NAWER

Fact Sheet: Revised Final LM-30 Ruling

 

Enhanced Transparency and Improved Protection for Workers

Summary

On July 2, 2007, the U.S. Department of Labor will publish in the Federal Register a final rule revising Form LM-30, also known as the Labor Organization Officer and Employee Report.

Under the Labor-Management Reporting and Disclosure Act (LMRDA), union officers and employees (other than employees performing clerical or custodial services exclusively) are required to report payments from, interests in, and transactions or arrangements they may have with businesses that buy from – or sell to – the union, a trust in which the union is interested, and the employer of their union members. Payments from, interests in, and transactions or arrangements with certain other employers must also be reported. Similarly, union officers and employees must report payments, interests, transactions, and arrangements of the types described involving their spouses or minor children. The intent is to reveal to union members possible conflicts of interest that could harm their rights and benefits.

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The LMRDA gives the Secretary of Labor the authority to revise the Form LM-30.

Why Make Changes?

This reporting requirement was established in 1959, and the form has remained essentially unchanged since it was created in 1963. Few forms have been filed over the years, and those that are filed are often deficient in important ways. Changes need to be made to improve and update the form to strengthen critical protections for union members. The need for enhanced protection has been illustrated by several cases where conflicts of interest and criminal conduct should have been prevented. For example:

• Capital Consultants, Inc. – CCI was an investment firm that, at its height, managed over $1 billion in assets, three quarters of which were union pensions and other investments on behalf of union members. The company collapsed in September 2000, costing its clients approximately $355 million in benefits. CCI had hired relatives of pension trustees and provided plan trustees with gifts, such as rifles, season tickets to sporting events, and fishing and hunting trips to various exotic locations. CCI’s chairman was indicted for fraud, money laundering, witness tampering and making illegal payments to buy the influence of trustees who managed the benefit plans, and its principal sales agent was convicted of over 20 felonies for his role. These transactions would have to be reported on the revised LM-30 by the union trustees, alerting union members and the Department of Labor to possible malfeasance.
  
• United Transportation Union – The president of the United Transportation Union had the sole authority to appoint or remove attorneys from a union list of attorneys recommended to union members seeking compensation for on-the-job injuries. Rather than selecting attorneys for the list on the basis of their ability to effectively represent union members, the president rewarded attorneys who gave him cash and other perks. The gifts and payments received would be evident on the revised LM-30, and union members would be able to consider these payments in selecting representation in pursuing their claims.
• United Food and Commercial Workers – Officers of the UFCW hired contractors to make repairs and improvements to the offices of a UFCW local. However, the contractors also
  performed work on the officers’ homes, with the $1.2 million cost for this work being charged to the union — in other words, paid for with union members’ dues. The revised LM-30 would require each officer to report the value of the work done on the officer’s home, allowing union members to prevent the improper expenditure of their dues money.
  

What Has Been Changed?

There are several key changes on the revised Form LM-30. These include:

• Clear Instructions for LM-30 Filers: The revised form and instructions more clearly define key terms and provide specific examples of the financial matters that must be reported.
• Closing Loopholes: The revised LM-30 eliminates old regulatory exemptions that allowed filers to avoid reporting certain financial matters that present the potential for conflicts of interest for union officers and employees.

 

Enhanced Disclosure: Disclosure on the new form will include:

 

• The filer’s interests, payments, loans, transactions, or other arrangements with employers and businesses;
• A description of the relationship between the employer and the filer’s labor organization; and,
• Dealings between the business and the filer’s labor organization, a trust in which the union is interested, or the employer of the union members.
  

 

Higher Reporting Threshold: To minimize the reporting burden, payments or gifts totaling $250 or less from any one source do not have to be reported (payments or gifts valued at $20 or less do not need to be included in determining whether the $250 threshold has been met).

What Will be Reported?

• Payments received by a union officer or union employee from an employer, when the payment is not for actual work performed by the union official for the employer (i.e., union leave and no- docking payments) and the payments are for more than 250 hours for the year.
  
• Loans to a union officer or union employee from a company whose workers the union represents or is actively seeking to represent.
• Payments received by a union officer or union employee from a business that deals – or seeks to deal – with the filer’s labor organization or a trust in which the labor organization is interested.
• Payments received by a union officer or union employee from a business that derives ten percent or more of its receipts from a company whose workers the filer’s labor organization represents or is actively seeking to represent.
• Payments received by an officer of national, international, or intermediate unions from businesses that deal, or seek to deal, with local and other subordinate unions, and trusts affiliated with these lower-level unions.