• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Labor Department Rolls Back Transparency for Unions

    President Obama promised to run the most open and transparent Administration in history. However, his Department of Labor (DOL) just announced more regulations rolling back financial transparency for labor unions.

    Congress passed the Labor-Management Reporting and Disclosure Act (LMRDA) in 1959 following hearings documenting links between labor unions and organized crime. The act requires unions to publicly disclose how they spend their members’ money. Congress believed that this would discourage malfeasance and enable union members to hold their leaders accountable.

    Until recently, however, the act did little to achieve these goals. For four decades the DOL required only aggregated financial reports that provided no meaningful disclosure while permitting large loopholes that allowed unions to avoid disclosure.

    Secretary Elaine Chao made a point of fixing these problems. Under her leadership, the DOL tightened disclosure requirements and closed loopholes. One of Chao’s reforms was strengthening the LM-30 conflict-of-interest reporting forms.

    The LMRDA requires union officers to disclose payments they receive from their employers. Perhaps there is a good reason for an employer to be cutting checks to union officers, but Congress reasoned that union members ought to know about it.

    Unfortunately, the old version of the LM-30 excluded numerous union officers and forms of compensation. Many unions negotiate contracts that allow select employees to take paid leave to conduct union business. This is a quite valuable benefit for unions, one they are often willing to make bargaining concessions—such as lower wages—to get. Union leave can also be misused to create comfortable no-show jobs for union favorites.

    Secretary Chao required union officers to disclose how much union leave they received. In the vast majority of cases, union leave use will be perfectly legitimate, but Chao believed that workers should be able to evaluate that for themselves.

    Chao also required union shop stewards to file the LM-30 forms. Union stewards are employees of a company who also act as union officials. For example, stewards might represent workers in grievance complaints against the company. Previously the regulations exempted stewards. Chao reasoned that workers should know if their representatives are also getting cash gifts from their employers.

    In addition, the DOL required union officers to report payments from union trust funds. Many unions operate trusts—such as worker training or strike benefit funds—for the intended benefit of their members. These funds are often run by union officers. Chao believed that payments from union trusts to union officers could pose a conflict of interest. Union officials might be tempted to help themselves to their members’ money. So the revised LM-30 form required union officers to disclose payments from union trusts. While most payments would be legitimate, the DOL wanted union members to be able to decide that for themselves.

    President Obama’s DOL just rolled back these reforms. Union officers will not have to report union leave benefits or payments from union trusts. Union stewards will not have to file at all. The new regulations will leave union members in the dark about union officers’ potential conflicts of interest.

    Union members want financial transparency: 89 percent of union members agree that unions should disclose their spending. In part, this is because 66 percent of union members believe their leaders mostly look out for themselves.

    Union members deserve to know whether the union officials who represent them truly represent them. The President should not turn out the lights shining on the union movement’s books.

    Posted in Featured [slideshow_deploy]

    6 Responses to Labor Department Rolls Back Transparency for Unions

    1. Lloyd Scallan says:

      "Transparency", from this president and administration? Is that a joke? How much longer before more American realize that Obama will say and do anything to get his socialist agenda pass the people? People must understand that the DOL, MLRB, etc. are acting on direct orders from the Obama administration. We must look past this distraction that attempts to deflect blame away from Obama. It's real simple, unions give millions of dollars in dues to Obama without general membership approval. In return Obama provides total protection and cover for unions to continue to operate outside the law.

    2. vicki says:

      IMPEACH him and Pelosi. They are doing everything they can to prevent job creation. Why doesn't congress do their job and get rid of this wanna be dictator? People, we have to vote in the right guy next year and get rid of the other crap in office. Cain/Paul

    3. madog2 says:

      It's obvious that the unions are controling the Wh and a big part of the government,so why don't they just unionize the government. Of course I can't think of any better benefits to be gained than what they already have.

    4. Slick says:

      BUT as we all KNOW, our President is for open, transparent government operation, AND he swore not only to uphold the Constitution but the Rule of Law. And he has done a D*MN fine job of it, too!!!!! Right??? RIGHT???

      I keep hearing that the POTHUS still has nearly 50% of Americans backing him, and I am asking myself why. The only answer has to be because they honestly believe that there will be manna from heaven with this guy in charge . . . . appropriately called "Obama Dollars" in entitlement programs and all kinds of new freebies for select groups of people. This class warfare that Big O has waged on the American people is disgraceful!

      We need to ask ourselves before going to the polls in November, 2012: "Am I better off today than I was four years ago?" And if the answer is no, then we better vote accordingly because I don't think we can overcome four more years of this traitor and his henchmen!

    5. Mike, Wichita Falls says:

      The general delegation of rule-making and regulation-writing by Congress to the bureaucracies really bothers me. It seems that Congress uses vague language that is subject to the whims of the current administration. Is it rule of law or rule of men?

      So Congress passes a law in 1959 that gives the DOL authority to regulate disclosure of union finances. Does that authority mandate a strong LM-30 form, as implemented by Secretary Chao, a weak one, as implemented by Secretary Solis or anything in between? Suppose, just for argument's sake, a President Cain-appointed secretary rolled back the weak form to the last strong form, or implemented an even stronger one. Is that discretion within the law?

      This example applies to all laws, both federal and state. Besides repeal of vague laws and passage of clear laws, what is the people's recourse against the rule of men?

    6. Bobbie says:

      can I just squeeze something in here about the Herman Cain attack? I'm sure there's a union behind it? I just want to say for any person to take literal words and twist them into an offense to themselves, should be publically humiliated. And for any person who wants to publically breach their signed contract of confidentiality should also be publically humiliated. The timing regards urgency on "their" part! "we'll only use it when…"

      Mr. Cain only knew about it 10 days before without knowing the details of the confrontation. He afforded to do what he could to defend himself against this desperate, deliberate deterrence brought on by jealousy and fear of this man's American patriotism who's strength in dignity rose above all and anything in his way!

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×