Federal judge issues order in Boilermakers case, but control of union still unclear
The issue of who is running the Boilermakers union got even murkier Tuesday.
A day after International President Newton B. Jones — who was ousted in June by his top executives — announced he had resigned and appointed a successor, a federal judge denied the executives’ June 15 motion for an injunction upholding their decision to remove him.
Chief Judge Eric F. Melgren, of the U.S. District Court for the District of Kansas, ruled that the executives had not met the high burden of proof necessary for the injunction to be granted. But Melgren also said that Jones’ appointment of a successor violated the order he issued at a June 20 hearing that the union remain in status quo until the matter was resolved.
“The Court learned only this morning that Jones has resigned as International President,” Melgren wrote in his order. “However, as a part of his resignation he has unilaterally named a successor International President — Cory Channon — ‘for the balance of my elected term of office.’”
Melgren called Jones’ action “highly suspect” and said it went against his June order “to essentially ‘freeze’ the situation until proper resolution of the parties’ claims.”
“Likewise, Jones’ payment of over a half million dollars of allegedly unused vacation time to himself, his wife, and Secretary Treasurer William Creeden — who is aligned with Jones in this dispute — is also of questionable validity and in violation of the Court’s injunction,” Melgren said in Tuesday’s order.
The judge was referring to a July 25 filing by the union executives that said Jones, his wife, Kateryna, and Creeden had recently been paid $500,000 “for purported unused vacation.”
After Jones’ retirement announcement Monday, the union executives filed a new motion asking that their request for an injunction be converted into a motion for summary judgment, which would end the case before it went to trial.
But Melgren said Tuesday that such a process was unworkable, “not only because different elements apply to such a motion — elements which have not been briefed nor responded to — but also because different issues have now arisen; principally payment of allegedly unused vacation time (and) appointment of an interim International President.”
However, he added, “the parties have demonstrated an unusual capacity for mischief, leading the Court to determine that time is of the essence.”
Because of that, Melgren ordered the parties that wanted to file motions for summary judgment to do so by Aug. 7 and said a hearing on any such motions would take place Aug. 15.
The battle over control of the Kansas City, Kansas-based union erupted when members of the executive council voted June 2 to remove Jones as the international president, alleging he had misused union funds for personal gain, including funneling hundreds of thousands of dollars to his Ukrainian wife for work she never performed.
The executive council found that Jones ordered the union to give Kateryna Jones more than $100,000 plus benefits in back pay “for apparently no union purpose while she was living in the Ukraine” and spent more than $20,000 in union funds for flights to Ukraine “to visit his wife and to go to the home which he owns in the Ukraine.”
Jones and his wife also turned in about $40,000 in receipts for meals for them and other family members when at their home in North Carolina — some “quite lavish and expensive” — with no justification for the expenses, the executive council found.
Jones has denied any wrongdoing and said the executive council had no authority under the union’s constitution to dismiss him.
The case ended up in federal court after the union filed a civil suit against the executives who ousted him, requesting a temporary restraining order and then an injunction to prohibit Jones’ removal. Though the lawsuit was filed by the union, many members say it doesn’t represent their feelings and they want no part of it.
The union executives fought back, filing a counterclaim against Jones, his wife and Creeden. They asked the court for a temporary restraining order followed by an injunction enforcing their decision to remove Jones.
The counterclaim alleged that Jones misappropriated hundreds of thousands of dollars from the union and its members. But instead of putting a stop to the practice, it said, Creeden authorized the transactions. And because four of the union’s five top executives had participated in the internal disciplinary process that led to Jones’ ouster, they said, Jones had “engaged in a campaign of retaliation” against them.
At a June 20 hearing, Melgren ordered a stay of the executive council’s actions to remove Jones and the council’s decision to elect retired international vice president Warren Fairley to replace him.
But Melgren also ordered that any efforts to remove the executive council members from office for expelling Jones be stopped. And he said that Jones’ action to remove them from other appointments, such as committees and trust funds, would be stayed, saying it was clearly done in retaliation for the officers ousting him.
In addition, Melgren ordered Jones not to use his union credit cards and restricted him from traveling internationally except to Canada — and then only for business purposes. Melgren also ruled that if Jones incurred business expenses that he believed were reimbursable, he had to justify those expenses to the executive council’s satisfaction prior to reimbursement. The judge said the executive council must “exercise good faith” in allowing reimbursement of legitimate business expenses.
A followup hearing in the case was held in federal court last week. Melgren did not issue a ruling at the time, saying he needed to study the case further. But the judge said he would keep in place the “preventative measures” he ordered in June.
In Tuesday’s ruling, Melgren said those measures would remain in effect.
This story was originally published August 1, 2023 at 6:35 PM.
