization:
to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder. . . ."
In Gurton v. Arons, 339 F.2d 371 (2d Cir.1964), the United States Court of Appeals for the Second Circuit first held that § 501:
applies to fiduciary responsibility with respect to the money and property of the union and that it is not a catch-all provision under which union officials can be sued on any ground of ...