Can trustees alter trust document in regard to selecting and removing trustees?

[Guest steward]

Can the trustees of a Taft Hartley trust alter the trust document to prevent the employer and the union from removing and/or choosing trustees?

[Bill Ecklund]

Can the trustees of a Taft Hartley trust alter the trust document to prevent the employer and the union from removing and/or choosing trustees?

The trust document will have a provision in it as to how it is amended. Sometimes the trustees are able to amend the trust agreement and sometimes that authority is left to the settlors. You need to look at the trust document. The trust agreement, however, has to have a provision for the appointment and removal of trustees (See ERISA section 403). Generally the employer(s) (or association) that is one of the sponsors will appoint the management trustees and the union (the other sponsor) will appoint the union trustees. There can be restrictions put into the agreement as to qualifications to be a trustee. For example some trust agreements require that a managment trustee has to be an employee or principal of a contributing employer. Trustees cannot be appointed for life and ERISA section 411 provides other restrictions.

[Guest steward]

Can the trustees of a Taft Hartley trust alter the trust document to prevent the employer and the union from removing and/or choosing trustees?

The trust document will have a provision in it as to how it is amended. Sometimes the trustees are able to amend the trust agreement and sometimes that authority is left to the settlors. You need to look at the trust document. The trust agreement, however, has to have a provision for the appointment and removal of trustees (See ERISA section 403). Generally the employer(s) (or association) that is one of the sponsors will appoint the management trustees and the union (the other sponsor) will appoint the union trustees. There can be restrictions put into the agreement as to qualifications to be a trustee. For example some trust agreements require that a managment trustee has to be an employee or principal of a contributing employer. Trustees cannot be appointed for life and ERISA section 411 provides other restrictions.

The original document had the union and employer choosing their own trustees. The trustees themselves changed the document and gave themselves the sole power to appoint and remove.

[Bill Ecklund]

Can the trustees of a Taft Hartley trust alter the trust document to prevent the employer and the union from removing and/or choosing trustees?

The trust document will have a provision in it as to how it is amended. Sometimes the trustees are able to amend the trust agreement and sometimes that authority is left to the settlors. You need to look at the trust document. The trust agreement, however, has to have a provision for the appointment and removal of trustees (See ERISA section 403). Generally the employer(s) (or association) that is one of the sponsors will appoint the management trustees and the union (the other sponsor) will appoint the union trustees. There can be restrictions put into the agreement as to qualifications to be a trustee. For example some trust agreements require that a managment trustee has to be an employee or principal of a contributing employer. Trustees cannot be appointed for life and ERISA section 411 provides other restrictions.

The original document had the union and employer choosing their own trustees. The trustees themselves changed the document and gave themselves the sole power to appoint and remove.

If they had the power to amend the trust agreement, then that provision is valid. Some of the trusts that I represent have a provision that the union appoints the union trustees and the employer trustees select successor employer trustees. That will generally happen when there is not an employer assoication to select the employer trustees, and it is too cumbersome to have a trustee election by the contributing employers.

[Guest steward]

Can the trustees of a Taft Hartley trust alter the trust document to prevent the employer and the union from removing and/or choosing trustees?

The trust document will have a provision in it as to how it is amended. Sometimes the trustees are able to amend the trust agreement and sometimes that authority is left to the settlors. You need to look at the trust document. The trust agreement, however, has to have a provision for the appointment and removal of trustees (See ERISA section 403). Generally the employer(s) (or association) that is one of the sponsors will appoint the management trustees and the union (the other sponsor) will appoint the union trustees. There can be restrictions put into the agreement as to qualifications to be a trustee. For example some trust agreements require that a managment trustee has to be an employee or principal of a contributing employer. Trustees cannot be appointed for life and ERISA section 411 provides other restrictions.

The original document had the union and employer choosing their own trustees. The trustees themselves changed the document and gave themselves the sole power to appoint and remove.

If they had the power to amend the trust agreement, then that provision is valid. Some of the trusts that I represent have a provision that the union appoints the union trustees and the employer trustees select successor employer trustees. That will generally happen when there is not an employer assoication to select the employer trustees, and it is too cumbersome to have a trustee election by the contributing employers.

The original trust document says the trustees can amend the agreement but does not specify that they can change the trustees.

[Bill Ecklund]

Can the trustees of a Taft Hartley trust alter the trust document to prevent the employer and the union from removing and/or choosing trustees?

The trust document will have a provision in it as to how it is amended. Sometimes the trustees are able to amend the trust agreement and sometimes that authority is left to the settlors. You need to look at the trust document. The trust agreement, however, has to have a provision for the appointment and removal of trustees (See ERISA section 403). Generally the employer(s) (or association) that is one of the sponsors will appoint the management trustees and the union (the other sponsor) will appoint the union trustees. There can be restrictions put into the agreement as to qualifications to be a trustee. For example some trust agreements require that a managment trustee has to be an employee or principal of a contributing employer. Trustees cannot be appointed for life and ERISA section 411 provides other restrictions.

The original document had the union and employer choosing their own trustees. The trustees themselves changed the document and gave themselves the sole power to appoint and remove.

If they had the power to amend the trust agreement, then that provision is valid. Some of the trusts that I represent have a provision that the union appoints the union trustees and the employer trustees select successor employer trustees. That will generally happen when there is not an employer assoication to select the employer trustees, and it is too cumbersome to have a trustee election by the contributing employers.

The original trust document says the trustees can amend the agreement but does not specify that they can change the trustees.

If there are no restrictions in the amendment clause of the T/A or there are no other prohibitions in the T/A relative to appointment of trustees, then they have the power to do that. There is nothing in ERISA that would prohibit that.

[Guest Brian4]

Recently there was a ruling in a case about this issue. The trustees amended the trust document to give themselves the power to appoint and remove. This Court ruled against this change.

United Healthcare Workers-West, et al. v. John Borsos, ...

U.S. District Court for the Northern District of California