     15-3300
     Daly v. United States of America v. NYC & Vicinity District Council

                         UNITED STATES COURT OF APPEALS
                             FOR THE SECOND CIRCUIT

                                  SUMMARY ORDER
     RULINGS  BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
     FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
     APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY
     ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX
     OR AN ELECTRONIC DATABASE (WITH THE NOTATION ‘SUMMARY ORDER’). A PARTY CITING A SUMMARY
     ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1        At a stated term of the United States Court of Appeals for
 2   the Second Circuit, held at the Thurgood Marshall United States
 3   Courthouse, 40 Foley Square, in the City of New York, on the
 4   27th day of September, two thousand sixteen.
 5
 6   PRESENT: DENNIS JACOBS,
 7            BARRINGTON D. PARKER,
 8                          Circuit Judges,
 9
10                JANE A. RESTANI,*
11                              Judge.
12
13   - - - - - - - - - - - - - - - - - - - -X
14
15   JOHN DALY,
16            Appellant,
17
18                -v.-                                           15-3300
19
20   UNITED STATES OF AMERICA,
21            Plaintiff-Appellee,
22
23                -v.-
24


           *   The Honorable Jane A. Restani, Judge for the United
     States Court of International Trade, sitting by designation.
                                                1
 1   NEW YORK CITY and VICINITY DISTRICT
 2   COUNCIL OF THE UNITED BROTHERHOOD OF
 3   CARPENTERS AND JOINERS OF AMERICA,
 4            Defendant-Appellee,
 5
 6   JOHN R. ABBATEMARCO, PASCHAL
 7   MCGUINNESS, ROBERT J. CAVANAUGH, IRVING
 8   ZEIDMAN, First Vice President,
 9   President FREDERICK W. DEVINE, Second
10   Vice President, FRANCIS J.P. MCHALE,
11   Secretary-Treasurer, ANTHONY SALERNO,
12   aka FAT TONY, VINCENT DINAPOLI, LOUIS
13   DINAPOLI, PETER DEFEO, ALEXANDER
14   MORELLI, aka BLACK ALEX, LIBORIO
15   BELLOMO, aka BARNEY, ANTHONY FIORINO,
16   NEW YORK CITY AND VICINITY DISTRICT
17   COUNCIL OF CARPENTERS PENSION PLAN,
18   PETER THOMASSEN, JOHN W. HOLT, SR.,
19            Defendants.
20
21   - - - - - - - - - - - - - - - - - - - -X
22
23   FOR APPELLANT:                NIALL MACGIOLLABHUI, Law Offices
24                                 of Niall MacGiollabhui, New York,
25                                 NY.
26
27   FOR DEFENDANT-APPELLEE:       THERESA J. LEE, Zuckerman Spaeder
28                                 LLP, New York, NY (James M. Murphy
29                                 & Gillian Costello, Spivak Lipton
30                                 LLP, New York, NY on the brief).
31
32        Appeal from a final order of the United States District Court
33   for the Southern District of New York (Berman, J.).
34
35        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED AND
36   DECREED that the judgment of the district court be AFFIRMED.
37
38        John Daly appeals from the final order of the United States
39   District Court for the Southern District of New York (Berman,
40   J.) upholding the recommendation of an Independent Monitor, made
41   pursuant to a consent order, to end Daly’s tenure as a shop
42   steward and executive delegate of the District Council of New

                                     2
 1   York City and Vicinity of the United Brotherhood of Carpenters
 2   and Joiners of America (the “Union”). We assume the parties’
 3   familiarity with the underlying facts, the procedural history,
 4   and the issues presented for review.

 5        Our review, like that of the district court, is de novo as
 6   to questions of law; but, under the terms of the consent order,
 7   our review of the final recommendation of the Independent Monitor
 8   is much more deferential--specifically, it is afforded “the same
 9   level of deference afforded to final agency action under the
10   Administrative Procedure Act.” Stipulation & Order
11   ¶ 5.b.iii(1) (Nov. 18, 2014) (A-430). The Monitor’s
12   recommendation, therefore, can be set aside only if it is
13   “arbitrary, capricious, an abuse of discretion, or otherwise
14   not in accordance with law” or “unsupported by substantial
15   evidence.” 5 U.S.C. § 706. See also United States v. Int’l Bhd.
16   of Teamsters, 247 F.3d 370, 379-80 (2d Cir. 2001) (describing
17   “narrow scope” of review where independent officer appointed
18   pursuant to consent order is “given wide discretion”).

19        1. The basis of the Monitor’s recommendation to remove Daly
20   from his positions in the Union was the conclusion that he
21   received benefit payments from his employer for hours he did
22   not work, in violation of 29 U.S.C. § 186. Daly argues that the
23   payments in question did not violate the law. The district court
24   rejected that argument, and so do we.

25        In order to avoid the corruption of union representatives,
26   section 186 (which is part of the Labor Management Relations
27   Act, commonly known as Taft-Hartley) prohibits union
28   representatives from receiving “any money or other thing of
29   value” from the employer. That prohibition has some exceptions,
30   two of which Daly argues should apply. Section 186(c)(1)
31   permits what would otherwise be prohibited payments by an
32   employer to a representative “who is also an employee or former
33   employee of such employer, as compensation for, or by reason
34   of, his service as an employee of such employer.” Section
35   186(c)(5) permits payments “to a trust fund established by such
36   representative, for the sole and exclusive benefit of the
37   employees of such employer, and their families and dependents”
38   provided that “the detailed basis on which such payments are
39   to be made is specified in a written agreement with the employer.”

                                     3
 1        Paid time off for union work that is authorized in a
 2   collective bargaining agreement is no different than other
 3   fringe benefits that may be bargained for, and is therefore
 4   payment “for, or by reason of” employment under section
 5   186(c)(1). BASF Wyandotte Corp. v. Local 227, Int’l Chem.
 6   Workers Union, AFL-CIO, 791 F.2d 1046, 1048-49 (2d Cir. 1986).
 7   Daly, however, identifies no such provision of the relevant
 8   collective bargaining agreement. On the contrary, the
 9   agreement provides for employer contributions only “for each
10   hour worked.” A-499. Because payment of benefits by the
11   employer for time spent doing union work is not bargained-for,
12   it is not payment “for, or by reason of” employment; and because
13   there is no provision for it in a written agreement, the section
14   186(c)(1) and (5) exceptions do not apply.

15        2. The finding that Daly received such unlawful payments
16   from his employer was supported by substantial evidence. The
17   Monitor relied on the results of an investigation that included
18   review of shop steward reports, remittance reports, sign-in
19   sheets, transcripts of Union proceedings, and financial records.
20   Daly was also interviewed as part of that investigation. The
21   “substantial evidence” bar is not especially high; it is met
22   by “less than a preponderance, but more than a scintilla of
23   evidence,” and “means such relevant evidence as a reasonable
24   mind might accept as adequate to support a conclusion.”
25   Cellular Tel. Co. v. Town of Oyster Bay, 166 F.3d 490, 494 (2d
26   Cir. 1999) (internal quotation omitted). Daly disputed the
27   evidence, but the Monitor’s finding was nevertheless within the
28   bounds of its permissible discretion.

29        After Daly challenged the evidence, the Monitor (with the
30   approval of the district court) issued a subpoena to Daly’s
31   mobile telephone provider to verify, from cellsite records, that
32   he was not at his work location when he claimed to have been.
33   Daly objects to that procedure on multiple grounds. Because the
34   Monitor’s recommendation was supported by substantial evidence
35   even in the absence of those records, however, we do not reach
36   those issues.

37        3. Pursuant to paragraph 5.b.iii of the 2014 consent order,
38   the Monitor recommended Daly’s removal as executive delegate
39   and as shop steward. Daly argues that recommending removal as

                                    4
 1   shop steward is improper under paragraph 5.b.iii, because the
 2   procedures described in that provision apply only to
 3   recommendations for removal from “office or employment,” and
 4   the position of shop steward is neither. Daly asserts that the
 5   Monitor can only seek removal of shop stewards pursuant to
 6   paragraph 5.f., which gives the Monitor authority to initiate
 7   disciplinary proceedings against “officers, employees, agents,
 8   representatives, or members.”

 9        We disagree. “Office or employment” is not defined by the
10   consent order. Although neither of the provisions described
11   above specifies its application to shop stewards, Daly makes
12   no persuasive argument that “office or employment” does not
13   include them. The plain meaning of “office or employment” is
14   broad; moreover, one of the express criteria by which the Monitor
15   can find wrongdoing under paragraph 5.b.iii strongly suggests
16   applicability to shop stewards: those criteria include
17   violations of “any fiduciary responsibility imposed by 29 U.S.C.
18   § 501.” That statute imposes fiduciary responsibilities on
19   “officers, agents, shop stewards, and other representatives”
20   of labor unions. Whatever the Monitor’s power to bring
21   disciplinary proceedings under paragraph 5.f., it is clear that
22   shop stewards can be guilty of conduct within the contemplation
23   of paragraph 5.b.iii that justifies a recommendation of removal
24   pursuant to that provision. The Monitor did not err on that
25   basis.

26        Accordingly, and finding no merit in Daly’s other arguments,
27   we hereby AFFIRM the final order of the district court.

28                                FOR THE COURT:
29                                CATHERINE O’HAGAN WOLFE, CLERK




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