The US Department of Labor could soon increase transparency requirements of some public sector unions, and state think tanks can play a crucial role in ensuring this step is taken.
Last month, the Department of Labor’s Office of Labor-Management Standards published a notice of proposed rulemaking to increase financial transparency requirements for public sector, intermediate-level unions, including those at the regional, district, and state levels. If implemented, this rule would make it easier for members to hold their unions accountable, and make it easier for those working to protect workers’ rights to understand the impact of their efforts.
Currently, only unions with private-sector members are required to report their financial and membership data (including public-sector national unions), making it difficult to truly understand changes or trends in public sector union membership; the financial health of these unions; or how these organizations spend the money they collect from unions. Workers deserve to know how unions are spending their money. If the proposed rule is finalized, at least 139 additional public-sector unions will be held to higher accountability standards.
Notice of Proposed Rule-Making
The proposed rule would require intermediate public sector unions (for example, state-level unions that are subordinate to national unions but above local unions in the organization hierarchy) to disclose financial transactions and membership information. Currently only unions with private sector members are subject to annual financial reporting requirements. The proposed rule would give union members and the public the right to see 139 public sector, intermediate unions’ finances and membership information.
See details of the rule and submit comments here.
Comments are due by February 18, 2020.
Background
On December 17, 2019, the US Department of Labor issued a Notice of Proposed Rule Making regarding whether the Department should require union intermediate bodies made up of only public employees to file the same financial reports required of unions with private sector members. Currently unions with only public employees are not required to file these reports.
Intermediate bodies are mid-level unions between a national and local union. For example state level unions that are directly under a national union.
DOL is reinterpreting Section 3(i) of the Labor Management Relations Disclosure Act, 29 U.S.C. 402(i), which defines a “labor organization” as (1) any organization “engaged in an industry affecting commerce . . . in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment,” or (2) “any conference, general committee, joint or system board, or joint council so engaged which is subordinate to a national or international labor organization other than a State or local central body.” [emphasis added]
The new interpretation would include “any conference, general committee, joint or system board, or joint council so engaged which is subordinate to a national or international labor organization” if they are made up of entirely public employees but under a national or international labor organization that files financial reports required under the LMRDA.
The rule itself is not new. The Department of Labor issued a similar rule under the Bush administration but the reinterpretation of LMRDA covered labor organization was change back to the antiquated definition under the Obama administration.
The Department gave several reasons for the reinterpretation:
- Public sector unions have increased dramatically since the LMRDA was enacted in 1959. DOL referenced the Supreme Court in Janus v. AFSCME in that “the Court in that case considered changes in public sector unionization as relevant to its constitutional analysis.”
- Congresses intended the LMRDA to be interpreted broadly to ensure union transparency, democracy, and integrity to benefit union members.
- Because the national union has private sector members and their dues are sent to the intermediate bodies, those private sector members have a right to know how their money is being spent noting that “private sector union members and the public have an interest in how labor unions, including intermediate bodies, spend their union member dues. And this interest is no less great when the money is spent in ways that affect political activities, state electoral outcomes, and state budgets. Extending LMRDA coverage to intermediate bodies subordinate to covered international unions brings transparency to these activities and serves the public interest in disclosure and financial integrity.”
- Union interconnectivity and complexity has increased greatly since 1959 requiring an updated interpretation of the LMRDA.
- Extending transparency to intermediate bodies “serves the public interest in disclosure and financial integrity… OLMS [ the agency that administers and enforces the LMRDA] finds civil and criminal violations in all tiers of labor unions, including intermediate bodies. During the immediate five-year period, 5.7% of OLMS criminal investigations concerned intermediate unions. Further, the criminal fallout rate for intermediate bodies during this same period was 13.8%.
The Department of Labor estimates that the rule will affect 139 intermediate unions. DOL focused on four unions, American Federation of Teachers (AFT), Fraternal Order of Police (FOP), National Education Association (NEA), and International Association of Fire Fighters (IAFF). According to DOL latest reports:
- AFT had 12 non-filing intermediate bodies and sent “$1,746,234 in disbursements from the AFT to its non-filing intermediate bodies”
- FOP’s had 46 non-filing intermediate bodies but “Form LM-2 report indicated that it did not disburse funds to any of its non-covered intermediates.”
- NEA had 42 non-filing intermediate bodies with “a total of $74,471,218 in disbursements from the NEA to its non-filing intermediate bodies.”
- IAFF’s had 39 non-filing intermediate bodies with “Illinois and Rhode Island intermediates only received … disbursements totaling $29,720.”