decision and order regarding passero 6.5.13

7/28/2019 Decision and Order Regarding Passero 6.5.13

http://slidepdf.com/reader/full/decision-and-order-regarding-passero-6513 1/14

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

------------------------------------------------------------)(UNITED STATES OF AMERICA,

USDC SDNY

DOCUMENT

ELECTRONICALLY FILED

DOC#:

DATE FILED: (S--ll3

Plaintiff,90 Civ. 5722 (RMB)

-against-DECISION AND ORDER

DISTRICT COUNCIL OF NEW YORK CITY

and VICINITY OF THE UNITED

BROTHERHOOD OF CARPENTERS and

JOINERS OF AMERICA, et aI.,

Defendants.

------------------------------------------------------------)(Having reviewed the record herein, including (i) the Consent Decree entered into

between the Government and the District Council of New York City and Vicinity of the United

Brotherhood of Carpenters and Joiners of America ("District Council"), approved by United

States District Court Judge Charles S. Haight Jr. on March 4, 1994, ("Consent Decree"); (ii) the

Stipulation and Order, dated June 2, 2010, appointing Dennis M. Walsh, Esq. as the review

officer ("Walsh" or "RO") and vesting in him the authority to review the persons currently

holding office or employment and to "veto" any matter that may be "contrary to any fiduciary

responsibility imposed by 29 U.S.C. § 501" or that "is inconsistent with the objectives of [the]

Stipulation and Order;" (iii) the January 31, 2013 Notice of Possible Action by the Review

Officer to Joseph Passero ("Passero") notifying Passero "that the Review Officer is considering

issuing a veto of your service as president of Local Union [1556] of the United Brotherhood of

Carpenters CUBC')" because Passero "violated [his] fiduciary duty by [among other things]

providing personal information of members of Local Union 1556, including social security

numbers, to a convicted felon without the knowledge and [prior] consent of Local Union 1556's

1

Case 1:90-cv-05722-RMB-THK Document 1329 Filed 06/05/13 of 14



2

H[HFXWLYHERDUGDQGPHPEHUVKLS´1

(Notice of Possible Action at 1); (iv) 3DVVHUR¶V)HEUXDU\

2013 letter to Walsh acknowledging that he ³ by- SDVVHGSURFHGXUHV´DQG³PDGHVRPHPLVWDNHV

which may have placed some membership infoUPDWLRQWRXQZDUUDQWHGH[SRVXUH´(Passero

Letter at 2.) Passero also stated that ³I will stand by your decision, whatever it may be. If there

is a question of whether I . . . have not exercised properly the fiduciary responsibility bestowed

upon me by the membership . . . [I] never had any criminal intent or any intent to harm those

Members I represent.´ (Id. at 1); (v) the February 12, 2013 Declaration of Chief Investigator

Jack Mitchell ³0LWFKHOO´ concluding that Passero provided personal information, including

social security numbers, of dockbuilder members of Local Union 1556 to Tsakanikas ³without

appropriate safeguards and the approval of the executive board and membership of [Local

Union] 1556´(Mitchell Declaration ¶¶ 7, 13); (vi) the February 12, 2013 Notice of Veto by

Walsh dismissing Passero as the President of Local Union 1556, (Notice of Veto at 1 ± 2)2; (vii)

3DVVHUR¶Vappeal RIWKH52¶V9eto, dated March 13, 2013, contending the Veto was ³arbitrary

and capricious, an abuse of discretion, or otherwise not in accordance with the law,´(Passero

Appeal at 1 ± 2); (viii) the March 25, 2013 letter from Bridget M. Rohde ³5RKGH´ to the Court

asserting that ³there is no basis for vacating the veto because the RO acted within the scope of

his authority and rendered a decision that was not arbitrary or capricious and that was based on

substantial eYLGHQFH´(Rohde Letter at 1.) Rohde also states that 3DVVHUR¶V³unsworn

1 The person in question is James Tsakanikas ³7VDNDQLNDV´D³computer consultant for

Union Solutions, ,QFµ8QLRQ6ROXWLRQV¶)´ZKRRQ1RYHPEHUSOHDGJXLOW\WRWZR

counts of theft/embezzlement in connection with a health care benefit program in violation of 18U.S.C. § 669, one count of theft/embezzlement of an employee benefit plan in violation of 18

U.S.C. § 664, and two counts of false statements and concealment of facts in relation to

documents required by the ERISA in violation of 8 U.S.C. § 1027. Judgment at 2, United States

v. James, CR-06-00723-001 DLJ (N.D. Cal. Apr. 9, 2007); Mitchell Declaration ¶ 5.

2 3DVVHURLVFXUUHQWO\UXQQLQJIRU3UHVLGHQWRI/RFDO8QLRQLQWKH8QLRQ¶V-XQH

elections. (See +U¶J7UGDWHG-XQH, at 34:13 ± 15.)




3

accusations´WKDWMitchell included falsehoods, inaccuracies and misleading information in his

GHFODUDWLRQ³do not mHULWFRQVLGHUDWLRQE\WKH&RXUW´(Rohde Letter at 3 ± 4); (ix) the hearing

held by the Court on June 4, 2013 during which, among other things, the RO stated that there

ZDVD³KXe DQGFU\IURPRXWUDJHGPHPEHUV´that their social security numbers had been

disclosedDQGWKDWZKLOH3DVVHUR¶VLQWHQWLRQVLQVHHNLQJWRGHYHOop a software program for

Local Union 1556 may have been good, 3DVVHUR¶V methods were flawed. (See +U¶J Tr., dated

June 4, 2013 at 18:7 ± 8, 20:17; see also +U¶J Tr., dated May 22, 2013); and applicable legal

authorities, WKH&RXUWKHUHE\GHQLHV3DVVHUR¶Vappeal as follows:3

1) The RO was (originally) appointed in order to help ensure the ³eradication of

corruption and racketeering as they affect union carpenters and union employers.´6WLS2UGHU

at 3.) The RO seeks to instill the highest ethical standards in the management of the affairs of

the District Council.

2) The RO is empowered to veto matters enumerated in Paragraph 5.b.iii of the

Stipulation and Order.4

(Stip. & Order ¶ 5.b.) In this instance, the RO based his veto on

subsections (d) and (e). (Notice of Veto at 1.) ³The RO unquestionably has the power to remove

elected officials.´United States v. Dist. Council of New York City, No. 90 Civ. 5722, 2012 WL

5236577, at *7 (S.D.N.Y. Oct. 23, 2012).

3 Any issues raised by Passero not specifically addressed herein were reviewed on the

merits and rejected.

4 ³8SRQUHYLHZLQJDQ\PDWWHUGHVFULEHGLQSDUDJUDSKVELDQGELLWKH5HYLHZ2IILFHU

may determine that the matter reviewed (a) constitutes or furthers an act of racketeering asdefined in 18 U.S.C. § 1961; or (b) furthers or contributes to the association, directly or

indirectly, of any member, employee, officer, trustee, or representative of the District Council or

the Benefit Funds with any barred person; or (c) is contrary to or violates any law or Court order

entered in this case; or (d) is contrary to any fiduciary responsibility imposed by 29 U.S.C. § 501

or [ERISA]; or (e) is inconsistent with the objectives of th[e] Stipulation and Order. Upon such a

determination . . . the Review Officer may veto or require the District Council to rescind its

DFWLRQSURSRVHGDFWLRQRUODFNRIDFWLRQ´6WLS2UGHUE




4

3) ,QUHYLHZLQJWKH52¶VGHFLVLRQWKH&RXUW DSSOLHVWKH³VWDQGDUGRIUHYLHZ

DSSOLFDEOHWRUHYLHZRIILQDODJHQF\DFWLRQXQGHUWKH$GPLQLVWUDWLYH3URFHGXUH$FWµ$3$¶

U.S.C. §§ 701 et seq.´6WLS2UGHU 11.) The 5HYLHZ2IILFHU¶VILQGLQJVRIIDFW³DUHHQWLWOHG

to affirmance on review if they are reasonable and supported by substantial evidence in the

UHFRUGDVDZKROH´DQGPD\EH³VHWDVLGHRQO\if they are unsupported by substantial evidence.´

United States v. Dist. Council of New York City, 941 F. Supp. 349, 362 (S.D.N.Y. 1996)

(internal citations omitted). ³6XEVWDQWLDOHYLGHQFHLVPRUHWKDQDPHUHVFLQWLOODEXWVRPHWKLQJ

less than the weight of the evidence, and the substantial evidence standard may be met despite

the possibility of drawing two inconsistent conclusions from the evidence´Id. ³7KHFRXUWPXVW

FRQVLGHUWKHUHDVRQDEOHQHVVRI>WKH52¶V@DFWLRQEDVHGRQWKHUHFRUGLQH[LVWHQFHDWWKHWLPHRI

the decision; it will not engage in an evidentiary hearing or a de novo UHYLHZ´Boatmen v.

Gutierrez, 429 F. Supp. 2d 543, 548 (E.D.N.Y. 2006). ³,QFRQVLGHring a relevant question of law

. . . WKHUHYLHZLQJFRXUWDVNVZKHWKHUWKHDJHQF\¶VDFWLRQZDVµDUELWUDU\FDSULFLRXVDQDEXVHRI

GLVFUHWLRQRURWKHUZLVHQRWLQDFFRUGDQFHZLWKODZ¶´Dist. Council of New York City, 941 F.

Supp at 362.

4) Passero has acknowledged in writing that he took the actions identified by the RO

(i.e. engaging Tsakanikas and Union Solutions to work for Local Union 1556 and disseminating

personal union member information to Tsakanikas) without prior authori]DWLRQ³[I]n my zeal to

do what I felt was my fiduciary duty on behalf of the Members I represent, I by-passed

procedures. Whether I was duped into this situation or not, the responsibility must lay with me,

as President of the Local Union 1556[.] I accept this fact . . . I will stand by your decision,

whatever it may be. If there is a question of whether I . . . have not exercised properly the

fiduciary responsibility bestowed upon me by the membership, then I must say to you, that I




5

have never, I repeat never had any criminal intent to harm those Members I represent . . . It

bears repeating that I recognize and take responsibility for my mistakes . . . Clearly as you have

pointed out . . . I made some mistakes which may have placed some membership information to

unwarranted exposure . . . This is no excuse for overlooking or bypassing procedures. I submit

that the task at hand was larger than I expected, and I may have been overwhelmed. In the

process I failed to follow procedures . . . Let it be known that not one member of the Executive

Board ever volunteered to assist me in this task nor [were] they forthcoming in any type of

DVVLVWDQFH´3DVVHUR/HWWHU at 1 ± 2.)

At oral argument on June 4, 2013, Passero appeared to backtrack from his February 9,

2013 admissions. The following colloquy is illustrative:

7+(&2857 <RXZURWH ³, E\SDVVHG SURFHGXUHV´ <RX WKHQ JR RQ WR VD\

³>Z@hether I was duped into this situation or not, the responsibility must lay with

me as President of Local Union 1556. I DFFHSWWKLVIDFW´This is all what you

wrote, right?

PASSERO: Yes.

(+U¶J7U'DWHG-XQHDW 11:23 ± 12:3.)

THE COURT: But you wrote it that you did. Is it true or not true?

3$66(52,GRQ¶WWKLQNLW¶VWUXHQRZ

THE COURT: Oh, you wrote it buW\RXGRQ¶WWKLQNLW¶VWUXH

PASSERO: Now. Back then I wrote that based on an interview that I had with

the review officer in January.

THE COURT: So you told him incorrect information at the time?

PASSERO: I may have told him incorrect information, yeah.

THE COURT: But what did you mean when you said bypassed procedures?

PASSERO: If I bypassed procedures, show me some procedures I bypassed.




6

THE COURT: No, no, no. This is not for me to show . . . you wrote that and now

\RX¶UHWHOOLQJPHWKDWLWZDVQRt true.

PASSERO: I may have wrote that incorrectly, sir.

7+(&2857:HOOGLG\RXRUGLGQ¶W\RX"'LG\RXVD\WKDW")LUVWRIDOOLW¶VLQ

written form.

PASSERO: I wrote that.

THE COURT: Okay. And it was correct or not?

3$66(52,GRQ¶WWKLQNLW¶VFRrrect now.

THE COURT: Okay. And how is it not correct?

PASSERO: Because there is no written SURFHGXUHVRUJXLGHOLQHV WKDW ,¶ve ever found that say anything about doing this.

(Id. at 12:8 ± 13:10.)

THE COURT: :HOO \RX GLGQ¶W VD\ KHUH WKDW ³7KH UHYLHZ officer told me I

E\SDVVHG SURFHGXUHV´ You say ³,E\SDVVHGSURFHGXUHV ́ $QG WKHQ \RX VD\

³:KHWKHU,ZDVGXSHGLQWRWKHVLWXDWLRQRUQRWWKHUHVSRQVLELOLW\PXVWOD\ZLWK

PH´'R\RXDJUHHZLWKWKDWVWLOORUQRW"

PASSERO: Yeah, I still agree with thDW,¶PUHVSRQVLEOH

(Id. at 13:19 ± 13:25.)

5) Passero also stated that he sought and obtained approval to engage Tsakanikas

and Union Solutions after the fact, i.e., from the Executive Board at the meeting of September

2012 and from the membership at the General Meeting of October 2012. (Passero Appeal at 4.)

Tsakanikas and Union Solutions had begun working on the project in August of 2012. (Mitchell

Declaration ¶¶ 9, 11.)

6) 7KH52¶VUHPRYDORI3DVVHURDV3UHVLGHQWZDVVXSSRUWHGE\VXEVWDQWLDOHvidence.

For one thing, as noted, Passero conceded in writing that he ³ bypassed procedures´ and gave

7VDNDQLNDVFRQILGHQWLDOLQIRUPDWLRQZKLFK³PD\KDYHSODFHGsome membership information to




7

XQZDUUDQWHGH[SRVXUH´See infra, at 4 ± 6; see also Passero Letter at 2. Passero also

acknowledged that he entered into the agreement with Tsakanikas and Union Solutions without

prior Executive Board or membership approval. (Passero Appeal at 4.) Second, Mitchell

conducted an investigation for the RO which included a January 2, 2013 interview of Passero

DQGFRQFHUQHG3DVVHUR¶VGHDOLQJVZLWK8QLRQ6ROXWLRQVDQG7VDNDQLNDV. (Mitchell Declaration ¶

13.) It also included review and analysis of documents and records of Local Union 1556 and

Union Solutions and a review of Local Union 1556 meeting minutes. (Id.)

The 0LWFKHOO'HFODUDWLRQFRQFOXGHVDPRQJRWKHUWKLQJVWKDWL³RQRUDERXW$XJXVW

2012, Passero and Tsakanikas discussed Passero engaging Tsakanikas and Union Solutions to

build a computer program to assisW>/RFDO8QLRQ@LQLWVFROOHFWLRQRI>XQLRQPHPEHUV¶@

ZRUNLQJDVVHVVPHQWV´ZKLFKDUHXVHGWRSD\PHPEHUVFDVKEHQHILWVZKHQWKHPHPEHULV

unemployed (Mitchell Declaration LL³RQRUDERXW$XJXVW3DVVHURDJUHHGWR

engage UnioQ6ROXWLRQVWREHJLQZRUNRQWKH3URJUDPÍd. ¶ 9); (iii) Passero agreed to pay

Tsakanikas at an hourly rate of $125 with a maximum of $10,000 (Id.); (iv) on or about August

22, 2012, 3DVVHURWROG7VDNDQLNDV³WKDWSD\PHQWRIIHHVE\>/RFDO8QLRQ@LVcontingent

XSRQDSSURYDOE\WKH>/RFDO8QLRQ@H[HFXWLYHERDUGDQGPHPEHUVKLSÍdY³[i]n or

about late August 2012, Tsakanikas began to work on developing a new computer program for

>/RFDO8QLRQ@Íd. ¶ 11); (vi) in August 2012, Passero provided Tsakanikas with

LQGLYLGXDOILOHVIURPWKH/RFDO8QLRQ¶VFRPSXWHUV\VWHP³'$06´ZKLFKincluded

personal information of dockbuilder members of Local Union 1556, ³including, but not limited

WRQDPHDGGUHVVDQGVRFLDOVHFXULW\QXPEHU´DQGLQSeptember 2012, Passero provided

Tsakanikas with two additional computer files containing information about individual

dockbuilders (Id. ¶¶ 11 ± 12); (vii7VDNDQLNDVXSORDGHGILOHVFRQWDLQLQJGRFNEXLOGHUV¶SHUVRQDO




8

information to an online computer server maintained by Pace Software (Id. ¶ 10); (viii)

³7VDNDQLNDVKDGDFFHVVWRWKHILOHVRQWKHVHUYHUDQGGRZQORDGHGWKHPWRKLVFRPSXWHUKDUG

GULYH´DQGKH³VWLOOKDVWKHFRPSXWHUILOHVÍd.); and (ix³7VDNDQLNDVZDVQRWUHTXLUHGWRVLJQD

confidentiality aJUHHPHQW´SULor to receiving the personal individual member information that he

received. (Id. ¶ 11) Mitchell also concludes that: (x³>D@WQRWLPHGLG3DVVHURREWDLQSULRU

approval of the Executive Board and membership of [Local Union] 1556 to provide personal

LQIRUPDWLRQRIGRFNEXLOGHUPHPEHUVWR7VDNDQLNDVRUDQ\RQHHOVHÍd. ¶ 15); (xi) in a

-DQXDU\LQWHUYLHZ³3DVVHURDGPLWWHGWKDWKHSURYLGHG7VDNDQLNDVWKUHHFRPSXWHUILOHV

. that . . . included personal information of dockbuilder VLQFOXGLQJVRFLDOVHFXULW\QXPEHUVÍd. ¶

13); and (xii3DVVHURDOVRDGPLWWHGWKDWKHSURYLGHGWKLVLQIRUPDWLRQ³WR7VDNDQLNDVZLWKRXW

appropriate safeguards and the approval of the executive board and membership of [Local

8QLRQ@Íd. ¶ 7.)

7) 3DVVHUR¶Vcontention WKDW0LWFKHOO¶V'HFODUDWLRQFUHDWHG³IDOVHLPSUHVVLRQV

OHDGLQJWRWKHGHFLVLRQRI>:DOVK@´WRYHWR3DVVHURDVSUHVLGHQWRI/RFDO8QLRQLV

unpersuasive. 3DVVHUR$SSHDODW3DVVHUR¶Vcontention that his engagement of Tsakanikas

DQG8QLRQ6ROXWLRQVZDVDSSURYHG³E\WKH([HFXWLYH%RDUGRQWKH0HHWLQJRI6HSWHPEHU

DQGDSSURYHGDWWKH*HQHUDO0HHWLQJRI2FWREHU´GRHVQRWUHEXWWKH52¶Vargument that

prior approval was not sought or obtained. (Rohde Letter at 4.) Likewise, 3DVVHUR¶V assertion

that he engaged a computer consultant to facilitate the 2% working assessment project without

KDYLQJEHHQ³JLYHQDQ\FOHDULQVWUXFWLRQ E\WKH5HYLHZ2IILFHU>¶]s Office on how this should

EHDFFRPSOLVKHG´3DVVHUR$SSHDODW does not DGGUHVVWKH52¶VILQGLQJVi.e. that Passero

³ proceed[ed] to give sensitive personal information to a vendor without proper safeguards and

without the knowledge and approval of the Local¶V ([HFXWLYH%RDUGDQGPHPEHUVKLS´Rohde




9

Letter at 3.) That a confidentially agreement for Local Union 1556 was allegedly signed and

returned by Tsakanikas on October 26, 2012, similarly, does not rebut the fact that private,

personal information regarding union members was disclosed without prior approval and/or

appropriate safeguards. (Id. at 3 ±³3DVVDURKDGUHWDLQHG0U7VDNDQLDVLVE\$XJXVWDQG

supplied the sensitive personal data, prior to the September 25 meeting of the Executive

%RDUG´ 3DVVHUR¶VFRQWHQWLRQWKDWKLVhanding over of sensitive personal information to Mr.

Tsakanasis falls under an April 2011 confidentiality agreement between the UBC and Union

Solutions is unpersuasive because that confidentiality agreement is for a specific (different)

project. (See Passero Appeal, Ex. 4 (Vendor Confidentiality Agreement between Union

Solutions and UBC, dated April 11, 2011 (³>8QLRQ6ROXWLRQV@LVSODQQLQJWRZRUNZLWKWKH

>8%&@WRSURYLGHIHDVLELOLW\DQDO\VHVUHODWHGWRLWVVRIWZDUHSURGXFWV )́).) Passero concedes that

³>W@KH2IILFHRI5HYLHZ2IILFHU¶V>VLF@DGYLVHGPH/RFDO8QLRQVKRXOGKDYHDVHSDUDWH

FRQILGHQWLDOLW\DJUHHPHQW´Passero Appeal at $QG3DVVHUR¶VDUJXPHQWWKDWKHGLGQRWgive

to Tsakanikas two additional files in September 2012 and that the files did not contain member V¶

dates of birth, addresses or telephone numbers is unpersuasive. (Id.) Walsh reasonably

FRQFOXGHGWKDW3DVVHURGLVFORVHG³FRQILGHQWLDOSHUVRQDOLGHQWLILFDWLRQLQIRUPDWLRQRIPHPEHUVRI

Local 1556, including social security numbers.´ (Notice of Veto at 1; Mitchell Declaration ¶

13.)

8) 7KH52¶VGHFLVLRQWRYHWR3DVVHURas President was not arbitrary or capricious.

The RO afforded Passero appropriate and legally sufficient notice and opportunity to contest his

Notice of Possible Action. United States v. Dist. Council of New York City, No. 90 Civ. 5722,




10

2010 WL 5297747, at *5 (S.D.N.Y. Dec. 21, 2010).5

He was sent the Notice of Possible Action

by Walsh on January 31, 2013 which included the charges against him and which advised

3DVVHURWKDWKHFRXOG³GHliver a written submission . . . stating any facts, law or arguments (and

appending any exhibits) which might be . . . relevant to consideration of the mattHU´1RWLFHRI

Possible Action at 1.) The Notice of Possible Action also stated that Passero may appear in the

52¶VRIILFHWRGLVFXVVKLVVXEPLVVLRQDQGDVNTXHVWLRQVDERXWWKHFDVH(Id.)

Passero appears to have availed himself of the opportunity to respond to the Notice of

Possible Action by submitting the two-page letter to Walsh, dated February 9, 2013.6

(Passero

Letter.) At the Court conference on May 22, 2013, the RO stated that he had met with Passero

DQGWKDWWKH52KDV³HPEUDFHGHYHU\TXHVWLRQWKDW>3DVVHUR@KDVHYHUSRVHG>DQG@DQVZHUHG

all of his emails when he was the President oI/RFDO>8QLRQ@´+U¶JTr., dated May 22,

2013, at 5:1 ± 4); see Dist. Council of New York City, 2010 WL 5297747, at *6; United States v.

Mason Tenders Dist. Council, No. 94 Civ. 6487, 1998 WL 23214, at *7 (S.D.N.Y. Jan. 13,

1998).

5 $VSDUWRI0LWFKHOO¶VLnvestigation, Passero was interviewed on January 2, 2013 and

given the opportunity to present his version of events. (Mitchell Declaration ¶ 13.)

6 At the June 4, 2013 conference, the Court inquired as to whether Passero had retained

counsel.

THE COURT: And so Mr. Passero, the submissions so far seem to be what we

call pro se submissions. That is to say, you have not retained an attorney in this

matter?

3$66(521RWKDW¶VLW

THE COURT: Is that correct?

PASSERO: Yes.

(+U¶J7U'DWHG-XQH at 2:9 ± 14.)




11

9) 7KH52¶VGHFLVLRn WKDW³3DVVHURDFWHGFRQWUDU\WRKLVILGXFLDU\UHVSRQVLELOLW\WR

Local 1556 members, and inconsistently with the objectives of the Stipulation and Order,´was

not arbitrary or capricious and was consistent with applicable law. (Rohde Letter at 2; Stip. &

Order ¶¶ 5.b.iii.d ± e.) First, 3DVVHUR¶V conduct LQUHOHDVLQJXQLRQPHPEHUV¶SHUVRQDOLQIRUPDWLRQ

(social security numbers) was at the very least grossly negligent. See Jones v. Commerce

Bancorp., Inc., No. 06 Civ. 835, 2006 WL 1409492, at *2 ± 3 (S.D.N.Y. May 23, 2006) (where

³DOOHJDWLRQV[were] VXIILFLHQWWRHVWDEOLVKDGXW\E\>'HIHQGDQW%DQN@WRSURWHFWSODLQWLII¶V

personal information´); Stacey v. HRB Tax Group, Inc., No. 11-2012, 2013 WL 811818, at *1 ± 2

WK&LU0DUZKHUHGHIHQGDQW³owed a duty of cDUHWRVDIHJXDUGWKHSODLQWLIIV¶

confidential identifying information . . . because of [a] special relationship´Bell v. Mich.

Council 25 of Am. Fed'n of State, Cnty., and Mun. Emps., No. 246684, 2005 WL 356306, at *5

(Mich. Ct. App. Feb. 15, 2005) (where ³GHIHQGDQW>XQLRQ@NQHZFRQILGHQWLDO[personal]

information [of union members] was leaving its premises and no procedures were in place to

HQVXUHWKHVHFXULW\RIWKHLQIRUPDWLRQ´; see also N.Y. Gen. Bus. Law § 399 ± ddd(4) (McKinney

³Any person . . . having possession of the social security account number of any

individual shall . . . provide safeguards necessary or appropriate to preclude unauthorized access

to the social security account number and to protect the confidentiality of such number.´.

Union officers ³owe an enhanced duty of care to their membership.´ United States v.

,QW¶O%KGRf Teamsters, 761 F. Supp. 315, 319 (S.D.N.Y. 1991). 3DVVHUR¶VHQJDJHPHQWRI

Tsakanikas and Union Solutions without prior approval and his disclosure of personal, individual

information (social security numbers) without prior approval or safeguards by the Executive

Board or the union membership was violative of the UBC Constitution provision against

³>I@XUQLVKLQJWRDQ\XQDXWKRUL]HGSHUVRQZLWKRXWthe consent of the Local Union, a list of the




12

membership´ and its UHTXLUHPHQWWKDW³>D@OOPRQLHVSDLGRXWRIWKHIXQGVRID/RFDO8QLRQEH

by majority vote of the members present´Constitution of the United Brotherhood of Carpenters

and Joiners of America (2006) §§ 51(7), 54(d). The engagement of Tsakanikas and release of

personal information to him without prior approval constitute DEUHDFKRI3DVVHUR¶VILGXFLDU\

duty. See Section 501(a) of the Labor-Management Reporting and Disclosure Act, 29 U.S.C.

§ D³/05'$´SURYLGLQJthat it is the duty RIDQRIILFHURIDODERURUJDQL]DWLRQ³to

manage, invest, and expend the >RUJDQL]DWLRQ¶VPRQH\@in accordance with its constitution and

bylaws and any resolutions of the governing bodies adopted thereunder ´; see also Guzman

v. Bevona, 90 F.3d 641, 648 (2d Cir. 1996) ³7KHRIILFHUV¶DFWVYLRODWHGWKH8QLRQ¶V

&RQVWLWXWLRQVDQGWKXVZHUHXQDXWKRUL]HGH[SHQGLWXUHVRIWKH8QLRQ¶VPRQH\DQGSURSHUW\LQ

EUHDFKRIWKHRIILFHUV¶ILGXFLDU\GXWLHV´); Farrington v. Benjamin, 468 F. Supp. 343, 350 (E.D.

0LFKSUHVLGHQWRIORFDOXQLRQ¶VIDLOXUHWRVHFXUHSULRUDSSURYDOIURPWhe executive board

before authorizing disbursement of union funds is a breach of fiduciary duty, notwithstanding

³>V@XEVHTXHQWUDWLILFDWLRQE\WKH([HFXWLYH%RDUG´6HUYV(PSV,QW¶O8QLRQY1DW¶O8QLRQRI

Healthcare Workers, No. 10-16549, 2013 WL 2230726, at *6 (9th Cir. May 22, 2013).

3DVVHUR¶Vdisclosure to Tsakanikas of confidential personal identification information

about members of Local Union 1556, including social security numbers, without safeguards or

prior approval was contrary to his fiduciary responsibility to Local Union 1556 members. (See

Rhode Letter at 1); 8QLWHG6WDWHVY,QW¶O%KGRf Teamsters, 652 F. Supp. 2d. 447, 452 (S.D.N.Y.

2009) DXQLRQRIILFHULV³ bound to servHWKHPHPEHUVKLS¶VLQWHUHVW´As Local Union

President, Passero was a fiduciary. ,QW¶O%KGRf Teamsters, 652 F. Supp. 2d. at 452. He enjoyed

³WKHtrust of the general membership,´ and waVREOLJDWHGWRVDIHJXDUGPHPEHUV¶Vensitive

personal information. Id.; Bell, 2005 WL 356306, at *3. He was bound WRDFW³with the highest




13

degree of honesty and loyalty toward [union members] and in the best interests of the [union

PHPEHUV@´ which he neglected to do. United States v. Coffey, 361 F. Supp. 2d 102, 123

(E.D.N.Y. 2005) (citation omitted); see Bell, 2005 WL 356306, at *3 (³$SHUVRQLQDILGXFLDU\

relationship to another is under a duty to act for the benefit of the other as to matters within the

scope of the relationship . . . It follows that part and parcel of th[e] relationship is a responsibility

to safeguard PHPEHUV¶SULYDWHLQIRUPDWLRQ$QGsociety has a right to expect that personal

information divulged in confidence, especially to an organization such as a union whose

existence is for the benefit of the union members, will be guarded with the utmost care.´); see

also Jones, 2006 WL 1409492, at *3 (where bank client ³ZDVHQWLWOHGWRUHO\RQ> bank ¶V@VXSHULRU

expertise to safeguard her persoQDOFRQILGHQWLDOLQIRUPDWLRQ´Daly v. Metro. Life Ins. Co., 782

N.Y.S.2d 530, 532 (Sup. Ct. N.Y. Cnty. 2004); Shames-Yeakel v. Citizens Fin. Bank, 677 F.

Supp. 2d. 994, 1008 (N.D. Ill. 2009) ³$QXPEHURIFRXUWVKDYHUHFRJQL]HGWKDWILGXFLDU\

inVWLWXWLRQVKDYHDFRPPRQODZGXW\WRSURWHFWWKHLUPHPEHUV¶RUFXVWRPHUV¶FRQILGHQWLDO

LQIRUPDWLRQDJDLQVWLGHQWLW\WKHIW´ (citing Jones, 2006 WL 1409492, at *2; Bell, 2005 WL

356306, at *1).

3DVVHUR¶Vdisclosure to Tsakanasis of PHPEHUV¶social security numbers was inconsistent

with the objectives of the Stipulation and Order to ensure that the affairs of the District Council

are managed to support the welfare and best interest of the members (and to eradicate corruption

and racketeering). See Bell, 2005 WL 356306, at *5 (³>$@VSHFLDOUHODWLRQVKLSGLGH[LVWEHWZHHQ

[union] defendant and [union member] plaintiffs such that defendant did owe plaintiffs a duty to

protect them . . . by providing some safeguards to ensure the security of their most essential

confiGHQWLDOLGHQWLI\LQJLQIRUPDWLRQ )́; see also United 6WDWHVY,QW¶O%KGRf Teamsters, 970 F.




2d 1132,1137 (2d Cir. 1992); InrI Bhd. of Teamsters, 652 F. Supp. 2d. at 452 ("[A]n officer's

fiduciary duty [is not] satisfied through passivity and willful ignorance.,,).7

10) The decision to veto Passero as President of Local Union 1556 was within the

RO's broad mandate and authority. (Stip. & Order at 3 ("[T]he presence and activity of an

independent court-appointed officer. . . are essential to the eradication of corruption and

racketeering as they affect union carpenters and union employers.").) The RO has broad

authority to investigate allegations of wrongdoing by officers, members and trustees and to

review and veto persons currently holding office or employment. (Stip. & Order 5.a, 5.bj,

iii); see also Dist. Council of New York City, 2012 WL 5236577, at *5; Inri Bhd. Of Teamsters,

970 F. 2d at 1137 (The Court "must give 'great deference' to the decisions of' a court-appointed

officer.); Dist. Council of New York City, 2010 WL 5297747, at *8 (The RO's powers are

"broad and should be so construed.").

Conclusion & Order

For the foregoing reasons, Passero's Appeal [#1268] is denied.

Dated: New York, New York

June 5, 2013

RICHARD M. BERMAN, U.S.D.J.

Passero's engagement of Union Solutions and Tsakanikas without prior approval for a

project involving review of sensitive information ofunion members appears also to have violated

the provision of the Stipulation and Order which states: "[t]he Review Officer must be given

prior notice of, and is granted the authority to review, all expenditures and investments . . . [and]

all contracts or proposed contracts on behalf of the District Council." (Stip. & Order 5.bJ.)

14


decision and order regarding passero 6.5.13

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