A key leadership post at the Department of Labor finally has been filled. The Trump administration installed Arthur Rosenfeld as the head of the Office of Labor-Management Standards (OLMS), which administers and enforces the Labor Management Reporting and Disclosure Act (LMRDA) of 1959. The LMRDA primarily requires union financial transparency and created the union member bill of rights, which promotes democracy in unions. Now, with the vacancy at the OLMS filled, here is shortlist of priorities the sub-agency should seek to accomplish.
1. Revise guidance related to worker centers. Worker centers is a broad term that defines varying groups that advocate for workers. However, many are simply union front groups that directly deal with employers and seek to make changes in the work conditions and pay like any other labor union. These types of worker centers should be categorized as labor unions under the LMRDA.
Co-founder and Executive Director of Restaurant Opportunities Center, a worker center, Saru Jayaraman wrote in a paper how it is legally advantageous for worker centers to be classified as non-profits as opposed to labor unions. In a previous post, I discuss the benefits of nonprofit status for worker centers, which includes avoiding “duty of fair representation,” permission to engage in secondary boycotts, and skirting financial disclosure requirements.
Under the LMRDA, a labor union is defined as any organization “engaged in an industry affecting commerce” that represents employees with the purpose to deal “with employers concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment.”
OLMS guidance from 2008 and 2013 defines a labor union too narrowly. Moving forward, the OLMS should revise its guidance and propose regulation to classify worker centers that directly engage with employers as labor unions. A recent U.S. Chamber of Commerce report provides legal analysis on how the current OLMS guidance is misguided.
The LMRDA was enacted to ensure labor unions are accountable to members by requiring democratic election of officers, financial integrity, and employee access to union information. It is important to ensure worker centers, which fall under the LMRDA definition of a labor union, are held accountable by the OLMS as well.
2. Require Union Officials to File 2007 Form LM-30. The LM-30 Form was designed to make union finances transparent and hold union officials accountable to their membership, one of the primary purposes of the LMRDA. Specifically, this disclosure is meant to expose financial holdings of union officers and family members to prevent conflicts of interest.
Under the Obama administration, the OLMS reduced union financial disclosure requirements on the LM-30. Under the Obama regulation, the DOL’s union financial reporting document, the LM-30, no longer require financial disclosure reporting by union stewards, leave for workers performing union activities while being paid by their employer, financial dealings with credit institutions (such as loans), and union officials’ payments from union trusts.
OLMS should reinstate the requirement that union officers file the 2007 Form LM-30.
3. Reinstate Form T-1. In 2010, OLMS issued a final rule that rescinded the requirement that labor unions file Form T-1, Trust Annual Report. This form required financial disclosure related to union trusts that are set up to provide member benefits like training and apprenticeship plans. Form T-1 required unions disclose what the trusts spent money on. OLMS should propose regulation to reinstate Form T-1 and require unions to disclose how much money are in union trusts and how they spend it.
Recent history shows why this is important. In July 2017, a massive United Automobile Workers (UAW) corruption scandal was exposed. Law enforcement revealed that the UAW spent millions of dollars, which were supposed to be spent on training members, on air travel, solid gold pens, a Ferrari, and other extravagant items. To say the least, union financial transparency is needed now more than ever to ensure union dues are spent to the benefit of members.
OLMS should propose regulation to reinstate Form T-1 financial disclosure requirements.