Legal Decisions: Holschen vs. IUPAT

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In Holschen v. International Union of Painters, an Eighth Circuit U.S. Court of Appeals case decided this April, the Court affirmed the Federal District Court’'s decision to dismiss, on summary judgment or directed verdict, all of Holschen'’s LMRDA claims against the Union.

Stephen Holschen, a painter and union member, had supported the losing candidate in a 2003 election for the business manager for Union'’s District Council #2 in St. Louis, Missouri. The victor, Kevin Kenny, dismissed Holschen as a DC 2 labor organizer, a position Holschen had held since 2001. Holschen remained a member of the Union and in 2006 took a non-union position with the City of St. Louis. Holschen accused Kenny of having him blackballed from union jobs between 2003 and 2006. Both Courts noted that the collective bargaining agreements (CBAs) the Union entered into with prospective employers do not require the employers to hire union members. The Union operates a non-exclusive hiring hall and union members can either seek employment through the Union or on their own. Holschen was only able to present hearsay evidence that Kenny tried to blackball him and no evidence at all that Kenny was acting in his official union capacity. Moreover, Holschen failed to show damages, inasmuch as the hours that Holschen actually worked in 2004 and 2005 did not differ appreciably from the hours he worked before his candidate lost to Kenny.

In early 2006, while Holschen was working for the City of St. Louis, he tried to organize the City'’s Water Department employees. However, these employees fell under the jurisdiction of the Carpenters’ Union. When the Painters' Union found out about Holschen’s organizing efforts, they sent him a letter on February 8th ordering him to cease and desist because ignoring jurisdictional lines was a violation of the Union’s constitution. At the same time the Painters' Union had successfully organized the city'’s lead abatement painters. It was also at this time that Holschen announced his intention to run against Kenny as business manager in June of that year.

Holschen contended that Kenny and the Union acted inconsistently in directing him not to organize City Water Department workers while conducting a campaign to organize lead abatement painters. Holschen filed charges against Kenny for failure to fulfill his obligations to organize City workers. In response Kenny filed charges against Holschen for ignoring the February 8th cease and desist letter and for filing baseless charges against Kenny.

The Union notified both Kenny and Holschen that the disciplinary hearing for both parties would be held on April 13, 2006. The Union’s constitution requires the sequestering of both witnesses and parties. But a party can request at anytime to be admitted to the hearing room to hear evidence or cross-examine witnesses. Holschen was so notified of this procedure in a letter from the Union. On the night of the hearing Holschen was sequestered in the same room with a witness, who was subsequently summoned to testify. At no time did Holschen request to be present in the hearing room. When Holschen was finally summoned to the hearing room to present testimony, he objected to the presence on the trial board of an individual who worked directly for Kenny. His objection was sustained and the individual was removed from the trial board. After his testimony, Holschen was asked by the chairman of the board if he were satisfied with his case and Holschen said “yes”.

The trial board found Holschen guilty, fined him $15,000 and expelled him from the Union. He was told he could only exercise his appeal rights if he first paid the fine.

In his Federal District Court case Holschen alleged several violations of the LMRDA and a state law claim for intentional interference with a valid business expectancy. The District Court dismissed the state law claim as being preempted by the LMRDA and in the alternative subject to the NLRA and therefore barred by its six month statute of limitations. The Union was granted summary judgment on the LMRDA voting rights claim and the trial board bias claim. The two other LMRDA claims went to trial but after Holschen presented evidence, the District Court granted the Union’'s motion for a directed verdict. In the first claim Holschen alleged a violation of his right to a full and fair hearing because he wasn't allowed to cross-examine witnesses or present evidence. In the second claim he alleged violation of his free speech rights because he was blackballed for opposing Kenny.

The Court of Appeals reviewed the District Court'’s summary judgments de novo and reviewed its evidentiary rulings in the jury trial for a clear abuse of discretion. In upholding the dismissal of the state law claim, the Court of Appeals found that the Union'’s obligation to Holschen with respect to job referrals was determined by the CBAs. Under the LMRDA, a state law claim is preempted if “its resolution depends on the meaning of a collective bargaining agreement.” As a matter of law, a valid business expectancy has to be more than a hope of employment. The Union'’s CBAs left the choice of employment entirely up to the employer. The question of whether Holschen had a valid business expectancy could only be determined by looking at the meaning of the CBAs. Therefore, the issue was governed by the LMRDA and not by state law.

With respect to the claim of trial board bias, Holschen argued that previous cases established that he did not have to show actual bias but merely the inference of bias. But the Court of Appeals noted that these cases were all based on the participation of an adversary on the trial board. In Holschen’s case, he objected to the appearance of an adversary and the Union upheld Holschen’s objection and removed the adversary from the board. Holschen also argued that bias can be inferred if the trial board adduces no evidence to support the charges. But Holschen only focused on the charge of organizing outside of the Union'’s jurisdiction after he received the cease and desist letter. Holschen failed to deny that there was some evidence that he had filed baseless charges against Kenny. Accordingly, the Court rejected his inference of bias argument.

The Court of Appeals then examined whether it was an abuse of discretion for the District Court to have directed verdicts on the two LMRDA issues that went to trial-- Holschen'’s right to a full and fair trial and his free speech/retaliation claim. In the course of making that determination the Court of Appeals also reviewed the exclusion of testimony from several of Holschen'’s witnesses. The Court ruled that his witnesses’ testimony was properly excluded because it was based on hearsay and irrelevant because it referred to conduct by Kenny, not by the Union itself. The Court relied on a line of cases that established that ad hoc retaliation by a union officer in a non-exclusive hiring hall situation does not constitute retaliation by the Union and that in order for a retaliation claim to be actionable under the LMRDA it must be “the result of an established Union disciplinary process.”

The Court of Appeals noted that “a motion for a directed verdict should only be granted when the evidence produced by the party opposing the motion, when given the benefit of all reasonable inferences, would not suffice as the basis for a rational conclusion in that party'’s favor.” Accordingly, the Court ruled that, inasmuch as Holschen was fully informed of his right to present evidence and cross-examine witnesses and knew he had the opportunity to exercise that right and had knowingly waived that right during the hearing he participated in, the District Court did not err by directing a verdict on the full and fair hearing claim. Holschen never challenged the fairness of the Union’s procedure of sequestering parties and witnesses and of requiring a party to specifically request to be present for the delivery of testimony and to cross-examine witnesses. Accordingly, the Court determined that it was under no obligation to rule on that issue.

Holschen had based his retaliation claim both on the free speech provisions of Section 101 of the LMRDA and the remedy provided under Section 102, as well as Section 609, which more narrowly addresses the use of union disciplinary proceedings for the purposes of retaliation for the exercise of free speech rights established under Section 101. The line of Section 609 cases clearly distinguishes between the ad hoc, retaliatory actions of individual union officers and the use of formal union disciplinary proceedings to retaliate against a union member for the exercise of Section 101 free speech rights. The Court of Appeals ruled that Holschen’s claim of retaliation fails under Section 609 because he could not prove that the Union used its formal disciplinary proceedings to retaliate against him for opposing Kenny. The Court refused to rule as to whether Section 101 and Section 102 read together might have given more room for Holschen to establish union retaliation based on the conduct of DC 2's business manager outside of the formal disciplinary process. Some circuits have recognized a broader basis for a retaliation claim under Section 101. The Supreme Court has suggested that a broader remedy may exist under that section, but has to date made no ruling about it. The Court of Appeals stated it did not feel compelled to make a ruling because Holschen did not develop his argument that a retaliation remedy existed independent of Section 609 based on a reading of Sections 101 and 102. The Court made no citations at all to law review articles. Union democracy advocates need to more fully explore this line of argument.