August 2, 2012

Dana A. Brigham

General President

International Union of Elevator Constructors

Subject: Local 1 Report

Committee: Regional Director, Mike Langer

Regional Director, Terence Carr

Director of Organizing, William H. Stanley

President Brigham,

The Committee you assigned to investigate certain issues in Local 1 has prepared the following narrative for your considerations.

Background:

1. On October 3, 2005, Local 1, New York, New York (Local 1), entered into a Non-Prosecution Agreement with the U.S. Attorneys Office for the Eastern District of New York. This agreement placed specific requirements on Local 1, including its officers. (Attachment 1)

2. The Bradlau Group, LLP issued its Final Report on October 10, 2008, (Bradlau Report) detailing Local 1’s compliance regarding the Non-Prosecution Agreement. (Attachment 2)

3. Local 1 submitted its October, November, and December 2011, IUEC Monthly Reports to the International Office (IO) indicating the Local had organized eight (8) individuals. The IO lacked the required paperwork from the organizer to process the membership. Local 1 submitted its January 2012 Monthly Report to the IO indicating that Local 1 had organized another individual. The IO lacked the required paperwork from the Organizer to process the membership. (Attachment 3)

4. The IO called Organizer Ed Krull with questions regarding Local 1’s October 2011, November 2011, December 2011, and January 2012 IUEC Monthly Reports. The policy of the International is to only process organized members if a letter from an Organizer has been filed with the IO indicating the individual has prior elevator experience in accordance with International Policies.

5. On January 23, 2012, the IO emailed Organizer Krull requesting required documentation regarding individuals listed as organized on Local 1’s IUEC Monthly Report to the IO. (Attachment 4)

6. On February 2, 2012, Organizer Krull received information from Local 1 Organizer, Mike Halpin, regarding individuals listed as organized on Local 1’s IUEC Monthly Reports to the IO. (Attachment 5)

7. On March 5, 2012, Local 1 N.E.I.E.P Coordinator, James McGoldrick received a phone call from Carolyn Robinson, Supervisor Apprenticeship Training, New York State Department of Labor, (NYSDOL) inquiring about Local 1 Apprentices and Helpers employed by Transel Elevator Company.

8. On March 6, 2012, Brother McGoldrick received a letter from Carolyn Robinson memorializing the March 5, 2012, phone conversations. (Attachment 6)

9. On March 7, 2012, Organizer Krull discussed the NYSDOL inquiry with Local 1 Business Manager/President, Lenny Legotte, and Local 1 Day Secretary, Dennis O’Neill; Organizer Krull was told that it was a Local matter, and he should stay out of it.

10. On March 8, 2012, Organizer Krull informed James McGoldrick that he was going to investigate the organized individuals employed by Transel Elevator.

11. On March 13, 2012, James McGoldrick called and emailed Organizer Krull to inform the International that the NYSDOL requested, in writing, an explanation of Local 1’s Hiring and Organizing Policies. (Attachment 7)

12. Business Manager/President Legotte, Organizer Krull, Dennis O’Neill, and James McGoldrick were scheduled to meet with the NYSDOL to discuss Local 1’s Hiring and Organizing Policies. Legotte cancelled the morning of the meeting, but the other three (3) individuals met with NYSDOL. NYSDOL informed the IUEC that they would need substantial proof of the experience of the individuals being organized by Local 1. The NYSDOL informed the IUEC that apprentices could only be organized if the entire company was being organized. NYSDOL also inquired into how Transel Elevator was employing Apprentice-Helpers in violation of New York State Apprentice Standards.

13. Local 1 submitted the Local’s IUEC April Monthly Report (Attachment 8) to the IO on May 11, 2012. This report indicated that Local 1 had organized ten (10) individuals.

14. On May 18, 2012, the IO received a letter from Honorary Retired Member, Brother Timothy J. Maloney. Honorary Brother Maloney cited several serious issues in his communication, and he asked G.P. Brigham to intervene. (Attachment 9)

15. The IO received several letters from Local 1’s membership complaining about the Local’s Hiring Hall procedures. (Attachment 10)

16. The Committee through the IUEC Director of Organizing, asked Brother Krull to investigate individuals listed as organized on Local 1’s IUEC Monthly Reports to determine their legitimize.

Assignment of Committee:

General President Brigham, under his authority granted by the International Union of Elevator Constructor’s Constitution and By-Laws, Article VI, assigned the three members listed above to investigate certain issues in Local 1.

Committee Actions:

Monday, June 11, 2012

The Committee appointed to investigate activities in Local 1 initiated activities on June 11, 2012. The IO sent Local 1 Business Manager/President, Lenny Legotte, an email (Attachment 11) with an attached letter dated June 8, 2012 (Attachment 12) notifying Brother Legotte of the Committees schedule and a request for certain documents.

A fax letter (Attachment 13) was received in the IO from Brother Legotte addressed to G.P. Brigham indicating Local 1’s desire to postpone the Committee’s arrival. Local 1 suggested meeting dates of June 22, June 26, June 27, June 28, and June 29, 2012.

The Committee arrived in New York, New York. Two (2) interviews were conducted that evening. The Committee interviewed Brother James McGoldrick and Brother Timothy J. Maloney. After each individual signed the consent agreement acknowledging the recording, the two interviews were completed. (Attachments 14 and 15)

Tuesday, June 12, 2012

The Committee arrived at Local 1’s office at 9:00 AM. The Committee was escorted to the Local 1 Executive Boardroom. Brother Legotte; Brother Frederick McCourt, Local 1 Business Representative/Vice President; Brother Denis Kilduff, Local 1 Business Representative/ Vice President, Brother Mike Riegger, Local 1 Secretary-Treasurer; and Brother Dennis O’Neill were present.

Brother Legotte informed the Committee that no records would be made available. Brother Legotte agreed to make staff available on Wednesday, June 13, 2012, for interviews.

The Committee returned to the Hotel where two additional interviews were conducted. The Committee interviewed Brother Joseph L. Fusilli and Brother Edward O’Hare. Each individual agreed to have his interview recorded and signed a consent form acknowledging the same. (Attachments 16 & 17)

Wednesday, June 13, 2012

The Committee, after several phone calls with Brother Legotte, was able to schedule time in Local 1’s office. The Committee arrived at Local 1’s office at 1:00 PM. At 1:34 PM, the Committee interviewed Local 1 Day Secretary, Dennis O’Neil. Brother O’Neil agreed to have his interview recorded, and he signed a consent form acknowledging the same. (Attachment 18)

Following Brother O’Neill’s interview, the Committee interviewed Local 1’s Secretary-Treasurer Mike Riegger. Brother Riegger declined to have his interview recorded. After concluding Brother Riegger’s interview, Brother Legotte announced that he had to leave at 3:00 PM and that all activities at the Local 1 office would conclude for the day.

Thursday, June 14, 2012

The Committee arraigned to interview Brother Brian Kelly. Brother Kelly agreed to have his interview recorded and signed a consent form acknowledging the same. (Attachment 19)

The Committee made arrangements with Local 1 to reconvene at Local 1’s office at 1:00 PM. Local 1 made financial records available to the Committee. The Committee reviewed the records until 3:30 PM when Brother Legotte announced his departure and withdrew the documents and scheduled the Committee to return. A review of the Local’s Petty Cash was completed. After a review of the Petty Cash, the Committee left Local 1’s office for the day.

Tuesday, June 26, 2012

Brothers Langer and Carr of the Committee arrived at Local 1’s office at 9:00 AM. The Committee discussed with Brother Legotte the need to review the financial records unassisted by Brother Legotte or his staff. The Committee assured him that the Committee would make no copies of these documents. The request to view in private was requested so that the Committee could converse privately. The review of the documents was to take place in Local 1 Executive Board Room with the door to remain open. Brother Legotte refused to provide the records to the committee absent his supervision. All requested documentation was not present in the boardroom. Brother Legotte indicated the Bradlau Group was also reviewing the same financial documents in an adjacent room and that Brothers Langer and Carr would take precedence over the Bradlau Group . Local 1 did not refuse the Committee access to the documents it provided but insisted on terms worrisome to the Committee. The Committee, after a short private consultation regarding Brother Legotte’s terms, agreed to end the review of the records. The Committee departed Local 1 at approximately 9:30 AM.

Committee Inquiries:

1. Lawsuits: The Committee asked to review the Lawsuit settlements and was denied the opportunity.

2. Finances: The Committee was unable to review Local 1’s entire Finances.

1. The Committee reviewed Local 1’s Petty Cash.

3. Hiring Hall: The Committee made several inquires to determine Local 1’s Hiring Hall Policies and the implementation of it.

1. The Committee reviewed Local 1’s members’ report of hours to the N.E.I.B.P. for 2011 through April 2012. (Attachment 20)

2. The Committee reviewed all Organized Apprentices in Local 1 who were reported from January 2008 through June 2012 to N.E.I.E.P. (Attachment 21)

3. The Committee reviewed Local 1’s Membership List.

4. Local 1 Trials: No inquires were made by the Committee. The Committee understood that individual members are protected by and have appellate rights guaranteed by the International Constitution and Bylaws

5. Legotte’s Expenses: The Committee was unable to review Local 1’s entire Finances.

Findings of the Committee

1. Lawsuits:

Brother Legotte admitted that the Local Union had settled two (2) lawsuits, but Brother Legotte indicated that each contained a non-disclosure clause that prevented him from sharing the settlements with the Committee. Brother Riegger indicated that he and Legotte executed the settlement agreements, and they, in fact, do contain the non-disclosure clause. Brother Riegger indicated that the membership of Local 1 was not covered by the non-disclosure clause and members were permitted to review the settlements. The Committee asked Brother Legotte to produce the non-disclosure for its review. Brother Legotte said he would but never produced the clauses. The Committee asked Brother Legotte to let Brother Carr, a Local 1 Member, review the settlements. Brother Legotte indicated that the lawsuit settlements were not available.

The Committee was unable to determine the amount of any settlement(s). The Committee, by reviewing the Bradlau Report, was able to determine that neither Local 1 nor the former Local 1 officers cited in the complaints had insurance to cover the cost of a judgment awarded to either plaintiff. The Bradlau report indicated that should either of the plaintiffs prevail and the court award a monetary judgment against Local 1, the Local may have to assess each member to raise the money to pay the judgment.

2. Finances:

The Committee was given limited access to the finances of the Local Union. The Committee did review the petty cash using the Imprest Petty Cash Procedures provided by Dan Winters and Company. The Committee determined that the Petty Cash Account was adequately maintained.

The Committee was not given adequate time to review the weekly expenses of the full-time officers and staff. The Committee was not allowed to review the expenses without supervision. Brother Legotte insisted on being present during all reviews. Brother Legotte’s refusal to leave the room compromised the Committee’s ability to perform an adequate review.

The Committee on Tuesday, June 26, 2012, discussed the need to review the Local 1 finances in private and was told by Brother Legotte that he was going to be present during all reviews. It should be noted that during the Committee’s visit during the week of June 11, 2012, the Local Union’s own accounting firm, the Bradlau Group, was in Local 1’s office reviewing the Local’s finances without a monitor.

3. Hiring Hall

Local 1 currently has several collective bargain agreements (agreements) it services. The agreement with the greatest number of bargaining unit employees is the agreement between Local 1 and the Elevator Manufactures Association of New York, Inc. (EMANY). (Attachment 22) The Local also has other agreements negotiated that cover the construction and operation of temporary elevators. These agreements designate the expired agreement negotiated between Local 1 and the Contractors’ Association of Greater New York, Inc. (Attachment 23) as the agreement establishing the conditions of employment.

Each of these agreements contains language that requires the Local Union to maintain an open employment list, and the provisions on how individuals listed on the open employment list will be dispatched. The EMANY Agreement (Section II) contains a provision that dictates that the first individual listed shall be the first dispatched from the open employment list.

The Committee interviewed Brother O’Neill, Local 1 Day Secretary, regarding Local 1’s Hiring Hall. According to Brother O’Neill, Local 1 maintained three (3) open employment lists; these lists were displayed in the Local’s Day Room when the Committee inquired the week of June 11, 2012. The three Open Employment Lists maintained by Local 1 were Journeymen or Mechanic List, a list of Apprentices, and a list for Operators. Brother O’Neil indicated that his duties were to dispatch individuals listed with the Union to contractors requesting manpower.

Section II, Paragraph 3, of the EMANY Agreement contains language that allows the contractor to hire within a quota system. Brother O’Neill indicated that this provision does not allow the contractor to hire from “other sources” when the Local Union has qualified individuals available for work and listed on the Local’s Open Employment List. Brother O’Neill’s statement was consistent with the language contained in Section II, Paragraph 4(b) that has been described as “cherry picking” the list.

Section II, Paragraph 4(a), of the EMANY Agreement, gives the contractor recall rights to recall any employee who was employed by the contractor in the last two (2) years.

The agreement negotiated between Local 1 and The Contractors’ Association of Greater New York, Inc. does not contain recall or first-in, first-out language. Brother O’Neill indicated that all dispatches from Local 1’s Open Employment Lists were first-in, first-out.

Subsequent to the Committees interview of Brother O’Neill, Local 1 on July 19, 2012, notified Brother Brian Kelly, in a letter from Brother Legotte (Attachment 24), that Local 1 had “announced to the membership on a number of occasions, that this Union does not maintain what is referred to as an “operators list.” Legotte’s letter was a direct contradiction to Brother O’Neill’s statement during his recorded interview on June 13, 2012, where Brother Legotte was present and the Committee’s observation of an Operators List posted in Local 1’s Day Room.

The Committee also inquired into the hiring of apprentices. The New York State Department of Labor Apprentice Training has approved Local 1’s Apprentice Standards. (Attachment 25) These apprentice standards dictate how apprentices are to be recruited, employed, and trained. Local 1 has a current recruitment list that includes individuals that have completed the recruitment process. Local 1 has organized approximately 407 apprentices from 2008 to June 1, 2012.

The IO received Local 1’s IUEC Monthly Report for the month of April 2012 that indicated Local 1 had organized ten (10) individuals as apprentices. IUEC Organizer Ed Krull started the investigation of ten (10) individuals listed on Local 1’s IUEC April Monthly Report. Brother Krull was asked by the IO to investigate these ten (10) organized individuals and to determine if he should draft the required communications to complete the required process. Unable to confirm with Local 1 how these ten (10) individuals qualified as being organized, Brother Krull started either contacting the individuals directly or contacting their employer to develop a knowledge base required to determine the legitimacy of their organized status.

Brother Krull developed the background on these ten (10) individuals and summarized his findings. (Attachment 26)

The Committee reviewed Brother Krull’s findings. The Committee asked Brother Krull to develop a list of all Organized Apprentices from 2008 to current date. This list included 407 individuals. (Attachment 27) A determination was made that several of the individuals listed were part of the ThyssenKrupp acquisition of Manico Elevator in New York, New York. After removing these individuals from the list, 129 individuals remained who were not organized according to IUEC Organizing Policies. The list included 12 individuals who were listed on Local 1’s N.E.I.E.P. Recruitment List. These individuals were ranked 25th, 28th, 37th, 44th, 75th, 93rd, 95th, 128th, 148th, 268th, 305th, and 380th. (Attachment 28)

It was noted from the Bradlau Report, Page 29, that Brother Legotte drafted a letter to E. James Walker, of EMANY dated July 25, 2007. In this letter to Walker, Legotte notifies Walker that any individual hired as “quota hires” will not be permitted to participate in the apprentice program in New York. The Bradlau Report, page 29, goes on to say “since the July 25, 2007, letter from Legotte to Walker that there have been no helpers hired “off the street” as “direct hires.” Footnote 51 on page 29 indicates, “Two (2) helpers were hired off the NEIEP recruitment list.” Brother Legotte was aware that apprentice “quota hires” “off the street” was an issue on July 25, 2007. The Committee has established 117 “organized apprentices” were “direct hires” “off the street” from January 2008 through April 2012 and classified as organized.

These “organized apprentices” were not identified as “quota hires” because Local 1 classified them as organized. The Bradlau Report stated on page 27 that “in March, TBG (The Bradlau Group) queried the Local 1 membership database remotely to test the validity of the ‘rumor’ (quota hires influencing the election outcome). Of about 2,700 active members in the database, TBG found that around 270 or ten percent, are classified in the membership database as having been quota hires.” The Bradlau Report makes no mention of querying the Local 1 database for organized individuals hired “off the street” with no prior elevator experience. Thirty-Seven (37) “organized apprentices,” contrary to the Local’s Apprentice Standards, were employed in 2008, bypassing the Local’s Open Employment List.

The Internationals Organizing Policy (Attachment 29) sets out how an individual may be organized. Local 1 was asked to produce the organizing policies filed on each company where these individuals were organized. The Local could not produce a policy. The Local was also asked to provide a copy of the Organizing Resolution (Attachment 30) passed by the membership of Local 1 and signed by the President and Recording Secretary; Local 1 could not produce this Resolution.

Local 1 has also failed to remit 1,146 months of Per Capita Tax on the 137 individuals that Local 1 has classified as organized apprentices starting in 2008. (Attachment 31) It should be noted that from 2008 to this day, Local 1 has maintained an active Apprentice Open Employment List and Apprentice Recruitment List.

On October 3, 2005, Local 1 entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Eastern District of New York. This Non-Prosecution Agreement required Local 1 to house a monitor imposed on it by the court. Local 1 was required to pay all expenses of the monitor. In this agreement, Local 1 agreed to 1) “Implementing procedures to ensure that the operator hiring list is maintained in a fair and impartial manner, and that elevator operators are only hired from the operator hiring list.” 2) Review and monitor Local 1's practices and procedures relating to its hiring list and assignment of work to its members. The requirements of the Non-Prosecution Agreement and the compliance of Local 1 is compiled in the Bradlau Group, LLP, Final Report dated October 10, 2008. (Attachment 32)

Other Findings

Concerns of the Local 1 Membership gained from interviews and in reviewing the employer’s hours submitted to the Plans Office, the Committee has made the following determinations:

1. Officers Compensation:

   1. Reports that Local 1’s Officers receive $99.00 per week as an expense allowance.

   2. Local 1’s Constitution and Bylaws (Attachment 33); Article XIX, Section 2, states: The President-Business Manager, Business Agents, Secretary-Treasurer, and Day Secretary shall continue to receive the expense allowances now in force which shall likewise be subject to change by majority vote of the membership at any regular meeting.

   3. The Bradlau Group, LLP, Final Report dated October 10, 2008, indicated: There are no allowances for expenses. Legitimate expenses incurred by officers on behalf of the union are charged to Local 1 credit cards or reimbursed in the exact amount upon submission of expense vouchers supported by receipts.

   4. The Committee found no evidence that the members of Local 1 reinstated the expense allowance at any regular meeting.

2. Local 1 Education and Training Fund (EAT):

   1. Local 1 has established a training fund governed by a written Agreement and Declaration of Trust that is administered by a Board of Trustees. The Employers $.12 per hour contribution rate funds the Trust.

   2. The Union Trustees are Brothers Legotte, Gary Riefenhauser, and O’Neill

   3. Employees are paid by the Plan Administrator

   4. There were accusations raised about two employees of the EAT Fund:

1. William Dunnigan:

   1. Dunnigan had approximately 6 years tenure.

   2. Dunnigan retired October 2011.

   3. Kidney illness required Brother Dunnigan to take excessive time off. Brother O’Neill testified that Brother Dunnigan was off work 6 weeks and that time off was approved by the Trustees of the EAT Fund. Legotte showed the Committee the minutes from the Trustees meeting where the time off was approved.

   4. Brother McGoldrick, who Brother Dunnigan was to report, reported that Brother Dunnigan was off 8 to 10 months.

   5. It has been reported that Brother Dunnigan was fully compensated during this time off.

2. Robert Stork:

   1. Stork was formerly a Business Representative in Local 1.

   2. Stork’s employment through the EAT Fund started in October 2011 and he retired June 1, 2012.

   3. Brother O’Neil testified that Brother Stork was off approximately one (1) week with knee surgery and took one week’s vacation to cover his time off.

   4. Brother McGoldrick, who Brother Stork was to report, indicated that he took 6-8 weeks off for knee and hernia surgery while receiving full compensation from the EAT Fund.

   5. Brother McGoldrick also testified that Brother Stork made his own hours. When Brother McGoldrick took his concerns to Brother Legotte, Brother Legotte told McGoldrick to “shut up and you better hope your friends have jobs for you because if you don’t join my team you are going to be out on the street.” Brother McGoldrick understood this to mean that Brother Legotte, as a Trustee to the EAT Fund, had full knowledge of Brother Stork’s work habits.

3. Nineteen (19) Independent Contractors frequently do not remit the minimum 160/165 hours required for their participation in the Plans. (Attachment 34)

4. Contractors who hired the 117 organized apprentices did not pay the required fringes to the Benefit Plans Office on 102 individuals. (Attachment 35)

5. At least one (1) contractor, Casey Transport Corp. is not engaged in the elevator industry. The owner, Kevin P. McSweeny, is the sole employee being reported to the Plans Office. (Attachment 36) It has been reported to this Committee that Mr. McSweeney is also a vendor of Local 1. Casey Transport Corp. has, in past years, leased and/or sold cars to Local 1. The current Collective Bargain Agreement between Casey Transport Corp. and Local 1 was executed on March 17, 2008. Local 1 Business Manager/President Legotte and Casey Transport Corp. Owner McSweeny signed the agreement. (Attachment 37)

Conclusions:

This Committee after conducting its interviews and inquiries submits the following:

1. We were not able to determine the state of Local 1’s finances.

2. We were not able to determine if the officers of the Local Union used Local assets for personnel gain.

3. We were not able to determine, as reported, that Local 1’s officers receive an expense allowance contrary to the Bradlau Group Final Report, dated October 10, 2008.

4. We were not able to determine the outcome of lawsuit(s) filed in New York State Court by former employees of the Local 1. According to the Bradlau Report, “neither Local 1 nor the former Local 1 officers cited in the complaints had insurance to cover the cost of a judgment awarded to either plaintiff. Should either of the plaintiffs prevail and the court award a monetary judgment against Local 1, the local may have to assess each member to raise the money to pay the judgment.”

5. We determined that Local 1 may have violated its Duty of Fair Representation by circumventing the Local’s hiring hall policies. If proven, the back pay liability potentially owed Local 1 members whose names appear on the Open Employment List could be very substantial. Individuals have been registered with the Local on the Open Employment List for years without being dispatched.

6. We were able to determine that Local 1 has traditionally maintained an Operators Open Employment List consistent with the Bradlau Report, the interview of Local 1 Day Secretary O’Neill and the Committees observation of the lists posted in the Day Room.

7. We determined that the Trustees of the Local 1’s Education and Training Fund may have compensated employees of the EAT Fund who did not regularly report to work for some period of time.

8. We were able to determine that contractors that employed the 102 organized apprentices appear to have treated them as ‘Probationary” and did not remit the benefits to the Plans Office in possible violation of the Benefit Trust and the International Organizing Policy. If proven the potential liability to the Plans could be very substantial.

9. We were able to determine that Local 1 has not remitted 1,146 months of per capita tax to the International.

10. We were able to determine that 19 owners of independent contractors in Local 1’s jurisdiction do not contribute the required 160/165 hours for their participation in the Plans.

11. We were able to determine that Casey Transport Corp. is not actively engaged in covered employment and therefore may not be qualified to participate in the Plans.

thegovernor@theshaft.org