labor union law

Labor Law Deep Dive: What You Need to Know About LMRDA

Drive-thru:

  • LMRDA lists reporting and recordkeeping requirements for employers and labor union officials.
  • A provision of the act was overturned by the so-called “Persuasion Rule.”
  • The Department of Labor rescinded the Persuasion Rule as unlawful.

The Labor-Management Reporting and Disclosure Act (LMRDA) of 1959 was enacted to prevent the improper collusion of employers and labor union officials as well as to protect union dues from embezzlement.

The construction industry, particularly the trades, has a long relationship with unions. Unions were established and still exist to promote the economic and job interests of their members. The U.S. Bureau of Labor Statistics reports that in 2017 the unionization rate for private industry was 6.5 percent while public sector workers were unionized at a rate of 34.4 percent.

While the participation rate in unions among the trades has shrunk overall, union membership did edge up slightly in 2017. If you’re a construction business owner, it’s likely you employ construction and trade workers who belong to unions. The LMRDA provides basic rights to those employees that you should keep in mind.

The Basic Rights of Union Members under LMRDA

The LMRDA empowers union members to hold unions to a specific set of standards and outlines their rights as members:

All union members must be given a copy of any collective bargaining contract affecting their rights.
All union members must be given information on the financial and administrative transactions and practices of the union.
Members are entitled to free and democratic officer elections and removal of officers.
The union may raise dues only by democratic procedures, such as a vote by union members.
Union officials have a legally binding fiduciary responsibility that can be enforced by the members in civil court.

Employer Responsibilities under LMRDA

Employers are required to report certain activities and expenditures via Department of Labor Form LM-10, including financial transactions with unions, union officials, and agents. Under the Obama Administration, a rule was added requiring the employer to report any agreement or arrangement with a third-party consultant hired to “persuade employees as to their collective bargaining rights or to obtain…information concerning the activities of employees or a labor organization in connection with a labor dispute involving the employer.”

Labor relations consultants also must report (on Form LM-20) about these types of agreements. If you neglect to file an LM-10 as an employer, the Department of Labor may still receive notification from your consultant. It is in your best interests to ensure your LM-10 is filed to avoid problems.

There is an exemption (LMRDA section 203c), however, stating no one is required to file a report covering the services of a consultant “by reason of his giving or agreeing to give advice to the employer.”

What is the Persuader Rule?

During the Obama administration, the so-called “Persuader Rule” was proposed. The Persuader Advice Exemption Rule would have eliminated the “advice exemption” of the LMRDA. Employers and consultants would be required to file reports for virtually all persuader activities, not just speaking to workers. Activities like scripting what managers and supervisors say to workers would be included as well.

In November 2016, a senior US District Court judge declared that this rule runs afoul of attorney-client privilege and may prevent small and mid-sized companies without in-house legal teams from obtaining legal consultation regarding unionization. The Department of Labor has since rescinded this rule. Some lawmakers are attempting to have it re-enacted, but it is considered unlikely a bill containing this action will make it out of committee.

Current status: employers and consultants are limited to reporting a specific list of activities rather than the wholesale reporting of all relations between them.

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