OPSEU suing three former leaders for $6 million in damages
OPSEU, one of the province's largest unions, is suing three former leaders - including longtime president Warren (Smokey) Thomas - for millions of dollars, alleging they withdrew $670,000 in cash from a strike fund without explanation, received significant compensation" atop their salaries and had union-purchased vehicles transferred to themselves and their families.
The allegations against Thomas, former first vice-president/treasurer Eduardo Almeida and Maurice Gabay, former administrator of the union's financial services division, are detailed in a statement of claim filed in Ontario's Superior Court on Monday morning and follow a forensic audit ordered by the union.
The allegations have not been proven in court. No statement of defence has been filed.
I know that this is troubling news to take in, but I give you my commitment that we will work tirelessly to rebuild trust," wrote OPSEU's current president, JP Hornick, in an email to members obtained by the Star.
The statement of claim is just a first step," said Hornick, adding, We will not waver in our commitment to seeking justice in this matter, and we have the full support of the board to pursue all available legal avenues ... I want to assure you that despite today's news our union remains strong and our finances stable."
Almeida and Gabay were not immediately available for comment. A woman who answered the phone at Thomas's Kingston-area home Monday evening said, I'm sorry, he's not interested in talking to you."
The three were served the statement of claim Monday, prior to OPSEU's email to members.
The Ontario Public Service Employees Union is asking for the recovery of funds and assets unlawfully transferred from OPSEU" in the amount of $1.75 million from Thomas, $3 million from Almeida and $1 million from Gabay, as well as damages of $6 million for breach of fiduciary duty, breach of contract, conspiracy, conversion and/or unjust enrichment (less any amounts recovered)," the statement of claim says.
As well, the union is asking for aggravated and/or punitive damages in the amount of $500,000 against each of Thomas, Almeida and Gabay," the statement says.
The statement of claim says money - in amounts ranging from $10,000 to $70,000 from 2014 to 2020 - was withdrawn for the union strike fund and allegedly used for undocumented and illegitimate purposes."
Thomas, who worked as a registered practical nurse, was president of the 180,000-member union for 15 years and retired in 2022.
Almeida, a correctional officer, was vice-president and treasurer from 2011 until he was defeated in last April's OPSEU election, but was a member of the union's board until July.
Gabay, a former tax auditor for the Ontario government, worked for OPSEU starting in 2008 and was fired from his position as administrator of the financial services division last April, the statement of claim says.
The union's executive board and its general membership trusted and relied on Thomas and Almeida to protect the union, including to ensure that members' hard-earned union dues were used in the best interests of the union and its members," the statement of claim says. The defendants have breached their duties to OPSEU. They abused the power and authority that the union's membership bestowed upon them and violated the trust that the union's membership placed in them year after year, election after election."
This is the second set of explosive claims to rock the Canadian labour movement, after allegations that former Unifor president Jerry Dias was involved in a kickback scandal and then attempted to obstruct a probe into his conduct. A third-party workplace investigation alleged that Dias, who retired last year, received $50,000 from a COVID-19 rapid test supplier he promoted to employers. Unifor referred the matter to the police.
Unifor represents workers in almost 30 sectors, including media. Unionized Toronto Star employees are represented by Unifor.
According to OPSEU's statement of claim, its executive board ordered a forensic audit in December 2021, but in or around February 2022, unbeknownst to the executive board at the time and in breach of their duties to the union, some or all of the defendants took steps to try to delay the forensic audit until after the upcoming election scheduled for April 2022, including obtaining advice on how to stall or delay the request for proposals process."
The forensic audit uncovered the financial irregularities and it is ongoing, the statement of claim says.
The statement of claim says that when Thomas retired, his severance payout was $61,903 and that the union did not make any such payout to Almeida. Gabay has received $118,456 in post-termination payments" from the union - which it is now seeking to recover in light of the misconduct that has been discovered to date," the statement of claim says.
The statement of claims also alleges that throughout their tenures," Thomas, who earned $142,740, and Almeida, who earned $131,322, caused the union to pay to them significant non-salary compensation and cash payouts to which they were not entitled," including almost $399,472 to Thomas and $281,275 to Almeida for lieu days," and $88,875 and $79,681 respectively for compensating days" for overtime for which they (as elected officers) were not entitled," on top of unauthorized signing bonuses."
These compensation payments were not known to or authorized by the executive board at the time," the statement of claim says, adding that Gabay, who was charged with oversight of payroll and compensation, breached his employment duties to OPSEU/SEFPO by conspiring or colluding with Thomas and Almeida, and/or permitting these unauthorized payments to be made to them."
The statement of claim also says the three incurred significant expenses" on union credit cards that the union paid out, without receipts or documentation, with Almeida's charges alone totalling $1,361,716.
The statement of claim says the union paid for home repairs and moving expenses in 2020-21 for a non-union member with whom Gabay had a personal relationship.
In addition, the claim alleges, since the defendants' departures, OPSEU/SEFPO has discovered that Thomas, Almeida and/or Gabay caused the union to transfer ownership of vehicles formerly registered to OPSEU/SEFPO to themselves, their relatives or their acquaintances, without consideration and for no legitimate purpose" over the years.
They include four vehicles transferred to Thomas's wife, Valerie, and two to his son Danny, the statement of claim says.
The union also transferred ownership of two vehicles to Almeida, and another vehicle was transferred to a non-union member Gabay had a personal relationship with, the statement of claim says.
Numerous withdrawals in amounts ranging from $10,000 to $70,000 were also made between 2014 and 2020 from the union's strike fund - which can only be used for strike pay and expenses related to job action, or a board-approved loan to other striking unions - the statement of claim says, adding any transactions require the signature of the president and first vice-president/treasurer.
These cash withdrawals were not known to or authorized by the executive committee or executive board at the time. No supporting documentation was provided to support the withdrawals or to explain their purpose," the statement of claim says.
OPSEU/SEFPO is not aware of any legitimate strike or lockout-related purpose behind withdrawing such significant sums of cash, and indeed there was none. In some of the years in which the withdrawals occurred, there was not even a strike or lockout," the claim says.
The claim also details allegations of unauthorized payouts to the three as well as others purportedly to settle complaints filed by those employees, for amounts that were inappropriate, unreasonable and excessive." The payments included one filed by Thomas that alleged discrimination and harassment against certain members of OPSEU/SEFPO's executive board and claiming damages for injuries to his feelings, dignity and self-respect" for a lump-sum payment by OPSEU/SEFPO to Thomas of $500,000 and the transfer of an OPSEU/SEFPO vehicle to Thomas, the statement of claim says.
The statement of claim also refers to an agreement between OPSEU/SEFPO and Almeida in March 2022, purportedly to settle an unparticularized claim by Almeida for defamation, intentional interference with economic relations, intentional infliction of mental suffering and civil conspiracy' for a lump-sum payment of $500,000 and the transfer of an OPSEU/SEFPO vehicle to Almeida."
The conduct of the defendants was egregious, high handed and deserving of sanction by this court," the statement of claim says. OPSEU/SEFPO is entitled to aggravated and/or punitive damages as a result of their deliberate and unlawful conduct."
Kristin Rushowy is a Toronto-based reporter covering Ontario politics for the Star. Follow her on Twitter: @krushowy