Sixth Circuit Rejects Union Trustees’ Bid to Oust Fellow Trustees in ERISA Fiduciary Dispute Over Taft-Hartley Fund Governance

In Int’l Union of Painters & Allied Trades Dist. Council No. 6 v. Smith, No. 24-3282, —F.4th—-, 2025 WL 2170424 (6th Cir. July 31, 2025), the Sixth Circuit affirmed a district court’s denial of injunctive relief and dismissal of certain ERISA claims brought by a union and its trustees against co-trustees on a Taft-Hartley health and welfare fund. The case involved allegations of fiduciary breaches stemming from internal board disputes, amendments to trust documents, and alleged “entrenchment” of two union-appointed trustees.

The Southern Ohio Painters Health and Welfare Plan is a Taft-Hartley, multi-employer ERISA fund jointly managed by 16 trustees, evenly split between union and employer representatives. Tensions erupted when two union-appointed trustees—Warren “Tom” Smith and Dana Clark—sided with employer-appointed trustees on a series of controversial amendments to the Fund’s Trust Agreement. These included changes affecting trustee removal procedures and expanded benefits for certain retired trustees—benefits from which Smith and Clark stood to gain.

The remaining union-appointed trustees and the International Union of Painters and Allied Trades District Council No. 6 (“the Union”)—led by Business Manager/Secretary-Treasurer Jim Sherwood—sought to remove Smith and Clark. When efforts to expel them under internal union procedures failed, Sherwood pursued formal charges under the union constitution. Although union trial boards ruled for removal, Smith and Clark refused to step down. They later resigned from the Union altogether but remained Fund trustees due to recently approved amendments that allowed non-union retirees to serve in that role.

Sherwood and his fellow plaintiffs filed suit, alleging violations of ERISA’s fiduciary duty provisions (29 U.S.C. § 1104 and § 1106), unlawful entrenchment, and misuse of Fund assets. They sought, among other relief, a preliminary injunction removing Smith and Clark, terminating their Fund employment, and barring payment of their legal fees with Fund resources.

The district court dismissed the claims against the employer-appointed trustees for failure to state a claim and denied the plaintiffs’ motion for preliminary injunction. On appeal, the Sixth Circuit reviewed both rulings but ultimately affirmed on all fronts.

The court began by addressing the denial of preliminary injunctive relief. Applying the traditional four-factor test, the court focused on the plaintiffs’ failure to show irreparable harm—a necessary element for an injunction. The plaintiffs argued three categories of irreparable harm: (1) trustee self-dealing, (2) the inability of union trustees to fulfill fiduciary duties, and (3) structural entrenchment of Smith and Clark. However, the court found these harms either too speculative or monetary in nature—and thus compensable post-litigation. Notably, the plaintiffs failed to identify any imminent votes or actions that would concretely harm the Fund or its beneficiaries during the suit’s pendency.

While the plaintiffs asserted that Smith had proposed harmful policies in the past, the court emphasized that “past harm allows a plaintiff to seek damages, but it does not entitle a plaintiff to seek injunctive … relief.” The plaintiffs offered no compelling evidence that similar conduct was likely to recur in a way that would warrant court intervention before trial. As for the claim that entrenchment itself constituted irreparable harm, the court was unconvinced. The plaintiffs cited out-of-circuit cases suggesting that trustees who defy their appointing authorities jeopardize Taft-Hartley fund governance. But the Sixth Circuit noted it had never recognized such a principle as a basis for automatic injunctive relief. Without proof of “certain and immediate” harm, even alleged breaches of fiduciary duty could not justify an injunction.

The court then turned to the plaintiffs’ challenge to the district court’s dismissal of their claims against the employer-appointed trustees. Because claims against Smith and Clark remained pending, the Court found that the dismissal order was not a final appealable decision. Nor did the Court find it appropriate to exercise pendent jurisdiction, as the issues on appeal were not “inextricably intertwined” with the preliminary injunction ruling. Thus, the employer trustees’ dismissal stood, and the Court declined to reach the sufficiency of the plaintiffs’ claims under ERISA § 404. For these reasons, the court affirmed the decision of the district court.