ABC - ABC Opposes Rescission of Union Financial Reporting Rule

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ABC OPPOSES RESCISSION OF UNION FINANCIAL REPORTING RULE (06/24/2009)

ABC June 22 filed comments with the U.S. Department of Labor (DOL) Office of Labor-Management Standards opposing the rescission of the final rule that revises the current LM-2 financial disclosure form for larger unions. In addition, the rule establishes a procedure to revoke the LM-3 form filed by smaller unions in instances where filers submit delinquent or erroneous reports.

In its comments, ABC noted that rescinding the rule before DOL has completed the review will make it difficult to reinstate the final rule if it is determined that it is needed.

“Indeed, it is highly foreseeable that a premature rescission of the final rule, i.e., a rescission which occurs before the Department completes its further consideration, could be highly detrimental not only to union members, but also the public and government…unless the Department’s further consideration is actually completed and also vetted for public comment, the Department could easily and appropriately be accused of having prejudged the outcome of this rulemaking,” ABC stated.

The comments also pointed out that DOL seems to be placing more emphasis on union autonomy instead of union transparency and has moved away from protecting the individual union members and the public despite House and Senate reports showing that corporate interests do not always coincide with or serve the interests of the members.

DOL received at least two comments from union members voicing support for the additional reporting requirements which the final rule would impose. ABC stated that although unions claim members have access to financial information, that information can be hard to get.

In its comments, ABC listed 39 court cases in which unions denied members access to financial information and stated “…because the interests of union organizations do not always coincide with the interests and needs of their individual union members, it was – and remains – necessary to ensure the availability and access to ‘all of the vital information necessary for them [the union members] to take effective action in regulating affairs of their trade union, either through voluntary compliance of the labor organization with the reporting requirements of the act or as a result of investigation and reports by the Secretary of Labor.’”

ABC also pointed to a recent study by George Mason University’s Olin Institute that used LM-2 filings to uncover more than $1 billion in union member wages that were spent on job targeting.

“Union job targeting expenditures, as well as union expenditures for many other union programs, are aimed at and have a direct, adverse impact on the business opportunities of ABC member companies,” ABC stated in its comments. “Therefore, ABC’s members (and ABC on their behalf) have an even greater interest in wanting to ensure that the Department does not depart from, or undermine, Congress’ call for full disclosure by the unions of their financial transactions, including the details of those transactions.”

ABC concluded by stating that it doesn’t appear that DOL is interested in dissenting opinions.

“Despite the Secretary’s proclamation to members of the American Federation of State, County and Municipal Employees (AFSCME) that there was a “new sheriff in town” it appears quite clear that the outcome of this rulemaking was predetermined,” the comments stated. “ABC strongly opposes rescission of the January 21 Final Rule. The conclusions which the Department reached and expressed in the final rule were correct, and they are supported by the fuller examination of the Labor Management Relations Disclosure Act (LMRDA) legislative history. The final rule was necessary and its timely implementation is needed in order to carry out the Department’s statutory mandate to combat union-related corruption.”

To read the complete comments, click here.

For more information, contact Bob Hirsch at ABC, Hirsch@abc.org.

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