Flashcards Studio

A local union’s by‑laws require two officer signatures for withdrawals and that expenditures beyond the annual budget must be approved by the General Membership. For nine months, the Treasurer, with the President’s tacit consent, transfers funds from the Union Welfare Fund to a private company controlled by the Treasurer, which operates a "Union Development Center" offering training and consultancy services to members. The transfers were not budgeted and were not disclosed to the General Assembly. The union’s auditor detects irregular withdrawals and a fund shortfall. Members file a complaint alleging breach of fiduciary duty by the Treasurer (and aiding and abetting by the President). (a)Identify the controlling doctrine governing the management and use of union funds by union officers. (b)Distinguish between authorized union expenditures and misappropriation and apply the doctrine to the facts to determine whether the Treasurer and President committed a breach of fiduciary duty. (c)If a breach is found, what remedies and liabilities may attach to the officers and to the union?