BNA Daily Labor Report: Teamsters Takes Over Houston-Based Local

April 21, 2009: International Brotherhood of Teamsters President James P. Hoffa April 15 imposed an emergency takeover of Teamsters Local 747, citing the Houston-based local's “failure to perform its duties” as bargaining agent for some 4,000 pilots at a dozen small passenger and cargo airlines.

In a message to Local 747 members posted on the local's Web site April 15, Hoffa also said in the course of investigating complaints about its representation, he received “credible information and reports” that certain local officials might have engaged in financial improprieties.

Local 747 President and General Counsel E.E. “Gene” Sowell, the only official named, had a legal services employment contract with the local that was intentionally concealed from the membership through a confidentiality provision, Hoffa said.

The decision to impose an emergency trusteeship followed the earlier takeover from Local 747 by the international's airline division as bargaining agent for 120 pilots at Cape Air Inc., based in Massachusetts (61 DLR A-6, 4/2/09).

Hoffa also cited the Teamsters' defeat by the United Transportation Union in a representation election April 8 among 273 pilots at Wyoming-based Great Lakes Airlines, who had been represented by Local 747 (67 DLR A-17, 4/10/09).

As a result of the local's failure to perform its duties, the union “is in immediate danger of losing bargaining units to ongoing decertification efforts,” Hoffa said. “[I]t is apparent that the current leadership of Local 747 has not been responsive to the complaints of these disaffected members and has no prospect of redressing the problems at this time.” Sowell, who previously objected to the international's action regarding Cape Air pilots, could not be immediately reached for comment. A spokeswoman for Local 747 declined comment.

Citing the need to take action to convince members that the Teamsters union is capable of performing as their bargaining agent and other reasons, Hoffa said he was imposing an emergency trusteeship under IBT's Constitution and appointing two experienced international officials as temporary trustees, based in the local's Houston office.

The trustees are “taking all necessary and appropriate steps to provide you with the highest caliber of representation,” Hoffa said in his message to Local 747 members.

A hearing will be held later to determine whether the temporary trusteeship should be continued.

Local Executive Board Faulted

Since 2005, Local 747 has paid Sowell more than $1.2 million for legal services under his employment contract, while incurring “steadily increasing outside legal fees for services” that Sowell was required to handle, Hoffa said.

The contract was concealed from the membership through inclusion of a confidentiality provision, he said.

The other members of Local 747's executive board “have either not performed their duty to oversee the employment contract or have failed to challenge Sowell's apparent abrogation of his responsibilities under the employment contract,” he said.

In addition, outside legal fees in 2007 and 2008 were “incorrectly and misleadingly” reported by Local 747 in its annual LM-2 reports to the Department of Labor as payment to Patrick Flynn for his services as an arbitrator, instead of as its principal outside counsel, Hoffa said.

Besides the pilots at Cape Air and Great Lakes, other groups that have complained to the international or expressed their desire to oust the Teamsters as their bargaining representative include North American Airlines, Gulfstream International Airlines, Omni Air International, Republic Air and affiliates, and Kalitta Air.

By Larry Swisher

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