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Local 1498 v. American Federation of Government Employees

as amended september 3 1975.: August 20, 1975.

LOCAL 1498, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, A LABOR ORGANIZATION, E. H. GUY, R. E. HEAGY, APPELLANTS,
v.
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL/CIO, NATIONAL OFFICE, A LABOR ORGANIZATION, C. M. WEBBER, D. H. KERSHAW, R. L. SIMS, T. DANIELS, L. ALLEN, B. BLACKSTON, A. MUSE, COMMERCIAL UNION ASSURANCE CO., APPELLEES



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. D.C. Civil No. 74-2007.

Forman, Van Dusen and Garth, Circuit Judges.

Author: Garth

Opinion OF THE COURT

GARTH, Circuit Judge:

This appeal brings before us an order of the district court denying plaintiffs leave to bring suit under the provisions of the Labor-Management Reporting and Disclosure Act of 1959 (L.M.R.D.A.), 29 U.S.C. § 401 et seq. The district court held that it lacked jurisdiction inasmuch as plaintiffs' action for mismanagement of a local union's financial affairs was brought by a federal employee against a federally-recognized union and its national and local officers. The district court also held that jurisdiction was lacking under the other jurisdictional bases alleged by the plaintiffs. Accordingly, the district court denied plaintiffs' application for leave to sue, the only relief sought by plaintiffs. We agree with the district court that no jurisdictional basis exists, but we are obliged to remand for entry of an order dismissing the complaint to dispose of the entire proceeding.*fn1

The individual plaintiffs*fn2 are present members of Local 1498 of the American Federation of Government Employees (AFL-CIO) who seek to sue the national union (hereinafter "AFGE") and certain officers of both the national and local unions for alleged violations of fiduciary duties imposed by § 501(a) of the LMRDA.*fn3 The complaint which plaintiffs sought to serve on defendants reveals that plaintiffs seek recovery of monies alleged to have been misappropriated by officers of the local union who, along with officers of the national union, are charged with various misrepresentations and omissions concerning union procedures.*fn4 See Complaint, P7; App. at 37b. The defendant union AFGE and the plaintiff Local 1498 are unincorporated associations which limit membership to, and which represent only, Federal government employees.

Insofar as plaintiffs' cause of action is predicated upon the defendants' alleged breach of fiduciary duties imposed by § 501(a), we agree with the district court's conclusion that it lacks subject matter jurisdiction over that cause of action. We believe it settled in this Circuit that the provisions of the LMRDA are not applicable to government unions. A union consisting exclusively of government employees is not subject to the statutory prohibitions and rights created by the LMRDA. New Jersey County and Municipal Council #61 v. American Fed'n of State, County and Municipal Employees, 478 F.2d 1156, 1160 (3d Cir.), cert. denied, 414 U.S. 975, 38 L. Ed. 2d 218, 94 S. Ct. 290 (1973). Accord Stevens v. Carey, 483 F.2d 188, 191 (7th Cir. 1973); Colorado Labor Council v. American Fed'n of Labor and Congress of Industrial Organizations, 481 F.2d 396 (10th Cir. 1973); Wright v. Baltimore Teachers Union, 369 F. Supp. 848 (D. Md. 1974).

Although Title V of the LMRDA, the section of the Act which concerns us here, was not under consideration in the cases above cited, those cases involved the same determinative jurisdictional issue, dependent upon the same statutory language,*fn5 as is present in this case. We are concerned here, as were the cases cited, with whether a union was a "labor organization" within the meaning of that term as used in the LMRDA.

A brief analysis of the statute itself reveals the LMRDA's lack of application to government unions. We first recognize that the district court's jurisdiction under the Act may be invoked by "any person whose rights secured by the provisions of this [Act] . . . have been infringed by any violation of this [Act] . . . ." 29 U.S.C. § 412. Section 501(a) imposes duties for "officers . . . of a labor organization", while § 501(b) provides that:

"When any officer . . . of any labor organization is alleged to have violated the duties declared in subsection (a) [29 U.S.C. § 501(a)] . . . [a] member [of the labor organization] may sue such officer . . . to recover damages . . . ."

29 U.S.C. § 501(b) (emphasis supplied). The question then raised is whether the defendant officers are officers of "any labor organization" within the meaning of that term as used in the LMRDA, and specifically § 501.

The term "labor organization" as used in the LMRDA is as defined by statute:

"(i) 'Labor organization' means a labor organization engaged in an industry affecting commerce and includes any organization of any kind, any agency, or employee representation committee, group, association, or plan so engaged in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment."

29 U.S.C. § 402(i) (emphasis supplied). Consequently, within the ambit of the LMRDA, and thus § 501, a "labor organization" must deal with an employer and act as the representatives of employees of an employer. See 29 U.S.C. § 402(j)(2). "[A] labor organization is not covered unless it represents, or is chartered to represent, or is actively seeking to represent 'employees' of an 'employer' as those terms are defined in the act." Smith, The Labor-Management Reporting and Disclosure Act of 1959, 46 ...


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