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Former CTU vice president Ted Dallas to get another $100,000 in court case because Marilyn Stewart's leadership team has violated a confidentiality agreement, judge rules

George N. Schmidt - April 12, 2010

A Cook County Circuit Court judge has ruled that the Chicago Teachers Union violated a confidentiality agreement entered into between the CTU and former CTU vice-president Ted Dallas, resulting in additional money the union has to pay Dallas. Judge Dorothy Kirie Kinnaird issued a seven-page Order [reprinted below] dated March 30, 2010, that the CTU pay Dallas an additional $100,000 above what he has already received under a confidential settlement he reached with the union.

The settlement was arrived at following Dallas's removal from union membership by CTU President Marilyn Stewart and her Executive Board nearly two years ago. After Stewart ruled that Dallas had been stripped of his union membership and was therefore not entitled to serve as the union's elected vice president, Dallas sued the union for what he would have been paid for the remainder of his term of office.

Stewart and Dallas had been re-elected to their offices as part of the United Progressive Caucus (UPC) slate in the May 2007 election, but by one year after the election Stewart had convened the union's executive board as a trial committee to oust Dallas from the union. Although the Settlement Agreement was confidential, it has now become public, in part. Part of the Agreement was that Dallas would be eligible to serve in an appointed office at the CTU after May 2010, and that his right to be a union member would be restored in January 2011, according to the Order issued by Judge Kinnaird on March 30, 2010. The amount of money the CTU paid Dallas under the Settlement Agreement is still secret.

Chicago Teachers Union President Marilyn Stewart (above right) authorized entering into a settlement agreement that reportedly paid former CTU vice president Ted Dallas the remainder of his salary and benefits following Stewart's decision in late 2007 to have her executive board strip Dallas of his union membership and attempt to kick him out of the office to which he had been re-elected in May 2007. Although the contents of the agreement between the union and Dallas were secret by mutual agreement, one of the terms of the agreement was that the union would not besmirch Dallas's reputation. Following the publication in the Chicago Union Teacher of two articles negatively reporting on Dallas, a Cook County Judge has ruled that the union has to pay Dallas an additional $100,000 in what are called "liquidated damages." With Stewart above are CTU Chief of Staff John Ostenburg (left) and Communications Director Rosemaria Genova (center). Ostenburg wrote one of the articles that appeared in the union newspaper that the judge held to have violated the Settlement Agreement. Substance photo by George N. Schmidt. The unusual award ordered by Judge Kinnaird may exceed $150,000. The CTU attorney has told the judge it will appeal the case and is thus liable for Dallas's attorneys' fees and possibly additional damages, since the Settlement Agreement makes the $100,000 the minimum and a jury may hold for a higher amount.. The CTU told the court it will demand a jury trial. If it takes the case to a jury trial, additional damages may be awarded to Dallas. The parties are due back in court on April 15.

The $100,000 (and attorneys' fees), which is now to be paid to Dallas is on top of a still secret amount he received under his original settlement. The March 30 Judge's Order came as a result of the publication in the CTU's official newspaper of at least two articles which the judge has ruled violated the once secret agreement reached between Dallas and the union. Among other things, the union agreed that the union would not undermine Dallas's good name. The agreement, which was secret until March 30 of this year, was arrived at by the union and Dallas after Dallas sued the union for his pay and benefits for the remainder of his term of office. Dallas's lawsuit came following the unprecedented and highly controversial decision by CTU President Stewart to have the CTU executive board strip Dallas of his union membership without consulting or submitting the issue to the union's House of Delegates or the membership. The executive board consists almost completely of members of Stewart's United Progressive Caucus. Union members, including this reporter, were barred from the union offices during the secret trial held during the summer of 2008.

The legal tangle was not reported to the union's House of Delegates on April 7, 2010, despite the fact that it was known to top union officials, who had approved the risky decision to appeal the judge's decision. Additionally, the union's leaders have continued to apparently violate the Judge's Order by approving the distribution of a leaflet by their supporters in the union's United Progressive Caucus which implies that Dallas and Linda Porter, the CTU treasurer, have been found guilty of a crime. Above, the anonymous leaflet being distributed by Mairlyn Stewart's supporters in the Chicago Teachers Union's United Progressive Caucus at union meetings for several months. The leaflet, which does not reveal its origins, implies that Linda Porter and Ted Dallas were 'Guilty' of a crime when in fact the issue discussed in the leaflet was an internal dispute within the UPC. No one in the union leadership stopped Stewart's supporters from distributing the document, even though it was an apparent violation of a confidentiality agreement the union's attorneys had entered into with Dallas when he settled his lawsuit against the union to receive the pay and benefits for his full term in office.

While Chicago Teachers Union President Marilyn Stewart was beginning the union's April 7, 2010, House of Delegates meeting, several members of Stewart's political party, the United Progressive Caucus, were standing out in front of the union hall distributing two leaflets. One was the official UPC leaflet, four colors, as usual attacking all of Stewart's opponents. But underneath the official UPC leaflet was a second leaflet, with no attribution, attacking Stewart's former running mate (ousted CTU Vice President Ted Dallas). The second leaflet, headlined 'GUILTY', was implying that Dallas — and CTU Treasurer Linda Porter — were criminals who had been found 'guilty' in a court somewhere.

Among those distributing the second leaflet, which was unsigned and unattributed, was Thelma Perkins of the United Progressive Caucus (UPC). This reporter and several others watched her approach and give the leaflet to delegates entering the building prior to the beginning of the April 7, 2010, CTU meeting. [This reporter, who sells Substance at the CTU meetings and is a delegate to the House representing retired teachers, had observed the distribution of the same leaflet in the same manner at previous House of Delegates meetings as well].

Marilyn Stewart supporter and long-time United Progressive Caucus (UPC) member Thelma Perkins (above, in an undated photo) was again seen distributing the anonymous leaflet — headlined 'GUILTY' — attacking former union Vice President Ted Dallas and current Treasurer Linda Porter before and during the April 7, 2010 CTU House of Delegates meeting. Stewart's UPC has been trying to circulate the leaflet without attribution despite a Confidentiality agreement signed by CTU lawyers in Cook County Circuit Court following Dallas's lawsuit, which demanded that he be paid the full salary for his term of office despite the fact that Stewart's executive board ousted him during the summer of 2008. Dallas agreed to the Confidentiality agreement, in which both parties agreed not to reveal the amount the CTU paid Dallas and CTU agreed not to besmirch Dallas's reputation. Beginning with articles in the Chicago Union Teacher and continuing with the distribution of the 'GUILTY!' leaflets, Stewart and her faction have risked more union costs in their pursuit of Dallas. Substance photo.Stewart loyalist Thelma Perkins (who has been a UPC activists for longer than some of the current members of the House of Delegates have been alive) was trying to covertly make sure that everyone entering the House of Delegates got one of the "GUILTY" leaflets being distributed by Stewart's UPC members.

Apparently, nobody in the union's leadership had told Perkins and the others who were distributing the leaflet on behalf of the union president, who is a candidate for re-election on the UPC ticket, that what they were doing had just cost the union more than $100,000 and might cost it even more. At the same time, among dozens of people distributing leaflets to those who were entering the meeting, former CTU Vice President Ted Dallas was distributing leaflets for the CSDU caucus. Dallas was also trying to explain to a number of union members that the 'GUILTY' leaflet was another example of what was costing the CTU another $100,000.

The $100,000 was at issue because CTU President Marilyn Stewart (and at least a half dozen members of her UPC caucus) have apparently been so obsessed with Dallas and Porter that Stewart's staff had just violated an agreement to maintain confidentiality and to not try and attack Dallas's good name made in court last year, at the time a lawsuit filed by Dallas was settled with the union. The terms of the lawsuit have hitherto been confidential by agreement of both parties. The lawsuit was filed by Dallas after he was stripped of his union membership following a controversial trial in front of the CTU Executive Board (virtually all of whose members have been chosen by Marilyn Stewart) which Stewart refused to submit to the House of Delegates.

The current legal disputes stem from the 2007 and 2008 activities by Stewart to get rid of Dallas, who had been re-elected union vice president in May 2007. Much of the story was covered in Substance at an article about what Substance called the CTU Purge Trial at the time.

http://www.substancenews.net/edit_article.php?page=547§ion=Article

Because of the violation, the union had now been served with a judge's order and is facing additional costs of more than $100,000 for just the kind of behavior that the UPC members like Perkins were doing. A week earlier, a circuit court judge in Cook County had issued an order finding that the union had violated what is called a "liquidated damages" agreement and had to pay $100,000 — plus attorneys' fees to Dallas's lawyers — because of it. No mention was made of the liquidated damages order, and few people discussed how the anonymous leaflet being distributed by members of Marilyn Stewart's UPC might be related to it.

On March 30, 3010, a week before the union meeting, the CTU lost another round in court. That day, Cook County Circuit Court Judge Dorothy Kirie Kennard issued an order that ended:

"The Chicago Teachers Union shall pay to Plaintiff Ted Dallas the sum of $100,000 within 14 days of the entry of this order..."

Because the CTU's attorneys have asked to appeal Judge Kinnaird's Order, the union will be in court on April 15, 2010, to prove that it has placed the $100,000 in a kind of escrow account while it appeals. Because of the actions by the union leadership that led to Judge Kinnaird's Order, the CTU is also facing the prospect of paying at least $40,000 in attorneys' fees to Ted Dallas and interest for the time between now and when the issue is finally resolved on appeal.

Above, the first page of Judge Kinnarid's March 30 seven-page Order, listing the various motions and legal papers filed since Ted Dallas asked the court to hold that the CTU had violated the Settlement Agreement. Not all of the legal documents in the case of Dallas v. Chicago Teachers Union are available to the public because of the Stettlement Agreement, which the union requested. The seven-page decision rendered by Judge Kennard one week before UPC members continued to violate an earlier agreement was not being distributed to the members of the CTU House of Delegates, either by Marilyn Stewart and the union's officer (who should have reported the event to the Delegates) or by the members of the UPC (who were actively violating the judge's orders while promoting Stewart's candidacy).

The issue returned to Judge Kinnard's courtroom in a straightforward manner. Following the vote of the CTU executive board, which is controlled by Mairlyn Stewart, to strip Ted Dallas of his union membership (and hence the office of Vice President, to which he was last elected in May 2007), Dallas sued the union to enforce his right to be paid for the remainder of his contract (roughly two years). Eventually, the union's attorneys and Dallas agreed to a settlement which paid Dallas an undisclosed amount (the amount kept secret because the union demanded it) subject to two conditions: Dallas would be eligible to work for the union if hired by any future administration, and Dallas would be restored to his CTU membership on January 1, 2011. By late 2009, Dallas charged that the CTU administration had violated its agreement not to slander his good name. Specifially, his attorney brought to the court copies of materials published in the Chicago Union Teacher that reminded union members that Dallas had been ousted. At no time did union officials tell the union's members how much their agreement with Dallas cost. Nor did they tell the union's members that they had agreed to allow Dallas to return to union membership following the May 2010 union election. In fact, prior to the recent decision (see the complete ORDER below), no one knew how much Dallas had received as part of the settlement, and Dallas refused to reveal anything about the agreement. Despite the agreement, beginning no later than October 2009, members of Marilyn Stewart's UPC were regularly observed leafletting members of the House of Delegates entering the Local 399 union hall for the monthly union meetings. UPC members would distributed the official UPC leaflet, but also hand out a plain white leaflet headlined 'GUILTY' and accusing Dallas and Porter of being thieves. The 'GUILTY' leaflet refereed to a case involving a dispute within the United Progressive Caucus over who controlled the caucus treasury. Dallas and Porter lost the dispute and the UPC name and treasury were turned over the the current leaders of the UPC. Although the 'GUILTY' leaflet implied that Dallas and Porter had been found guilty of criminal behavior (and from time to time those distributing the leaflet would imply as much), the leaflet actually reported on what amounted to a routine dispute that was settled in a civil suit by a court. Generally, such disputes are reporters as decided in favor of plaintiffs or defendants, but they are not the same as criminal complaints where a verdict of guilty means that one side violated criminal law.

During the same time that Dallas and Porter were involved in the dispute about the UPC's finances in another court, Dallas had brought a lawsuit demanding that he be paid for the full term he would have served had Marilyn Stewart not gotten the union's executive board to strip him of his union membership, effectively firing him from his job as the elected vice president of the union.

BELOW IS THE FULL ORDER ENTERED BY JUDGE KINNARD ON MARCH 30, 2010:

IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, COUNTY DEPARTMENT, CHANCERY DIVISION

THEODORE DALLAS, PLAINTIFF

V.

CHICAGO TEACHERS UNIOIN, MARILYN STEWART, GAIL KOFFMAN, AND PATTI WALSH, DEFENDANTS

ORDER

This case came before the Court on Plaintiff's Motion to Enforce Settlement Agreement. The Court has received and reviewed Plaintiff's Motion, Defendants' Response, Defendants' Amended Response i Opposition, Defendants' Supplement to Amended Response, Plaintiff's Redacted Reply, Defendants' Letter Memorandum dated January 21, 2010, and filed February 23, 2010, Plaintiff's Memorandum of Law in Response to Defendants' Letter Brief, Plaintiff's Supplemental Brief Regarding Liquidated Damages Provision, and Defendants' Response to Plaintiff's Brief Regarding Liquidated Damages Provision. The Court has also considered the Release and Settlement Agreement, the various affidavits, and the exibiits submitted by the parties, as well as the argument of counsel. THE COURT FINDS AS FOLLOWS:

1. There are no factual issues before the Court relating to the Motion to Enforce Settlement Agreement. The parties have agreed that none of the affidavits submitted to the Court raise disputed factual issues. It is not necessary to hold an evidentiary hearing on the Motion to Enforce Settlement Agreement.

2. Since the outset of this case, Plaintiff has sought the protection and preservation of his good name. In his original Complaint and his supsequent pleadings, Plaintiff alleged that the Defendants engaged in a conspiracy to ruin Plaintiff's reputation and to have him removed as Vice President of the Chicago Teachers Union. Plaintiff alleged that the Defendants fabricated claims that he misused union funds as a pretext for removing im from office. Plaintiff's most recent complaint, the Verified Second Amended Complaint, asserted causes of action for breach of the Chicago Teachers Union's Constitution and By-Laws, tortious interference with Plaintiff's rights under Constitution and By-Laws, false light, and conspiracy.

3. On or about May 7, 2009, the parties in tis case entered into a Release and Settlement Agreement which contained in pertinent part:

'1.3. Upon acceptance of the payment indicated in Paragraph 1, Plaintiff also agrees that at no time prior to January 1, 2011 will he make a request for membership in the Chicago Teachers Union or be reinstated as a member with the Chicago Teachers Union. Plaintiff further agrees that at no time before 2011 will he run for or hold an elected position in the Chicago Teachers Union, nor will he attend any House of Delegates meetings as a guest, volunteer, or in any other capacity, unless approved to do so by the then President of the CTU. Plaintiff may hold an appointed position provided he has been appointed by the President of the CTU and approved by the Executive Board in place at the time of the appointment.

'2.1. The CTU, including through its elected officers, employees and agents acting on its behalf, will not make any written or oral statement concerning Mr. Dallas or the settlement in any of its publications or publicly at any CTU or union event, which includes without limitation publishing any editorials, letters, articles, etc., in any CTU or CTU related publication, including without limitation newsletters, mailings, delegate workshops, conventions, Executive Board Meetings, District Supervisor Meetings, and House of Delegate meetings. Each of Marilyn Stewart, Leslie Baron, Patti Walsh, Gail Koffman, and Theodore Dallas agrees not to issue any written statement disparaging any of the Defendants and/or Mr. Dallas. Likewise, the parties agree that violation of the provision would cause substantial damage to Mr. Dallas or the Union for which either would be entitled to damages depending on who violated this or any other provision of this Agreement. The parties mutually agree that such damage would be a minimum of One Hundred Thousand Dollars ($100,000.00) and that if such a violation occurs, Mr. Dallas or the CTU will be entitled to a minimum of such damages and attorney's fees if Mr. Dallas or the CTU successfully establish a violation of this provision. Both parties represent and warrant that neither party has issued such a statement since at least February 1, 2009, through the execution of this Agreement. [Emphasis supplied].

'4. CONFIDENTIALITY. The parties agree that the terms of the settlement agreement shall remain confidential but the parties may acknowledge that the case has been settled and dismissed... A breach by either party shall include disclosure of any of the provisions of this Agreement, including, but not limited to the settlement, figures and terms. This paragraph does not limit the rights of either party to sue for breach of this Agreement or to seek equitable relief to enjoin continuing breaches of this Agreement. This provision shall not apply to any complaint charge or lawsuit that the parties may file challenging the enforceability of this Agreement. [Emphasis supplied.]'

4. In October of 2009, the Chicago Union Teacher, the Official Publication of the Chicago Teachers Union, published in Volume 73, No. 2, an article under the News Briefs Section on Page 8 which notified members of the Union of three items that would be going before the Union membership for a referendum vote. The Chicago Union Teacher Publication is distributed to all 32,000 members of the Chicago Teachers Union. Among the three items referred to in the article was the following statement:

'The second item before the membership is to create a constitutional provision is [sic] to codify that an officer who loses his or her membership also must relinquish office. Without such a provision, action by the Executive Board in dealing with misconduct by an officer, as dictated by the Union's By-Laws, can cause lengthy legal action as was the case last year when the former vice president was removed from office.'

5. Also published in the October 2009 issue of the Chicago Union Teacher, appearing on Page 18, was an article by John A. Ostenburg concerning the accomplishments of the Chicago Teachers Union's Financial Secretary Mark Ochoa. In describing Mr. Ochoa's accomplishments, the article stated:

'He was elected to his current position in 2004 and re-elected by a massive margin in 2007. Since the second election, — due to the removal from office of the former vice president for inappropriate activities — Mr. Ochoa has had to take on increased responsibilities as a Union officer and has done so with his usual grace and good humor.'

6. In November of 2009, the Chicago Union Teacher published in Volume 73, No. 3 an article on Page 4 which contained the following statement:

Above, the fourth page of Judge Kinnaird's Order of March 30, 2010, describes how the Chicago Teachers Union violated its promise not to harm Ted Dallas's good name and reputation.'As most members will recall, the former Vice President was removed from membership in the Union in the fall of 2008 because of charges brought against him, including misuse of Union funds, providing special benefits to some members over others, and inappropriate behavior toward colleagues. The Executive Board took the action against him following a trial at evidence was presented and he and his legal counsel had the opportunity to present evidence and challenge the findings. The Constitution clearly gives the Executive Board the authority to act as it did.

'However, following the conviction, the former Vice President went to court to challenge the Executive Board's action. A major complication resulted from the fact that the constitutional authority given the Executive Board allows it to remove an individual from membership, but the Constitution is silent on removal of an officer from his or her elected position. Since the Constitution does state clearly that an individual must be a member in good standing to seek election to office, the Executive Board inferred, with the support of the Union's attorneys, that someone removed from membership could not continue to hold an office.

'While the matter ultimately was resolved in support of the Executive Board's action, an unnecessary amount of time and expense was expended in the legal battle that ran for several months.'

7. It is not disputed that Plaintiff is the only Chicago Teachers Union Vice President who was ever removed from the position, and that Plaintiff is the only person about whom the articles could be referring as the 'former Vice President.'

8. In particular, the November 2009 article refers to "a number of charges brought against him including misuse of Union funds, providing special benefits to some members over others, and inappropriate behavior toward colleagues." It also represents that there was a "conviction" and says that "the matter ultimately was resolved in support of the Executive Board's action." There was no conviction in this Co8urt nor was there any affirmation by this Court of any action taken by the Defendants against the Plaintiff. More particularly, this case was not "resolved in support of the Executive Board action." That statement is simply false.

9. Plaintiff has established that the aforementioned publications in October 2009 and November 2009 constitute a violation of the Release and Settlement Agreement, triggering the $100,000 liquidated damages provision set forth in Paragraph 2.1. While Plaintiff could, under Section 4 of the Release and Settlement Agreement, sue for breach of the Agreement or seek to enjoin breaches of the Agreement, Plaintiff clearly as a right to liquidated damages under Section 2.1"

10. In Illinois, a liquidated damages provision will be enforced if it satisfies the test outline in Section 35b of the Restatement (Second) of Contracts:

'(1) The parties intended to agree in advance to the settlement of damages that might arise from the breach; (2) the amount of liquidated damages was reasonable at the time of contracting, bearing some relation to the damages which might be sustained; and (3) actual damages would be uncertain in amount and difficult to prove.'

Jameson Realty Group v. Kistner, 351 Ill App. 3d 416, 423 (1st Dist. 2004). There is no fixed rule applicable to all liquidated damages agreements, and each on must be evaluated on its own facts and circumstances. Penske Truck Leasing Co. L.P. v. Chemetco, Inc. 311 Ill. App. 3d 447, 454 (5th Dist. 2000). Additionally, the damages contained in a liquidated damages clause must be for a specific amount for a specific breach; the provision may not merely serve as a threat to secure performance or as a means to punish nonperformance. Jameson Realty Group v. Kistner, 351 Ill App. 3d at 424.

11. It is undisputed that the liquidated damages provision in Paragraph 2.1 of the Agreement as it related to Mr. Dallas the the provision in Paragraph 1.2 that Mr. Dalas may hold an appoointed position with the Chicago Teachers Union in the future were submitted by counsel for Plaintiff during the course of the negotiations. It is also undisputed that counsel for the Defendants revised what ultimately became Paragraph 2.1 of the Agreement to make the liquidated damages provision mutually binding and to insert the words "mutually agree." Counsel for Defendants changed the phrase "[t]he parties estimate that such damage would be a minimum of One Hundred Thousand Dollars" to "[t]he parties mutually agree that such damage would be a minimum of ONe Hundred Thousand Dollars."

Above, on the fifth page of her March 30 Order, Judge Kinnaird had reviewed the statements published in the Chicago Union Teacher and concluded about one of those statements: "That statement is simply false." Less than two weeks after Judge Kinnaird issued the Order, members of Marilyn Stewart's United Progressive Caucus were observed by many CTU members, including Dallas himself, distributing an anonymous leaflet claiming that Dallas and CTU Treasurer Linda Porter had been found 'GUILTY' of something, when, as Judge Kinnaird notes above, the issues in the Dallas cases were resolved as a result of civil proceedings or administrative hearings within the union. 12. The liquidated damages in the amount of "a minimum of One Hundred Thousand Dollars ($100,000)" has a direct bearing on any future elected or appointed office :laintiff may pursue with the Chicago Teachers Union. His prior salaries from 2004 to 2009 ranged from $121,383.99 to $180,886.82. In negotiating the Release and Settlement Agreement, Mr. Dallas sought to secure the right to hold an appointed position in the Chicago Teachers Union in the future and he sought to ensure that his reputation in the future would not be compromised by statements that the Chicago Teachers Union and the Defendants might make about him.

13. Based upon the affidavits and exhibits submitted to the Court: (1) the parties intended to agree in advance to the settlement of damages that might arise from the breach; (2) the $100,000 amount of liquidated damages was reasonable at the time of contracting bearing some relation to the damages which might be sustained; and (3) actual damages were uncertain in amount and difficult to prove.

IT IS THEREFORE HEREBY ORDERED AS FOLLOWS:

1. Plaintiff's Motion to Enforce Settlement Agreement is granted.

2. The Chicago Teachers Union shall pay to plaintiff Theodore Dallas the sum of $100,000 within 14 days of the entry of this order.

ENTERED: [Stamped]. Judge Dorothy Kirie Kinnaird, No. 276, March 30, 2010.

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