Gould v. Bond, No. 19-3200 (8th Cir. 2021)Annotate this Case
Gould was appointed as a business agent for the Carpenters Regional Council by the Executive Secretary-Treasurer (EST). Gould began complaining of financial and administrative waste in 2008. The EST removed Gould. Gould sued, asserting wrongful termination. Gould received voluminous Council documents in discovery and, in a letter to the EST, outlined alleged financial improprieties and breaches of fiduciary duties. The Council hired the Calibre accounting firm to perform an audit and invited Gould to assist in the investigation. Gould questioned Calibre’s independence but agreed to provide documents.
Gould subsequently sought to amend his state court suit to add Labor Code breach of fiduciary duty counts against the EST, 29 U.S.C. 501(b). The Council declared that the EST’s approval of expenditures was outside the scope of Gould’s demand letter and therefore “Calibre was not asked to investigate” The state court denied Gould leave to add the claims. The documents Gould provided were never forwarded by the Council's attorney to Calibre. The audit concluded that the Council’s expense reimbursement policy was sound.
The Eighth Circuit affirmed the denial of Gould’s motion for leave to file a federal complaint under 29 U.S.C. 501(b) against the EST. A union member who files a Section 501(b) lawsuit after a union has taken action in response to the member’s request should show an objectively reasonable ground for belief that the union’s accounting or other action was not legitimate. Gould failed to make the necessary showing and failed to meet the condition precedent of a timely and appropriate request to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time.