This may be a bit wonky, but if you are a union-free, private-sector employer with two or more employees, there’s something sinister coming down the pike from Washington that you’ll probably want to know about.
Any day now, the union-controlled Department of Labor will be issuing new rules interpreting a little-known 1959 law called the Landrum-Griffin Act (officially, the Labor-Management Reporting & Disclosure Act).
A Brief History Behind the LMRDA. In the late 1950s, the U.S. Senate’s Select Committee on Improper Activities in the Labor-Management Field held hearings into the undemocratic practices, labor racketeering and mob influence in certain unions, most notably the Teamsters. It was during those televised hearings that a young Robert F. Kennedy famously clashed with then-Teamsters President Jimmy Hoffa as America first glimpsed how union bosses could be corrupted.
Following the Senate’s McClellan Committee hearings, Congress enacted the LMRDA. The effects of the LMRDA on unions was to provide a Union Members’ Bill of Rights for union members, as well as more transparency as the LMRDA requires that unions file financial disclosures that enable unions to see how their dues are spent.
One of the lesser known reporting requirements of the LMRDA, however, is the provision that applies to employers who wish to remain union-free.
Under the 1959 law, if an employer hires a consultant to persuade employees in the exercise of their rights (most typically during a union campaign), both the consultant and the employer must file reports with the Department of Labor’s Office of Labor Management Standards (OLMS). These reports are known as “LM” reports and include the amount of all moneys paid by the employer to the consultant for his services. A willful failure to file the LM reports could cost either the consultant and/or the employer $10,000, a year in prison, or both.
Since its enactment, the LMRDA’s reporting requirements have almost always been interpreted to apply only to those employers who hire consultants who “directly persuade” (meaning meet directly with) employees. Under the reporting requirements, employers have not had to report advice received by their attorneys, nor have they had to report conversations between their own managerial employees and workers. However, that may soon change.
In May, the Department of Labor held a public meeting to ostensibly seek comments regarding the interpretation of the LMRDA’s reporting requirements. In its announcement of the May meeting, the Department of Labor stated that it was seeking to “narrow” the advice exception to the LMRDA’s reporting requirements.
The Department views its current policy concerning the scope of the “advice exception” as over-broad, and that a narrower construction will result in reporting that more closely reflects the employer and consultant reporting intended by the LMRDA. Regulatory action is needed to provide labor-management transparency for the public, and to provide workers with information critical to their effective participation in the workplace.
It is widely believed that the DOL’s intent is to target employers who seek advice and assistance from attorneys when targeted during union organizing campaigns and cause both the employers and attorneys to report the fees paid to the attorneys (or law firm). [The reports then would become public information.]
The other area that the DOL announced interest in was the possibility of requiring employers to report moneys paid to managerial employees who engage in conversations with workers about unions in the workplace.
Another exception to reporting is in section 203(e), which provides that no “regular officer, supervisor, or employee of an employer” is required to file a report covering services undertaken as a “regular officer, supervisor, or employee of an employer.” Further, the employer is not required to file a report covering expenditures made to a “regular officer, supervisor, or employee” as compensation for service as a “regular officer, supervisor, or employee.” The Department sought comments on the application of this exemption to the scope of employer reporting under sections 203(a)(2) and (a)(3), which require employers to report payments to their own employees for purposes of causing them to persuade other employees as to their bargaining rights, and to report expenditures to “interfere with, restrain, or coerce employees” in their bargaining rights and to obtain information concerning activities of employees and labor organizations in connection with a labor dispute.
If a reporting requirement is triggered every time a conversation about a union occurs between a supervisor and workers in the worklace, there will be thousands of large and small companies alike who could run afoul of the law without even knowing it.
As the Department of Labor stated that it would be issuing its new standards for interpretation and enforcement sometime in November, it is expected that the DOL’s interpretation will require employers and attorneys to report any of their financial interactions when an attorney is giving “advice” to an employer during an organizing attempt.
The DOL’s intent is very simple: to kowtow to union bosses who want to unionize America’s workers at any cost. By doing the union bidding, the DOL is trying to create as many obstacles as possible for employers who wish to remain union free. In addition to a paperwork nightmare, the union-controlled Department of Labor’s intent is to make the information public, trying to give unions more ammunition to publicly harangue employers who oppose unionization.
The LMRDA is not your average regulation, as it also carries criminal penalties of $10,000 fines and/or one year of imprisonment for willful violators. Because of the severity of the DOL’s intent, the more employers know about how bad it is, at least they’ll know that the Department of Labor is coming gunning for them, and it is happening soon.
We’ll keep you posted.
“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776
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