Olms interpretative Manual

SUITFORACCOUNTING ORRELIEF

515.001LMRDA, SECTION501 (b)

When any officer, agent, shop steward, or representative of any labor organization isalleged to have violated the duties declared in subsection (a) and the labor organization or itsgoverning board or officers refuse or fail to sue or recover damages or secure an accounting orother appropriate relief within a reasonable time after being requested to do so by any member ofthe labor organization, such member may sue such officer, agent shop steward, or representativein any district court of the United States or in any State court of competent jurisdiction to recoverdamages or secure an accounting or other appropriate relief for the benefit of the labororganization.

515.100REQUEST TO UNION MUST BEMADE

Section501(b)requiresamemberof alabororganizationtorequestthelabororganization“tosueorrecoverdamages orsecure anaccounting orotherappropriaterelief”beforesuch

membermaysue“anyofficer,agent,shopsteward,orrepresentativeofanylabororganization”whois alleged tohave violated hisfiduciary responsibilities asdescribed in section 501(a).

Pursuant to this provision, as a precondition to a union member or members bringing alawsuit for breach of fiduciary duty, the member(s) must make a request to the union or itsofficers to address the alleged breach, and the request must either be refused or not acted uponwithinareasonable time. Courts havediffered overwhat action must berequested.

Somecourtshaveheldthataunionmember must firstrequestthattheunionoritsofficersbring legal proceedings to obtain for the union one or more of the following: damages, anaccounting, or other appropriate relief.See, e.g., Adams-Lundyv. Association of ProfessionalFlightAttendants,844 F.2d245, 248-50(5th Cir.1988); Erkinsv.Bryan, 494F.Supp. 732(M.D.

Ala. 1980), rev’d, 663 F.2d 1048, 1052 (11th Cir. 1981), cert. denied, 459 U.S. 989 (1982). Othercourts have held that the request need not be to pursue legal proceedings, and that a request forpaymentofdamages orotherappropriate reliefforthe union,or foranaccounting, willsuffice.
Compare Saundersv. Hankerson, 312 F.Supp.2d 46, 61-63, 174 LRRM 2824 (D.D.C. 2004)(court found that request retirement satisfied by language of a press release that accompanied aprotestagainstaunionorganizedbyplaintiffunionmember,asthereleasesaidthatunion “mustrespond to entire membership” about “alleged improprieties”); Morrisseyv. Cocker, 55 LRRM2532 (Sup. N.Y. 1964) (state trial court held that a written demand allegedly submitted to theunionthat certainrecords be turnedover did notsatisfy the requiredrequest foran accounting).

However, evenmost ofthecourts thatrequirethattherequestbeto bringlegalproceedings do not require that legal action be specifically mentioned in the request, and haverequired only that the request provide some notice to the union that legal action might beappropriate.See, e.g.Association of Professional Flight Attendants, 844 F.2d at 249-50; Dinkov.Wall,531 F.2d 68,72-73 (2d Cir.1976);Antalv.Budzanoski,320 F.Supp. 161(W.D. Pa. 1970),

rev’din part,Sabolskyv.Budzanoski, 457F.2d 1245,1252-53 (3dCir. 1972),cert.denied,409
U.S.853 (1972).

(Revised:Dec. 2016)

515.201EXHAUSTION OF REMEDIES

Most courts have held that union members need not exhaust any available internal unionremediesasapreconditiontobringing suitforbreachoffiduciary dutyunderSection501(b).See,e.g.,Cowgerv. Rohrbach,868 F.2d 1064, 1066-67(9th Cir.1989);Erkinsv. Bryan, 494 F.Supp.

732(M.D. Ala.1980), rev’d, 663F.2d 1048, 1052-53(11thCir. 1981),cert.denied,459U.S. 989
(1982).See alsoInternational Longshoremen's Associationv. Virginia International Terminals,Inc., 932 F.Supp. 761, 763 (E.D.Va.1996) (whether to require exhaustion of internal remedies iswithindiscretion oftrial court).

(Revised:Dec. 2016)

515.301UNION AS PARTY TOSUIT

Courts are divided over whether a union, as an entity, can sue its officers for breach offiduciary duty under Section 501.Compare International Union of Operating Engineers, Local150v. Ward, 563 F.3d 276, 282-89, 186 LRRM 2368 (7th Cir. 2009) (unions have an impliedcause of action under Section 501(a) to sue its officers in federal court for violation of thefiduciary duties imposed by the statute) and International Union of Elec., Electronic, Electrical,Salaried,MachineandFurnitureWorkersv.Statham,97F.3d1416,1418-21,153LRRM2663

(11th Cir.1996) (Section 501(a) was intended to create a federal cause of action that can beasserted by the union on its own behalf), with Building Material &and Dump Truck Drivers, Local420v. Traweek, 867 F.2d 500, 506-07, 130 LRRM 2441 (9th Cir.1989) (court, focusingexclusivelyonSection501(b),declinedtorecognizeanimpliedfederalcauseofactionforsuitsbylaborunionsandfoundthataunioncannotsueunderSection501).However,somecourtshave held that unions should be joined, or should conduct themselves, as party plaintiffs when theSection 501 claim, if successful, would accrue to the union’s benefit.See, e.g., Brinkv. DaLesio,453F.Supp. 272, 98 LRRM 2333 (D. Md.1978); Purcellv. Keane,277 F.Supp. 252, 67 LRRM
2216(E.D. Pa. 1967), aff’d,406 F.2d 1195, 70 LRRM3167 (3d Cir. 1969).
A union is not an indispensable party defendant to a Section 501 claim brought bymembers, and whether a union can even intervene in a Section 501 case depends on what intereststhe union seeks to advance and on the circumstances of the case.See, e.g., Purcell v. Keane, 277F.Supp.252, 257-58(E.D. Pa.1967), aff’d, 406F.2d 1195,70 LRRM3167 (3d Cir.1969) (union
and union’s president not indispensable party defendants in Section 501 suit); InternationalBrotherhood of Teamstersv. Hoffa, 242 F.Supp. 246, 254-55, 59 LRRM 2460 (D.D.C.1965)(union could intervene to defend the validity of a constitutional amendment, but not to defendindividualdefendantschargedwithbreachingfiduciary duties).Tothecontrary,section501 doesnot allow a union to be named as a defendant.Frantz v. Sheet Metal Workers Union Local No.73,470 F. Supp. 223, 225-26 (N.D. Ill. 1979).

Dec.2016 (Revised Jan.2021)