The District Court (D.D.C.) dismissed Noble’s complaint with prejudice, and Noble appealed.
Under LMRDA, union officials are fiduciaries of union funds and must use those funds exclusively for the organization and its members. Noble’s first issue was that union officials were given $500 month expense allowances without having to submit any documentation justifying how the funds were spent. The Court of Appeals held that Noble presented sufficient circumstantial evidence that Union officials were using this money for personal items, including that officials overwhelmingly failed to submit expense documentation despite an obvious tax incentive to do so.
Noble next challenged the Union’s policy of reimbursing FICA taxes withheld from Union paychecks of its officers. The Court of Appeals held that the Union’s Executive Council’s decision to make this reimbursement was a reasonable interpretation of its powers under the Union constitution provisions regarding employment benefits to attract and retain personnel.
Noble also challenged Union payment of per diem allowances to the officers for attending the Union's national convention, as reimbursement for expenses that may not be incurred. Here also, the Union constitution provided for per diem allowances for attending the convention, and a committee determined the allowance each year. The Court found no clear impropriety in this practice.
Noble’s final argument was that, even if the challenged expenses were authorized by the Union constitution, Second Circuit precedent prohibited union officers from personally benefiting from the payments if it was “manifestly unreasonable“ for them to do so. The Court of Appeals held that Noble failed to show that the FICA and convention per diem allowances were outside the realm of reasonableness, so the District Court would be affirmed on those categories. The District Court was directed to make further inquiry into the $500 in-town expense allowances to determine whether there was personal benefit to the officers and, if so, whether it reached the degree of “manifestly unreasonable.”
Finally, the Court of Appeals reversed and remanded the District Court’s determination that Noble’s complaint that the Union had failed to supply him with records he had requested was moot.
Judge(s): Sentelle, Kavanaugh, Williams
Jurisdiction: U.S. Court of Appeals, D.C. Circuit
Related Categories: Employment
|Appellant Lawyer(s)||Appellant Law Firm(s)|
|Bernadette C. Sargeant||Law Office of Bernadette Sargeant|
|Appellee Lawyer(s)||Appellee Law Firm(s)|
|Bruce H. Simon||Cohen Weiss and Simon LLP|