1809 DiNatale, et al. v. UAW International Executive Board

Under the UAW International Constitution, the International Executive Board (IEB) can impose an administratorship for one of the purposes described in Article 12, §3(a) through (d).  Although the purposes are broadly stated in the Constitution, they do impose some limitation on the IEB’s authority.  The fact that the International Union disagrees with a local union’s decisions is not sufficient.  It cannot impose its authority over a local simply to save money or achieve some other kind of efficiency.  On the other hand, once one of the legitimate grounds for the imposition of an administratorship has been established, the only restrictions on the IEB’s discretion whether to employ this tool are the principles of fairness and due process enunciated in the UAW International Constitution and the Ethical Practices Codes. 

In this case, the IEB reasonably concluded that an administratorship was necessary under Section 3(a) to prevent or correct corruption or financial malpractice.   In the PRB’s view, the transfer of $200,000 from the Local’s General Fund to its Retired Workers Chapter Fund is the most significant and troubling act of financial impropriety cited by the IEB.  This transfer was made at a time when the number of active members within the Local was greatly diminished and Local officers were inevitably under far less scrutiny than usual from the active membership.  As the International Union has explained, Retiree Chapter funds may be used for purposes that active member dues may not.  So, the transfer risked violating these restrictions. 

The International Union has also demonstrated that Local 239 should have sought prior approval from the Regional Director before transferring the funds, but failed to do so.  The IEB also reasonably determined that it was necessary to act in light of the impending sale of the Local 239 building.  The International Auditor requested information regarding the sale during her audit.  She specifically asked whether an appraisal had been done.  The Local did not provide her with the requested information.  The IEB reasonably concluded that the Local’s lack of transparency regarding the disposition of its most significant asset suggested financial malpractice.