Are There Changes in the Wind for Union Reporting of Financial Information? Thumbnail

Are There Changes in the Wind for Union Reporting of Financial Information?

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With the position of its director finally filled (by Arthur F. Rosenfeld), the U.S. Department of Labor’s Office of Labor Management Standards (OLMS) is able to turn its attention to reviewing its rules and interpretations. While the main focus of attention at OLMS during the years of the Obama Administration was the “Persuader Rule” that would have imposed onerous reporting requirements upon both employers and law firms that advised employers about their legal rights during union organizing campaigns, OLMS also made other, less well-known changes. The Competitive Enterprise Institute, a free market think tank, has identified three items that it believes OLMS should address.
 
The first is the status of “Worker Centers” as labor organizations. In many cases, Worker Centers are set up and financed, and sometimes staffed, by recognized unions. The reason for doing so is to avoid various requirements or restrictions that are imposed upon unions. These Worker Centers are set up as not for profit organizations, and engage in picketing, pro-union educational campaigns, advocacy and other forms of pressure upon employers and public officials. By avoiding characterization as labor organizations, they escape the reporting and disclosure requirements of the Labor Management Reporting and Disclosure Act of 1959, as amended (the LMDRA).  As described in an analysis by the U.S. Chamber of Commerce, the Obama Administration took a very narrow view of the definition of “labor organization” which has allowed these Worker Centers to operate without regulation or disclosure of their funding and expenditures. CEI has recommended clarifying that Worker Centers existing to deal with employers in the interest of employees are subject to the LMDRA’s requirements.
 
Second, OLMS changed the LM-30 form, which unions must file, to eliminate a number of financial disclosures, including union work paid by employers, credit union transactions, and payments to union officials from union benefit trusts. CEI recommends reinstating the 2007 version of the LM-30 form.
 
Third, in 2010, OLMS issued a rule rescinding the requirement that unions file form T-1, the Trust Annual Report, which disclosed what union trusts spent their money on. These trusts are set up to funds things like apprenticeship training programs. Sometimes, they are used to fund improper activities, such as payments for personal expenses of union officials. Form T-1 is a tool that could protect union members from having their benefit trust funds used for improper purposes, so CEI recommends its reinstatement.
 
Whether OLMS will act on these recommendations remains to be seen. The Worker Center issue can be handled as a matter of guidance, which would not require formal rulemaking. Additionally, Worker Centers are extremely irritating to many business organizations, such as those in the restaurant industry and the cleaning/janitorial industry, so correction of the Obama interpretation may be an early focus.

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