36106 Federal Register / Vol. 72, No. 126 / Monday, July 2, 2007 / Rules and Regulations 

DEPARTMENT OF LABOR 

Office of Labor-Management 

Standards 

29 CFR Part 404 

RIN 1215–AB49 

Labor Organization Officer and 

Employee Report, Form LM–30 

AGENCY: Office of Labor-Management 

Standards, Employment Standards 

Administration, Department of Labor. 

ACTION: Final rule. 

SUMMARY: The Employment Standards 

Administration’s (‘‘ESA’’) Office of 

Labor-Management Standards 

(‘‘OLMS’’) of the Department of Labor 

(‘‘Department’’) publishes this Final 

Rule to revise the Form LM–30, Labor 

Organization Officer and Employee 

Report, its instructions, and related 

provisions in the Department’s 

regulations. The Form LM–30 

implements section 202 of the LaborManagement Reporting and Disclosure 

Act of 1959 (‘‘LMRDA’’ or ‘‘Act’’), 29 

U.S.C. 432, whose purpose is to require 

officers and employees of labor 

organizations to report specified 

financial transactions and holdings to 

effect public disclosure of any possible 

conflicts between their personal 

financial interests and their duty to the 

labor union and its members. This rule 

clarifies the Form LM–30 and its 

instructions by explaining key terms 

and providing examples of the financial 

matters that must be reported, 

eliminates or modifies administrative 

exceptions in the old Form LM–30 that 

impeded the full disclosure of financial 

matters that constitute conflicts, or 

potential conflicts, of interest, and 

improves the usability of the reports by 

union members and the public. 

DATES: Effective Date: This rule will be 

effective August 16, 2007. 

FOR FURTHER INFORMATION CONTACT: Kay 

H. Oshel, Director, Office of Policy, 

Reports, and Disclosure, Office of LaborManagement Standards, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Room N–5609, 

Washington, DC 20210, olmspublic@dol.gov, (202) 693–1233 (this is 

not a toll-free number). Individuals with 

hearing impairments may call 1–800– 

877–8339 (TTY/TDD). 

SUPPLEMENTARY INFORMATION: An outline 

of this information and a note regarding 

the references to statutory provisions in 

this document follow: 

Table of Contents 

I. Background 

A. Statutory Authority 

B. Departmental Authorization 

C. Background to and Overview of Rule 

1. The Reasons for Today’s Revisions of the 

Form LM–30 

2. Legislative History 

II. Discussion of Comments Received on 

Proposed Rule and Department’s 

Response 

A. Why the Changes to the Form Are 

Needed Now 

B. Why the Department Is Not Presently 

Requiring Unions To Notify Their 

Officers and Employees (‘‘Officials’’) 

About Their Annual Reporting 

Obligations 

C. Why the De Minimis Exemption From 

Reporting Insubstantial Gifts and Other 

Financial Benefits Has Been Simplified 

and Subjected to a $250 Limit, With an 

Exclusion for Gifts Valued at $20 or Less 

and Certain Widely-Attended Gatherings 

D. Why Reporting Exceptions Permitted 

Under the Old Rule Have Been 

Eliminated or Modified To Provide More 

Information to Union Members 

1. Regular Course of Business Exception 

2. Bona Fide Employee Exception for 

Transactions With an Employer Whose 

Employees the Official’s Union 

Represents or Is Actively Seeking To 

Represent 

3. Exception for Bona Fide Loans or 

Interest From a Banking Institution 

4. Exceptions Relating to Stocks 

5. Revision of Special Report Language 

E. Why Union Officials, as a General Rule, 

Must Report Payments Received as 

Members of a Company’s Board of 

Directors 

F. Why Officers of International, National, 

and Intermediate Labor Unions, in 

Addition to Their Obligation to Report 

Payments and Other Financial Benefits 

Received From Businesses and 

Employers That Have a Direct 

Relationship With the Component of the 

Union to Which They are Elected or 

Appointed, Must Also Report Payments 

and Other Financial Benefits Received 

From Businesses and Employers Whose 

Relationship is With a Subordinate Body 

of Their Union 

G. Why Union Officials Must Report 

Payments Under Union—Leave and NoDocking Practices Subject to an 

Exception for Payments of 250 Hours or 

Less Per Year Made in Accordance with 

a Collective Bargaining Agreement 

H. What Payments and Other Financial 

Benefits, Received From an Employer or 

Business Whose Employees are not 

Represented by the Union and Which 

Does Not Conduct Business With the 

Official’s Union, Must be Reported 

I. When is a Union ‘‘Actively Seeking To 

Represent’’ Employees, Thereby 

Triggering a Union Official’s Obligation 

To Report Payments and Other Financial 

Benefits Received From the Employer 

That is the Subject of the Organizing 

Drive 

J. How Union Officials Will Determine 

Whether an Entity From Which They 

Receive a Payment or Other Financial 

Benefit Does a ‘‘A Substantial Part’’ of its 

Business With an Employer Whose 

Employees are Represented by the 

Official’s Union or the Union it is 

Actively Seeking to Represent 

K. Why Payments and Other Financial 

Benefits Received From Section 3(l) 

Trusts and Service Providers to Such 

Trusts Must Be Reported 

1. Alleged Procedural Shortcoming 

2. Routine Exceptions 

3. Relationship With Other Statutes 

4. Trusts as Employers and Businesses 

L. When Payments and Other Financial 

Benefits Received From a Union Other 

Than an Official’s Own Union Must be 

Reported 

M. How the Proposed Definitions Have 

Been Clarified To Ease a Filer’s 

Completion of the Form LM–30 

1. Definitions Adopted by Today’s Rule 

2. Other Issues Related to Definitions 

N. Details Relating To Proposed and 

Revised Form and Instructions 

1. Comparison of the ‘‘Old’’ and Proposed 

Forms 

2. Comments on Proposed Form 

3. Completion of the Revised Form 

III. Regulatory Procedures 

A. Executive Order 12866 

B. Small Business Regulatory Enforcement 

Fairness Act 

C. Unfunded Mandates Reform 

D. Executive Order 13132 (Federalism) 

E. Regulatory Flexibility Act 

F. Paperwork Reduction Act 

G. Executive Order 13045 (Protection of 

Children From Environmental Health 

Risks and Safety Risks) 

H. Executive Order 13175 (Consultation 

and Coordination With Indian Tribal 

Governments) 

I. Executive Order 12630 (Governmental 

Actions and Interference With 

Constitutionally Protected Property 

Rights) 

J. Executive Order 12988 (Civil Justice 

Reform) 

K. Environmental Impact Assessment 

L. Executive Order 13211 (Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use) 

IV. Text of Final Rule 

Appendix 

Note: Throughout this document, the 

Department refers to various statutory 

provisions as ‘‘section ll.’’ All such 

references, unless otherwise noted, are to 

Title 29 of the U.S. Code. Further, unless 

otherwise noted, all the sections are part of 

the Labor-Management Reporting and 

Disclosure Act of 1959, which is set forth in 

Chapter 11 of Title 29, 29 U.S.C. 401–531. 

Following is a list of the most frequently 

cited LMRDA provisions in this document 

with corresponding citations to the U.S. 

Code: section 3(l), 29 U.S.C. 402(l); 201, 29 

U.S.C. 431; section 202, 29 U.S.C. 432; and 

section 203, 29 U.S.C. 433. The only other 

provision of the U.S. Code frequently referred 

to in the document by the section number in 

the public law in which it was enacted is 

‘‘section 302(c),’’ a reference to a provision of 

the Labor Management Relations Act, as 

amended, 29 U.S.C. 141–188. A reference to 


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section 302(c), 29 U.S.C. 186(c), appears in 

the text of section 202(a)(6) of the LMRDA, 

29 U.S.C. 432(a)(6). 

I. Background 

A. Statutory Authority 

Section 208 of the LMRDA states in 

part: 

The [Department] shall have authority to 

issue, amend and rescind rules and 

regulations prescribing the form and 

publication of reports required to be filed 

under this title and such other reasonable 

rules and regulations (including rules 

prescribing reports concerning trusts in 

which a labor organization is interested) as 

he may find necessary to prevent the 

circumvention or evasion of such reporting 

requirements. 

29 U.S.C. 438. Today’s rule prescribes 

the disclosure form required to be filed 

by a union officer or employee if such 

an official, his or her spouse, or minor 

child hold an interest in or receive 

payments from certain entities. The 

reporting requirements are contained in 

section 202, which provides in its 

entirety: 

§ 202. (a) Every officer of a labor 

organization and every employee of a labor 

organization (other than an employee 

performing exclusively clerical or custodial 

services) shall file with the Secretary a signed 

report listing and describing for his 

preceding fiscal year—

(1) Any stock, bond, security, or other 

interest, legal or equitable, which he or his 

spouse or minor child directly or indirectly 

held in, and any income or any other benefit 

with monetary value (including reimbursed 

expenses) which he or his spouse or minor 

child derived directly or indirectly from, an 

employer whose employees such labor 

organization represents or is actively seeking 

to represent, except payments and other 

benefits received as a bona fide employee of 

such employer; 

(2) Any transaction in which he or his 

spouse or minor child engaged, directly or 

indirectly, involving any stock, bond, 

security, or loan to or from, or other legal or 

equitable interest in the business of an 

employer whose employees such labor 

organization represents or is actively seeking 

to represent; 

(3) Any stock, bond, security, or other 

interest, legal or equitable, which he or his 

spouse or minor child directly or indirectly 

held in, and any income or any other benefit 

with monetary value (including reimbursed 

expenses) which he or his spouse or minor 

child directly or indirectly derived from, any 

business a substantial part of which consists 

of buying from, selling or leasing to, or 

otherwise dealing with, the business of an 

employer whose employees such labor 

organization represents or is actively seeking 

to represent; 

(4) Any stock, bond, security, or other 

interest, legal or equitable, which he or his 

spouse or minor child directly or indirectly 

held in, and any income or any other benefit 

with monetary value (including reimbursed 

expenses) which he or his spouse or minor 

child directly or indirectly derived from, a 

business any part of which consists of buying 

from, or selling or leasing directly or 

indirectly to, or otherwise dealing with such 

labor organization; 

(5) Any direct or indirect business 

transaction or arrangement between him or 

his spouse or minor child and any employer 

whose employees his organization represents 

or is actively seeking to represent, except 

work performed and payments and benefits 

received as a bona fide employee of such 

employer and except purchases and sales of 

goods or services in the regular course of 

business at prices generally available to any 

employee of such employer; and 

(6) Any payment of money or other thing 

of value (including reimbursed expenses) 

which he or his spouse or minor child 

received directly or indirectly from any 

employer or any person who acts as a labor 

relations consultant to an employer, except 

payments of the kinds referred to in section 

302(c) of the Labor Management Relations 

Act, 1947, as amended. 

(b) The provisions of paragraphs (1), (2), 

(3), (4), and (5) of subsection (a) shall not be 

construed to require any such officer or 

employee to report his bona fide investments 

in securities traded on a securities exchange 

registered as a national securities exchange 

under the Securities Exchange Act of 1934, 

in shares in an investment company 

registered under the Investment Company 

Act or in securities of a public utility holding 

company registered under the Public Utility 

Holding Company Act of 1935, or to report 

any income derived therefrom. 

(c) Nothing contained in this section shall 

be construed to require any officer or 

employee of a labor organization to file a 

report under subsection (a) unless he or his 

spouse or minor child holds or has held an 

interest, has received income or any other 

benefit with monetary value or a loan, or has 

engaged in a transaction described therein. 

B. Departmental Authorization 

Section 208 of the Act, 29 U.S.C. 438, 

provides that the Secretary of Labor 

shall have the authority to issue, amend, 

and rescind rules and regulations 

prescribing the form and publication of 

reports required to be filed under Title 

II of the Act and such other reasonable 

rules and regulations as she may find 

necessary to prevent the circumvention 

or evasion of the reporting 

requirements. Secretary’s Order 4–2007, 

issued May 2, 2007, and published in 

the Federal Register on May 8, 2007 (72 

FR 26159), contains the delegation of 

authority and assignment of 

responsibility of the Secretary’s 

functions under the LMRDA to the 

Assistant Secretary for Employment 

Standards and permits the redelegation 

of such authority. 

C. Background to and Overview of Rule 

In today’s rule, the Department 

revises the Form LM–30, Labor 

Organization Officer and Employee 

Report based on its review of public 

comments received in response to its 

Notice of Proposed Rulemaking 

(‘‘NPRM’’), 70 FR 51166 (Aug. 29, 2005). 

The Form LM–30 is used by officers and 

employees of labor organizations subject 

to the LMRDA. Section 202 of the Act 

requires public disclosure of certain 

financial interests held, income 

received, and transactions engaged in by 

labor organization officers and 

employees (generally referred to herein 

as ‘‘union officials’’ or ‘‘officials’’) and 

their spouses and minor children. 

Subject to exclusions, these interests, 

incomes, and transactions include: 

1. Payments or benefits from, or 

interests in, an employer whose 

employees the filer’s union represents 

or is actively seeking to represent; 

2. Transactions involving interests in, 

or loans to or from, an employer whose 

employees the filer’s union represents 

or is actively seeking to represent; 

3. Interests in, income from, or 

transactions with a business a 

substantial part of which consists of 

dealing with an employer whose 

employees the filer’s union represents 

or is actively seeking to represent; 

4. Interests in, income from, or 

transactions with a business that deals 

with the filer’s union or a trust in which 

the filer’s union is interested; 

5. Transactions or arrangements with 

an employer whose employees the 

filer’s union represents or is actively 

seeking to represent; and 

6. Payments from an employer or 

labor relations consultant to an 

employer. 

As sometimes used herein, the shorthand phrase ‘‘payments or other 

financial interests’’ or its equivalent is 

used to refer to the various payments, 

transactions, arrangements and other 

monetary and financial interests that 

must be reported. Payments, as a general 

rule, include gifts, gratuities, restaurant 

meals, and entertainment. 

The Form LM–30 must be filed 

annually by a union officer or employee 

(other than those solely engaged in 

performing clerical or custodial duties) 

if the official, the official’s spouse, or 

minor child (or children) receives a 

payment or other financial interest from 

a business or employer in connection 

with certain activities, identified in 

section 202. Section 202’s disclosure 

obligations for union officials (as 

embodied in the Form LM–30) are an 

integral part of the Act’s reporting 

structure. The Act requires annual 

reports by unions as ‘‘institutions’’

under section 201 (Forms LM–2, LM–3, 

and LM–4), by employers, who must 


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report payments to unions and their 

representatives under section 203 (Form 

LM–10), and by unions for trusts in 

which they have an interest (‘‘section 

3(l) trusts,’’ a reference to section 3(l) of 

the Act defining such trusts) under 

sections 201 and 208 (Form T–1). 

In the NPRM the Department invited 

comment with respect to the benefits of 

the proposed changes, the ease or 

difficulty with which union officials 

would be able to comply with these 

changes, and whether the changes 

would be meaningful, useful, and in 

accord with the LMRDA disclosure 

purposes. The initial 60-day comment 

period provided for in the NPRM was 

subsequently extended to January 26, 

2006. 70 FR 61400 (Oct. 24, 2005). The 

Department received over 1,000 

comments. Of these comments about 50 

were unique; the rest were form letters. 

Almost 300 of the comments were from 

unions or union members, most of 

whom were critical of all or parts of the 

proposal; about 700 were from 

individuals who generally supported 

the proposal, about 25 were from 

business or trade organizations, who 

expressed diverse views on the 

proposal; about 10 were from law firms, 

on their own behalf or their clients, who 

mostly opposed the proposal; two were 

from benefit fund administrators, who 

opposed the proposal; and one was from 

an academic who reported on his 

limited study of the reactions of union 

officials to the proposed form and 

instructions from which he concluded 

these documents needed substantial 

improvement. Over 280 of the union 

commenters were members of one local. 

In their form letters, they urged rejection 

of the rule ‘‘in its entirety.’’ They 

characterized the proposed 

requirements as ‘‘frivolous.’’ They 

asserted that the existing form was 

adequate to ensure ‘‘due diligence’’ by 

union officials, adding that the 

proposed union-leave and no-docking 

requirements would turn shop stewards 

into accountants because of the duty to 

‘‘calculate their time.’’ Of the 

individuals supporting the proposal, the 

Department received about 660 form 

letters. These individuals asserted that 

such reforms were long overdue, noting 

that under the current form it is difficult 

to determine when a report is required 

and that the proposed form’s inclusion 

of clear definitions and examples would 

improve reporting. 

The historically low filing rates 

during the years preceding the initiation 

of this rulemaking process demonstrated 

substantial non-compliance with the 

Act. The Department recognized that its 

own compliance assistance efforts in 

this area needed improvement and thus 

it has retargeted its resources to educate 

the affected community about the Form 

LM–30 reporting obligation and to 

increase its enforcement efforts. At the 

same time as the Department was 

working on the proposed rule, it 

announced an initiative to improve 

Form LM–30 compliance. As part of this 

effort, the Department substantially 

augmented its published guidance to 

Form LM–30 filers, primarily by posting 

information on OLMS Web pages and by 

further disseminating this information 

by notifying subscribers to its free, 

automated list serve. On April 25, 2005, 

the Department announced a special 

enforcement policy under which new 

Form LM–30 filers, absent extraordinary 

circumstances, would not have to 

submit reports for prior years, even if 

such reports should have been filed. 

Specifically, the Department advised the 

regulated community that it would not 

require a new filer to submit reports 

covering the same financial interest for 

any prior years absent extraordinary 

circumstances. To take advantage of this 

grace period, the new filer had to submit 

his or her initial report voluntarily 

during a ‘‘grace period,’’ which ended 

August 15, 2005. With the substantial 

voluntary assistance of the AFL–CIO 

and other labor organizations to educate 

union officials about their reporting 

obligations, the Department experienced 

a large upsurge in the number of Form 

LM–30 filings over historical levels. To 

help union officials better understand 

their filing obligations, the Department 

proposed to change the instructions to 

the old form by defining and explaining 

key concepts and terms used by the 

statute and the form, and providing 

examples of situations where reporting 

is required. The Department also 

proposed to redesign the reporting 

format to better assist filers and improve 

the utility of the collected information 

to union members, the Department, and 

the general public. Following its review 

of the comments and taking into 

account the Department’s recent Form 

LM–30 filing experience—as requested 

by some commenters, the Department 

remains convinced that this approach is 

sound and therefore today’s rule 

preserves the overall approach outlined 

in the NPRM. At the same time, the 

comments were helpful in reconsidering 

some aspects of the rule and improving 

the content of the instructions and the 

form. The Department has revised the 

layout of the form. Instead of the 

subsection-by-subsection approach in 

the proposed form and instructions that 

parallels the structure of section 202 

and its subsections (i.e., sections 

202(a)(1) through 202(a)(6)), the rule 

organizes the form and instructions by 

the source of the reportable payment to 

a union official. Thus, the form lists the 

types of employer relationships that 

trigger a reporting requirement and the 

types of business relationships that 

trigger a reporting requirement. The 

instructions identify the types of 

payments and other financial interests 

that must be reported by a union official 

if received from an employer, 

differentiating between payments 

received from an employer whose 

employees the filer’s union represents 

or is actively seeking to represent and 

those received from certain other 

employers. The instructions also 

identify the types of payments that must 

be reported if received from businesses 

that maintain business dealings with the 

official’s union, a trust in which the 

official’s union is interested, or certain 

employers. In the NPRM, the 

Department requested comment on 

whether labor organizations should be 

required to notify their officers and 

employees of their Form LM–30 

reporting obligations. After review of 

the comments and the number of recent 

filers, the Department has decided to 

not require unions at this time to 

provide such notification to their 

officials. 

In the NPRM, the Department 

proposed to revise its longstanding de 

minimis exception by adopting a 

quantitative standard of $25 as the 

amount that would trigger a reporting 

obligation. Numerous comments 

attacked the $25 threshold as 

unreasonably low, while other 

commenters argued that there should be 

no de minimis level at all. The 

Department adopts $250 as the amount 

above which a report is required and 

$20 as the amount above which 

payments or benefits must be counted 

when calculating whether the union 

official’s $250 reporting threshold has 

been met. The rule also includes a 

limited exclusion for widely attended 

gatherings, allowing union officials to 

attend two such gatherings without 

incurring a reporting obligation 

provided the employer or business 

paying for the gathering spent $125 or 

less per attendee per gathering. 

One provision of the Act, section 

202(a)(6), may be read to impose a 

requirement on union officials to report 

payments from all employers. The 

Department’s proposal to construe this 

obligation in this manner was opposed 

by most of the comments that discussed 

this point. In light of these comments, 

today’s rule clarifies the scope of the 

reporting obligation under section 

202(a)(6), identifying particular 

situations that pose a conflict of interest 


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that otherwise would not be captured by 

the other five subsections of section 

202(a). 

The Department also proposed to 

remove certain administrative 

exceptions that were available to filers 

under the old rule: Purchases and sales 

in the regular course of business at 

prices generally available to any 

employee of the employer; work 

performed and payments and benefits 

received as a bona fide employee of the 

employer; certain loans; and specified 

interests relating to stock ownership. 

The rule generally adopts the proposals 

as set forth in the NPRM to narrow the 

scope of these exceptions and thus 

makes reportable interests and 

payments that present previously 

unreported potential conflicts of 

interest. 

The Department requested comment 

on whether to retain the distinction 

between securities traded on a 

registered national stock exchange and 

securities traded elsewhere, such as the 

NASDAQ stock market, notwithstanding 

the language in the Act limiting the 

exception to registered securities 

exchanges. See section 202(b) (ties 

exception to such exchanges registered 

under the Securities Exchange Act of 

1934 and other enumerated statutes). 

After reviewing the comments, the 

Department retains its interpretation 

that it should not extend this limited 

exception to exchanges that have not 

been registered. The Department, 

however, notes that on July 15, 2006, 

the Securities and Exchange 

Commission (‘‘SEC’’) approved 

NASDAQ’s application for registration 

as a national securities exchange, 

effective July 31, 2006. 

Payments received by union officials 

from employers for work done on the 

union’s behalf are reportable because 

such payments are not received as a 

bona fide employee of the employer 

making the payment. The Department 

explained in its proposal that union 

officials must report any payments for 

other than ‘‘productive work’’ for the 

employer, including union-leave and 

no-docking payments. Similarly, the 

proposed definition of ‘‘labor 

organization employee’’ clarified that an 

individual who is paid by an employer 

to perform union work is an employee 

of the union if he or she is under the 

control of the union, while so engaged. 

Today’s rule adopts the proposed 

definition of ‘‘bona fide employee’’ and 

‘‘labor organization employee,’’ making 

union-leave and no-docking payments 

reportable. However, today’s rule 

stipulates that if such payments are 

made pursuant to a collective bargaining 

agreement and the payments are made 

for 250 or fewer hours during the year 

then there is no reporting obligation. 

The meaning given ‘‘labor 

organization’’ defines the scope of a 

union official’s obligation to report 

interests in or payments by certain 

employers and businesses. Essentially 

the question presented by the 

Department’s proposal is whether this 

obligation applies to only an official’s 

immediate organization, e.g., a local 

union or international union in which 

he or she holds office, or whether it 

extends to situations involving 

organizations affiliated with the 

immediate organization. For instance, is 

an international officer required to 

report payments received from a 

business that sells products or services 

to intermediate and local affiliates or 

from employers whose employees are 

represented by a subordinate union? 

Under today’s rule, an international 

union officer must report such 

payments. The same obligation exists 

under the old rule. Today’s rule further 

clarifies that the same reporting 

obligation applies to payments received 

by an intermediate union officer. The 

Department, however, does not impose 

a reporting obligation on local or 

intermediate union officials who receive 

payments from an entity that does 

business with a higher affiliated 

organization. The rule also excepts 

employees of international, national, 

and intermediate unions from this 

reporting requirement. Further, the 

reporting obligation on officers of 

national and intermediate unions does 

not extend to payments received as 

employment compensation by their 

spouse or minor child that otherwise 

would be reportable because of the 

payer’s relationship with a subordinate 

union. 

Although the Department’s old rule 

applies to payments received from a 

section 3(l) trust and the Department 

proposed no departure from this rule, 

numerous comments were received 

arguing that the Form LM–30 reporting 

obligation has never been applied to 

payments by trusts to union officials. 

These commenters are mistaken. The 

Department always has maintained the 

position that payments from trusts and 

vendors to such trusts enjoy no special 

excepted status under the Act’s 

reporting provisions. Some commenters 

argued that such reporting would only 

be duplicative of reporting already 

required by ERISA and could discourage 

union trustees from attending 

conferences designed to educate trustees 

about their duties as trustees. The 

Department believes that the concerns 

about burden and overlap with ERISA 

disclosure requirements are overstated. 

In light of the comments, however, 

today’s rule clarifies that a payment by 

a trust is treated no differently than 

other payments by an employer or a 

business to union officials. 

Section 202(a)(3) imposes a limited 

reporting obligation on a union official 

who has an interest in or receives 

payments from a business that buys, 

sells, leases, or otherwise deals with the 

business of an employer if the latter’s 

employees are represented by the 

official’s union or it is actively seeking 

to represent these employees. The 

obligation attaches only if the vendor’s 

dealings with the employer comprise a 

‘‘substantial part’’ of the vendor’s 

business. The Department proposed to 

define ‘‘substantial’’ as more than 5% of 

the vendor’s business. Most of the 

comments criticized the threshold as too 

low. Today’s rule sets the threshold at 

10%. 

In addition to some of the terms 

discussed above, the Department has 

clarified some of the proposed 

definitions. By clarifying these terms 

and the concepts that underlie the Act’s 

reporting provisions, the rule ensures 

transparency in the personal financial 

affairs of union officials that may pose 

conflicts between the official’s duty to 

their union and its members and the 

official’s personal interests. 

A number of comments were received 

from employer and industry 

associations. Most of these comments 

focused on the obligation of employers 

to file a Form LM–10 on certain 

payments made by employers or labor 

relations consultants to unions or union 

officials. Today’s rule is specific to 

Form LM–30 filers. It does not amend 

the Department’s current regulations or 

guidance specific to the Form LM–10. 

The Department, however, has carefully 

considered all the comments submitted 

by these groups and addresses them 

herein insofar as they address particular 

aspects of the Form LM–30 proposal. 

Form LM–10 Frequently Asked 

Questions (FAQs) on the OLMS Web 

site at http://www.olms.dol.gov informs 

the public that the Department will not 

enforce certain Form LM–10 reporting 

requirements until both the Form LM–

30 rulemaking is completed and further 

written guidance is issued on the Form 

LM–10. This written guidance will be 

issued in revisions to the FAQs that will 

be announced through the OLMS list 

serve which can be subscribed to at 

http://www.dol.gov/esa/aboutesa/org/ 

olms/olms-mailinglist.htm. 

1. The Reasons for Today’s Revisions of 

the Form LM–30 

The Form LM–30 has remained 

essentially unchanged since 1963. 


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During this time, there have been many 

significant changes in the ways in 

which unions operate and conduct their 

financial affairs. Individuals too have 

more and varied financial interests than 

was the case forty years ago. As 

explained in the NPRM, many unions 

manage benefit plans for their members, 

maintain close business relationships 

with financial service providers such as 

insurance companies and investment 

firms, operate revenue-producing 

subsidiaries, and participate in 

foundations and charitable activities. 

The complexity of these financial 

practices, including business 

relationships with outside firms and 

vendors, increases the likelihood that 

union officials may have interests in, or 

receive income from, these businesses. 

As more labor organizations conduct 

their financial activities through 

sophisticated trusts, increased numbers 

of businesses have commercial 

relationships with such trusts, creating 

financial opportunities for union 

officers and employees who may 

operate, receive income from, or hold an 

interest in such businesses. In addition, 

employers also have fostered multifaceted business interests, creating 

further opportunities for financial 

relationships between employers and 

union officers and employees. In this 

context, disclosure is critical to 

promoting good union governance, 

fostering ethical behavior, and deterring 

and detecting self-dealing. 

As noted in the NPRM, on many 

occasions the Department has 

discovered during an audit or 

investigation that a union officer or 

employee received a reportable payment 

or other financial benefit but had failed 

to file the Form LM–30 as required. The 

Department identified several such 

situations in the NPRM, including the 

following: 

• A local president owned 50% of a 

business that resurfaced the union’s 

parking lot. Over two years, the business 

received $9,000 from the union. 

• A union designated certain 

attorneys to represent injured members. 

Some of these attorneys, who were 

employers, furnished cash or items of 

value such as trips and golf clubs to 

union officials. 

• A union hired the accounting firm 

of an employee’s spouse. The firm 

received over $29,000 from the union 

over two years. 

• An officer of a union, whose 

members worked at a theater, formed a 

business with two partners. He put his 

share of the business in his wife’s name 

although he actually managed the 

business, which employed members of 

his local to work for the theater. He and 

his wife received almost $75,000 in 

profits, expense reimbursements, and 

salary from the business. 

• A union president owned the 

building in which the union rented 

office space. 

• A union employee’s spouse owned 

an advertising company that printed 

materials for the union and its funds. In 

one year, the company received over 

$245,000 as payment for her company’s 

services. 

• Four local officers formed a 

company that provided payroll services 

to the local as well as to theatrical 

companies that employed members of 

the local. Two other officers of the local 

received over $20,000 as employees of 

the company. 

• The spouse of a union officer 

owned a company that provided 

cleaning and maintenance services to 

the union and a trust in which the 

union was interested. In one year, the 

company received over $94,000 from 

the union and the trust. 

• A union officer’s spouse owned a 

janitorial business that provided daily 

janitorial services to the union at $800 

per month. 

• A union officer was part-owner, 

along with his wife and daughter, of a 

copier supply company. He was an 

officer of several unions, including one 

that employed his daughter as a benefit 

representative and union trustee. All of 

the unions purchased office equipment 

and services from the family’s company. 

• During a campaign for a State 

government office, a business agent 

received contributions from employers 

who were covered by the union’s 

collective bargaining agreement. 

• A union employee owned a heating 

and air conditioning business that 

performed HVAC work for the union. 

In these instances, compliance with 

the Form LM–30 requirements would 

have provided union members with 

valuable information concerning 

financial practices of their unions’

officials. This information would have 

assisted union members in evaluating 

the efficacy of the work performed by 

union employees and the leadership 

provided by union officers. 

Furthermore, the information would 

have alerted them to potential conflicts 

of interests and guided them as to which 

actions or decisions of their officers and 

employees might require greater 

scrutiny in order to determine whether 

the conflicts had affected the union 

official’s service to the union. Armed 

with this information, union members 

could express their concerns at 

membership meetings, see section 

101(a), 29 U.S.C. 411(a), evaluate the 

use of union monies as reported on the 

union’s annual financial report, see 

section 201(b), 29 U.S.C. 431(b), cast 

more informed votes at internal union 

elections, see sections 401–403, 29 

U.S.C. 481–483, employ union 

procedures for removal of officers guilty 

of serious misconduct, see section 

401(h), 29 U.S.C. 481(h), and exercise 

their right to obtain judicial relief for 

violations of the official’s fiduciary 

responsibilities. See section 501(b), 29 

U.S.C. 501(b). 

In other instances, as described in the 

NPRM, compliance with Form LM–30 

requirements would have revealed 

criminal conduct. For example, the 

president of a national union had the 

sole authority to appoint or remove 

attorneys from a list of ‘‘Designated 

Legal Counsel.’’ These attorneys 

represented injured union members 

who sought compensation from the 

railroad for on-the-job injuries. Rather 

than selecting attorneys on the basis of 

their skills, the president awarded the 

designation to attorneys who gave the 

union president cash or other things of 

value. In another instance, contractors 

were hired to make repairs and 

improvements to the offices of a local 

union. The contractors also performed 

work on the officers’ homes. All the 

expenses of the work, including about 

$1.2 million for work on the officers’

homes, was charged to and paid by the 

union. A third example involved a 

contractor, an investment firm that 

managed pension and investment 

accounts for unions. This company 

collapsed in September 2000, costing its 

clients about $355 million. The 

company’s former chairman was 

indicted on counts of fraud, money 

laundering, witness tampering, and 

making illegal payments to union 

benefit plan trustees. As part of its 

scheme to buy the influence of pension 

fund trustees, who were union officers, 

the investment firm hired relatives of 

pension trustees as well as provided 

plan trustees with gifts including rifles, 

season tickets to sporting events, and 

fishing and hunting trips to various 

locations in the western U.S., Canada, 

Africa, Argentina and Mexico. 

As the above incidents demonstrate, a 

statement made in 1986 continues to 

ring true: ‘‘The plunder of union 

resources remains an attractive [target 

for certain individuals and 

organizations]. * * * The most 

successful devices are the payment of 

excessive salaries and benefits to * * * 

union officials and the plunder of 

workers’’ health and pension funds.’’

President’s Commission on Organized 

Crime, Report to the President and 

Attorney General, The Edge: Organized 

Crime, Business, and Labor Unions 


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(1986), at 12. Added transparency about 

a union official’s conflicts of interest 

will help ensure that all union officials 

keep paramount the interests of their 

union and its members. Most union 

officials will never be tempted to 

subordinate their union’s interests to 

their own financial interests; the rule 

will help them avoid the perception that 

their financial interests, left unreported 

through inadvertence or 

misunderstanding, may engender unfair 

suspicion. Others, though tempted, will 

be deterred from taking such action. See 

Archibald Cox, Internal Affairs of Labor 

Unions Under the Labor Reform Act of 

1959, 58 Mich.L.Rev. 819, 827 (1960) 

(‘‘Internal Affairs of Labor Unions’’) 

(‘‘The official whose fingers itch for a 

‘‘fast buck’’ but who is not a criminal 

will be deterred by the fear of 

prosecution if he files no report and by 

fear of reprisal from the members if he 

does’’). 

The Form LM–30 has been redesigned 

to facilitate full and accurate completion 

by the filer and review by members of 

the filer’s union and the public. The 

instructions now contain useful 

definitions of key terms and concepts 

required to complete the form and 

numerous practical examples to assist 

filers in completing the form. Union 

officials will also better understand the 

disclosure obligations relating to actual 

or potential conflicts of interest and will 

be mindful of their duty to hold their 

union’s interests above their own 

personal financial interests. Financial 

transparency, as noted above, also may 

deter fraud and self-dealing and 

facilitates discovery of such misconduct 

when it occurs. Transparency promotes 

the unions’ own interests as democratic 

institutions. By these improvements, 

union members will obtain a more 

accurate picture of the personal 

financial interests of their union’s 

officers and employees, as those 

interests may bear upon their actions on 

behalf of the union and its members. 

With this information, union members 

will be better able to understand any 

financial incentives or disincentives 

faced by their union’s officers and 

employees and to make more informed 

choices about the leadership of their 

union and its management of its affairs. 

Through these actions, the Department 

advances the LMRDA’s declared 

purpose ‘‘that labor organizations, 

employers, and their officials adhere to 

the highest standards of responsibility 

and ethical conduct in administering 

the affairs of their organizations.’’

Section 2(a). As such, today’s rule will 

better achieve the purposes of the 

LMRDA than the old reporting regimen. 

2. Legislative History 

To better understand the purposes 

served by disclosure, a brief review of 

the history of the LMRDA’s reporting 

and disclosure requirements for union 

officials is appropriate. As explained in 

the NPRM, at 70 FR 51166, the LMRDA 

was passed in 1959 by a bipartisan 

Congress that found: In labor and 

management fields: 

[T]here have been a number of instances of 

breach of trust, corruption, disregard of the 

rights of individual employees, and other 

failures to observe high standards of 

responsibility and ethical conduct which 

require further and supplementary legislation 

that will afford necessary protection of the 

rights and interests of employees and the 

public generally as they relate to the 

activities of labor organizations, employers, 

labor relations consultants, and their officers 

and representatives. 

Section 2(a). 

The legislation was the direct 

outgrowth of a Congressional 

investigation conducted by the Select 

Committee on Improper Activities in the 

Labor or Management Field, commonly 

known as the McClellan Committee, 

chaired by Senator John McClellan of 

Arkansas. In 1957, the committee began 

a highly publicized investigation of 

union racketeering and corruption; its 

findings of financial abuse, 

mismanagement of union funds, and 

unethical conduct provided much of the 

impetus for enactment of the LMRDA’s 

remedial provisions. See generally 

Benjamin Aaron, The LaborManagement Reporting and Disclosure 

Act of 1959, 73 Harv. L. Rev. 851, 851–

55 (1960). During the investigation, the 

committee uncovered a host of improper 

financial arrangements between officials 

of several international and local unions 

and employers (and labor consultants 

aligned with the employers) whose 

employees were represented by the 

unions in question or might be 

organized by them. Similar 

arrangements also were found to exist 

between union officials and the 

companies that handled matters relating 

to the administration of union benefit 

funds. See generally, Interim Report of 

the Select Committee on Improper 

Activities in the Labor or Management 

Field, S. Report No. 85–1417 (1957) 

(‘‘Interim Report’’). For examples of 

some of the improper arrangements 

directly or indirectly involving officials 

of these unions, see Interim Report, pp. 

42–86, 122–30, 150–57, 222–55, 376–

420, 441–50. See also Robert F. 

Kennedy, The Enemy Within (1960) 

(discussing the committee’s 

investigation). 

The statute was designed to remedy 

these various ills through a set of 

integrated provisions aimed at union 

governance and management. These 

included a ‘‘bill of rights’’ for union 

members, which provides for equal 

voting rights, freedom of speech and 

assembly, and other basic safeguards for 

union democracy, see sections 101–105 

of the LMRDA, 29 U.S.C. 411–415, 

financial reporting and disclosure 

requirements for unions, union officers 

and employees, employers, labor 

relations consultants, and surety 

companies, see sections 201–206 and 

211 of the LMRDA, 29 U.S.C. 431–436, 

441; detailed procedural, substantive, 

and reporting requirements relating to 

union trusteeships, see sections 301–

306 of the LMRDA, 29 U.S.C. 461–466; 

detailed procedural requirements for the 

conduct of elections of union officers, 

see sections 401–403 of the LMRDA, 29 

U.S.C. 481–483, safeguards for unions, 

including bonding requirements, the 

establishment of fiduciary 

responsibilities for union officials and 

other representatives; and criminal 

penalties for embezzlement from a 

union, for loans over $2,000 by a union 

to officers or employees, for a union’s 

employment of certain convicted felons 

or permitting them to hold union office, 

and for payments to employees for 

prohibited purposes by an employer or 

labor relations consultant, see sections 

501–504 of the LMRDA, 29 U.S.C. 501–

504; and prohibitions against retaliation 

for exercising protected rights, see 

sections 601–611 of the LMRDA, 29 

U.S.C. 521–531. 

The reporting requirement for union 

officials operates in tandem with the 

Act’s establishment of a fiduciary duty 

for union officials and representatives. 

Section 501, 29 U.S.C. 501. Congress 

addressed conflicts of interest in both 

sections 202 and 501(a) of the Act. The 

latter section provides in part: 

The officers, agents, shop stewards, and 

other representatives of a labor organization 

occupy positions of trust in relation to such 

organization and its members as a group. It 

is, therefore, the duty of each such person, 

taking into account the special problems and 

functions of a labor organization, to hold its 

money and property solely for the benefit of 

the organization and its members and to 

manage, invest, and expend the same in 

accordance with its constitution and bylaws 

and any resolutions of the governing bodies 

adopted thereunder, to refrain from dealing 

with such organization as an adverse party or 

in behalf of an adverse party in any matter 

connected with his duties and from holding 

or acquiring any pecuniary or personal 

interest which conflicts with the interests of 

such organization * * *. 

Both provisions address the potential 

and actual conflict between a union 

representative’s personal interests and 

his or her duty to the union and its 


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members. See Theodore Clark, Jr., The 

Fiduciary Duties of Union Officials 

under Section 501 of the LMRDA, 52 

Minn. L. Rev. 437, 458–60 (1962). 

The McClellan Committee hearings 

disclosed a history of self-dealing by 

certain union officials, often at the 

expense of their union’s membership. 

Then Senator John F. Kennedy was the 

chief sponsor of the Senate bill, S. 505, 

which served as the foundation for the 

LMRDA. In introducing the bill for the 

Senate’s consideration, Senator 

Kennedy addressed concerns about the 

involvement of union officials in 

matters that blurred their personal 

interests and their union’s interests, 

which concerns would be remedied by 

the legislation. Senator Kennedy used 

the experience of the Teamsters union, 

as revealed by the investigation of the 

McClellan Committee, to underscore the 

purposes to be achieved by the Act: 

First. It will no longer be possible for the 

dues of Teamster members to be * * * used 

by [the union’s] officers to build their own 

personal financial empires without the 

knowledge of the members themselves—or 

without investigation by the press and public 

authorities. 

Second. [A union official] would be 

required to disclose all his business dealings 

with insurance agents handling the union’s 

welfare funds, his private arrangements with 

employers, his hidden partnerships in 

business ventures foisted upon his members, 

and all other possible conflicts of interest. 

* * * * * 

Sixth. [Union officials] will find future 

collusion with employers vastly restricted—

with no more loans from employer groups, 

no more attacks on rival unions through 

middlemen * * *, and no more secrecy 

shrouding the use of union funds to bail out 

a collaborating employer. 

105 Cong. Rec. S817 (daily ed. Jan. 20, 

1959), reprinted in 2 NLRB Legislative 

History of the Labor-Management 

Reporting and Disclosure Act of 1959 

(‘‘Leg. History’’), at 969. 

The improper dealings by the 

Teamsters officials, to which Senator 

Kennedy refers, are detailed in the 

Interim Report, at e.g., 48, 59–60, 64–86, 

222–54, 443–50. These dealings, like 

those identified by officials of other 

unions in the Interim Report, included 

actions undertaken by national officers, 

or others acting at their behest, 

involving matters affecting not only the 

national union’s operation but also 

matters of importance to local and 

intermediate bodies of their union. See 

e.g., Interim Report, at 4–7, 46–49, 51, 

55, 59–60, 63, 69, 74, 81, 87, 122–25, 

128, 130, 179, 186–87, 224, 228, 230–40, 

244, 250, 252, 264–66, 268, 281, 284–85, 

295, 297, 300, 444–48. See also The 

Enemy Within, at 97, 99, 104–05, 106, 

221–24. 

As explained in the Senate Committee 

Report, S. Rep. No. 187 (1959) (‘‘Senate 

Report’’), at 15, reprinted in 1 Leg. 

History, at 411: ‘‘The hearings before the 

McClellan committee brought to light a 

number of instances in which union 

officials gained personal profit from a 

business which dealt with the very same 

employer with whom they engaged in 

collective bargaining on behalf of the 

union.’’ Id. The committee endorsed the 

concern expressed in the AFL–CIO’s 

Ethical Practices Code that the union 

official ‘‘may be given special favors or 

contracts by the employer in return for 

less than a discharge of his obligations 

as a trade-union leader.’’ Id. 

In explaining the purpose of the 

disclosure rules for union officers and 

employees, the Senate Report presented 

‘‘three reasons for relying upon the 

milder sanction of reporting and 

disclosure [relative to establishing 

criminal penalties] to eliminate 

improper conflicts of interest,’’ which 

we summarize as follows: 

• Disclosure discourages questionable 

practices. ‘‘The searchlight of publicity 

is a strong deterrent.’’ Disclosure rules 

should be tried before more severe 

methods are employed. 

• Disclosure aids union governance. 

Reporting and publication will enable 

unions ‘‘to better regulate their own 

affairs. The members may vote out of 

office any individual whose personal 

financial interests conflict with his 

duties to members,’’ and reporting and 

disclosure would facilitate legal action 

by members against ‘‘officers who 

violate their duty of loyalty to the 

members.’’

• Disclosure creates a record. The 

reports will furnish a ‘‘sound factual 

basis for further action in the event that 

other legislation is required.’’

Senate Report, at 16, reprinted in 1 Leg. 

History, at 412. 

The Report further stated: ‘‘No union 

officer or employee is obliged to file a 

report unless he holds a questionable 

interest or has engaged in a questionable 

transaction. The bill is drawn broadly 

enough, however, to require disclosure 

of any personal gain which an officer or 

employee may be securing at the 

expense of the union members.’’ Senate 

Report, at 14–15, reprinted in 1 Leg. 

History, at 410–11. The House 

Committee Report, H.R. Rep. No. 741 

(1959) (‘‘House Report’’), at 11, 

reprinted in 1 Leg. History, at 769, 

conveyed the same message. Both the 

Senate and House Reports recognize 

that a reportable interest is not 

necessarily an illegal practice. As the 

House Report stated: 

In some instances matters to be reported 

are not illegal and may not be improper but 

may serve to disclose conflicts of interest. 

Even in such instances, disclosure will 

enable the persons whose rights are affected, 

the public, and the Government, to determine 

whether the arrangements or activities are 

justifiable, ethical, and legal. 

House Report, at 4, reprinted in 1 Leg. 

History, at 762. See Senate Report, at 38, 

reprinted in 1 Leg. History, at 434 (‘‘By 

requiring reports * * *, the committee 

is not to be construed as necessarily 

condemning the matters to be reported 

if they are not specifically declared to be 

improper or made illegal under other 

provisions of the bill or other laws’’). 

‘‘Reports are required as to matters 

which should be public knowledge so 

that their propriety can be explored in 

the light of known facts and 

conditions.’’ Id. As stated by Senator 

Barry Goldwater after the LMRDA had 

been passed: 

Briefly, what must be reported are holdings 

of interest in or the receipt of economic 

benefits from employers who deal or might 

deal with such union official’s union, or 

holdings in or benefits from enterprises 

which do business with such union official’s 

union. 

105 Cong. Rec. A8512 (daily ed. Oct. 2, 

1959), reprinted in 2 Leg. History, at 

1846. 

Conflict of interest standards, 

including disclosure obligations of 

individuals and entities occupying 

positions of trust, are well grounded in 

U.S. law. As stated in the House Report, 

repeating almost verbatim the same 

point in the Senate Report: 

For centuries the law of fiduciaries has 

forbidden any person in a position of trust 

subject to such law to hold interests or enter 

into transactions in which self-interest may 

conflict with complete loyalty to those whom 

he serves. * * * The same principle * * * 

should be equally applicable to union 

officers and employees [quoting the AFL–

CIO’s Ethical Practices Code]: ‘‘[A] basic 

ethical principle in the conduct of union 

affairs is that no responsible trade union 

official should have a personal financial 

interest which conflicts with the full 

performance of his fiduciary duties as a 

worker’s representative.’’

Senate Report, at 11, reprinted in 1 Leg. 

History, at 769. See generally 

Restatement (Second) of Trusts (1959) 

§§ 170, 173; Restatement (Second) of 

Agency (1958) §§ 381, 387–98. 

Section 202 is an effort, in part, to 

make effective the disclosure 

requirements associated with the 

fiduciary standards applied to union 

officials in Title V of the LMRDA, a duty 

that includes an obligation to report 

potential conflicts of interest. Both 

Titles II and V of the Act represent an 

effort to codify various requirements 


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contained in an extensive code of ethics 

voluntarily adopted by the AFL–CIO in 

1957 and applied to its affiliated unions 

and officials. See Senate Report, at 12–

16, reprinted in 1 Leg. History, at 408–

12; House Report, at 9–12, reprinted in 

1 Leg. History, at 767–70. See also 

Internal Affairs of Labor Unions, 58 

Mich. L. Rev. at 824–29. The following 

excerpts from this code demonstrate the 

similarities between a union official’s 

fiduciary duty and the disclosure 

requirements of section 202. 

[A] basic ethical principle in the conduct 

of trade union affairs is that no responsible 

trade union official should have a personal 

financial interest which conflicts with the 

full performance of his fiduciary duties as a 

workers’ representative. 

[U]nion officers and agents should not be 

prohibited from investing their personal 

funds in their own way in the American free 

enterprise system so long as they are 

scrupulously careful to avoid any actual or 

potential conflict of interest. 

In a sense, a trade union official holds a 

position comparable to that of a public 

servant. Like a public servant, he has a high 

fiduciary duty not only to serve the members 

of his union honestly and faithfully, but also 

to avoid personal economic interest which 

may conflict or appear to conflict with the 

full performance of his responsibility to those 

whom he serves. 

There is nothing in the essential ethical 

principles of the trade union movement 

which should prevent a trade union official, 

at any level, from investing personal funds in 

the publicly traded securities of corporate 

enterprises unrelated to the industry or area 

in which the official has a particular trade 

union responsibility. 

[These principles] apply not only where 

the investments are made by union officials, 

but also where third persons are used as 

blinds or covers to conceal the financial 

interests of union officials. 

Ethical Practices Code IV: Investments 

and Business Interests of Union, 105 

Cong. Rec.*16379 (daily ed. Sept. 3, 

1959), reprinted in 2 Leg. History, at 

1408. See also Ethical Practices Code II: 

Health and Welfare Funds, id., 2 Leg. 

History, at 1406–07. 

The Department intends by today’s 

rule to better achieve the purposes of 

the LMRDA, as reflected by its 

legislative history. 

II. Discussion of Comments Received on 

Proposed Rule and Department’s 

Response 

A. Why the Changes To the Form Are 

Needed Now 

Several commenters recommended 

that the Department should evaluate its 

recent compliance experience with 

Form LM–30 reports submitted by 

union officials using the old form before 

considering any changes to the form. 

One commenter stated that there is no 

problem with the old form. Another 

asserted that the affected community 

has spent a ‘‘huge amount of time 

getting up to speed on the present 

form,’’ arguing that the proposed form is 

more confusing than the current form 

because it requires filers to identify for 

each reportable interest the particular 

statutory provision to which it relates. 

A labor educator, noting the upsurge 

in Form LM–30 filings about the time of 

the comment period on the proposed 

rule, suggested that the Department 

should postpone any changes until it 

completed a thorough analysis of these 

submissions. Although this commenter 

acknowledged that the old form 

presents some challenges to a filer’s 

easy understanding of the reporting 

requirements, he asserted that the 

proposed form poses greater 

opportunity for mistake and confusion. 

Two commenters argued: ‘‘[R]adically 

changing the form at the same time as 

the Department provides comprehensive 

guidance on what is considered 

reportable [on the old form] will only 

impede the efforts to encourage accurate 

and full reporting.’’

The old Form LM–30 posed 

substantial challenges to filers. As 

discussed in the NPRM and as 

demonstrated by comments on the 

proposal, filers have been unsure about 

the kinds of payments that trigger the 

need to file a Form LM–30. See 70 FR 

51172–73, 51175. Keeping the status 

quo would leave in place exceptions 

that permit union officials to avoid 

disclosing payments that would 

otherwise be reportable under the 

statute, denying union members 

information about their officials’

interests in and payments by employers 

and businesses that raise conflict of 

interest questions. Deferring the final 

rule for an exhaustive analysis of all the 

Form LM–30 filings during the April 

through mid-August 2006 ‘‘grace 

period,’’ numbering about 13,000 would 

cause undue delay with little additional 

gain. The Department’s preliminary and 

ongoing review of these filings 

demonstrates that the old form is 

unclear and that today’s rule will rectify 

many of the problems observed in those 

filings. 

One commenter recommended that 

the Department, well in advance of the 

filing deadline, ‘‘should grant a 

reasonable extension for filing and/or 

make any aspects of the final rule that 

are more restrictive than the current rule 

prospective only. DOL should only 

apply any changes prospectively, and it 

should provide a reasonable 

opportunity for necessary recordkeeping 

and related efforts to facilitate accurate 

reports and compliance.’’ Another 

commenter argued that no new 

requirements should be imposed on 

service providers until rulemaking on 

the Form LM–10 is completed. Another 

commenter argued that no changes in 

reporting should occur any sooner than 

a filer’s fiscal year that begins after the 

final rule takes effect. 

DOL is applying these changes 

prospectively only. This final rule will 

apply to fiscal years beginning on or 

after lll, 2007. Therefore, no report 

subject to today’s rule will be due until 

at least lll, 2008. There is ample 

time from publication of this final rule 

until lll, 2008 for all filers to obtain 

any information they need to comply 

with the filing requirements. 

B. Why the Department Is Not Presently 

Requiring Unions to Notify Their 

Officers and Employees (‘‘Officials’’) 

About Their Annual Reporting 

Obligations 

In the NPRM, the Department 

requested comments on whether the 

Department should require unions to 

provide notice of the filing requirements 

to their officers and employees. The 

NPRM discussed possible notification 

options. Under one option, unions 

would be required to notify their 

officers and employees of their Form 

LM–30 obligations within 30 days of 

their installation into office or hire, 

respectively. Unions would be required 

to provide initial notification within 60 

days of the enactment of the regulation, 

and annually thereafter to all officers 

and employees. Under the proposal, a 

union could meet this requirement by 

providing a copy of the Form LM–30 

and its instructions. E-mail notification 

might be considered. As an alternative, 

a general notice, provided in a union 

publication addressed to each officer 

and employee, might be adequate for 

this purpose. 

A number of comments were received 

on the notification question. 

Commenters were divided on the 

question. Some commenters strongly 

supported mandatory notification, 

pointing to low numbers of past filers as 

evidence that notification is essential. 

No union commenter supported the 

proposal. Commenters were divided as 

to whether the Department has authority 

to require notification under sections 

105 or 208 of the LMRDA. One 

commenter asserted that the Department 

lacks authority to issue a notification 

requirement under section 105, arguing 

that this provision does not allow 

imposition of a detailed code of union 

conduct. Another commenter used 

section 105 to illustrate its position that 

Congress knew how to establish a 

notification requirement, arguing that its 


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failure to so provide in section 202 

evinces the intention to excuse unions 

from any obligation to provide such 

notice. Another commenter argued to 

the contrary, stating that mandatory 

notification is consistent with section 

105 which states, ‘‘[e]very labor 

organization shall inform its members 

concerning the provisions of this Act.’’

While acknowledging that section 208 

arguably permits a notification 

requirement, a commenter argued that 

the Department must first demonstrate 

that such a rule is necessary to prevent 

the circumvention or evasion of the 

reporting obligation. It argued that 

‘‘circumvention’’ and ‘‘evasion’’ connote 

a willful disregard of the filing 

obligation, actions that require as a 

premise that the filer already is aware of 

the filing obligation. 

A commenter argued that the 

Department should impose a broader 

notification requirement on unions. 

Unions should be required, in its view, 

to provide notice to both officials and 

their members about both the filing 

obligations of union officials and the 

union’s own reporting obligations to file 

a Form LM–2, 3 or 4. Another 

commenter viewed notification as a 

‘‘first-step in the right direction.’’ It 

stated a preference for a system whereby 

the Department would provide annual 

reminders about Form LM–30; each 

union would be required to file with the 

Department the names and addresses of 

all its officers and employees. On the 

other hand, several commenters argued 

that reliance on voluntary efforts would 

better achieve the goal of informing 

officials about their filing obligation. 

One of these commenters stated that 

voluntary education works better than 

mandatory notification given that 

unions have a variety of governance 

structures and that they operate, in 

effect, in different industries calling for 

different approaches. Another 

commenter suggested that DOL ‘‘work 

informally’’ to obtain compliance. This 

commenter explained that under the old 

regulation, unions take various steps to 

inform their officials about Form LM–30 

requirements, such as by holding 

meetings or providing written notices. 

The commenter argued that the choice 

of a method to inform union members 

should be left to the union. Several 

commenters argued that notification 

was unnecessary in light of new 

Department guidance, pointing to the 

rise in filings to support its claim. 

The Department believes it possesses 

the authority to impose a notification 

requirement. However, the Department 

has concluded, based on its review of 

the comments and the recent experience 

with Form LM–30 filers, that a 

mandatory notification requirement is 

unnecessary on the present record to 

effectuate the disclosure purpose served 

by section 202 of the Act. After unions 

and their counsel became aware of the 

Department’s increased emphasis in 

securing compliance with section 202, 

many contacted their officers and 

employees to inform or at least remind 

them of their obligation to file a Form 

LM–30 if they engaged in any of the 

activities identified by the form and its 

instructions. While in previous years 

less than 100 forms were typically filed 

each year, during the 2005 grace period 

contemporaneous with this rulemaking, 

13,326 reports were filed. During FY 

2006, 4,348 Form LM–30 reports were 

filed. Given the historic increases in 

Form LM–30s during the grace period 

with stepped up Departmental 

compliance assistance and voluntary 

efforts by major unions to educate 

affiliates and officials, there is currently 

not a sufficient record to conclude that 

a mandatory requirement is needed. 

The Department applauds the 

voluntary efforts by the AFL–CIO and 

other unions to apprise union officials 

about their Form LM–30 reporting 

obligations. However, insufficient time 

has passed to conclude that union 

officials, without receiving regular 

notice by their union of these 

obligations, will remain aware of these 

obligations. If future compliance figures 

indicate that new union officials are 

uninformed about their Form LM–30 

filing obligations or that others appear 

to have forgotten their obligations, the 

Department may then reassess the need 

for imposing a notification requirement. 

C. Why the De Minimis Exemption From 

Reporting Insubstantial Gifts and Other 

Financial Benefits Has Been Simplified 

and Subjected to a $250 Limit, With an 

Exclusion for Gifts Valued at $20 or Less 

and Certain Widely-Attended 

Gatherings 

Section 202(a) of the LMRDA calls for 

disclosure of ‘‘any’’ stock, bond or other 

interest, ‘‘any’’ income, ‘‘any’’ loan, and 

‘‘any’’ payment or other thing of value 

received by a union official, his or her 

spouse, or minor child[ren] from 

employers and businesses as defined in 

sections 202(a)(1) through 202(a)(6). 

While this inclusive language may be 

read to require a report on any such 

payments regardless of amount, the 

Department always has excepted from 

reporting payments of insubstantial or 

de minimis value. Thus, the old 

instructions to the Form LM–30 inform 

filers: ‘‘You do not have to report any 

sporadic or occasional gifts, gratuities, 

or loans of insubstantial value, given 

under circumstances or terms unrelated 

to the recipient’s status in a labor 

organization.’’ This exemption applies 

by its terms to all reports due under 

section 202. The LMRDA Interpretative 

Manual (‘‘LMRDA Manual’’), as revised 

in March 2005, states that anything with 

a value of $25 or less will be considered 

de minimis and therefore not reportable 

if it is given on an ‘‘infrequent or 

sporadic’’ basis under circumstances 

unrelated to the recipient’s status in a 

labor organization. LMRDA Manual, 

§ 241.700. 

The Department sought comments on 

the de minimis exception generally and 

specifically on whether the $25 

threshold is appropriate, whether the 

burden is reasonable, and whether 

reporting of all transactions should be 

required without regard to their value. 

70 FR 51175. In November 2005, 

following a review of Form LM–30 

reports filed during the Department’s 

grace period, which revealed the 

reporting of numerous payments that 

union members and the public would 

regard as trivial, and based on 

comments from union representatives 

that the threshold was too low, the 

Department issued guidance advising 

that ‘‘gifts, gratuities or loans with a 

value of $250 or less’’ would be 

considered insubstantial for the 

purposes of Form LM–30 reporting. 

In the NPRM, the Department noted 

the inclusive language used by Congress 

in defining the scope of the reporting 

obligation and the absence of any 

general substantiality test for the 

LMRDA’s reporting provisions. See 

section 202(a)(3); 29 U.S.C. 432(a) 

(limiting reports specific to certain 

‘‘substantial’’ dealings). The Department 

also noted that exceptions based on 

insubstantiality are commonly read into 

statutes that do not expressly contain 

them and that the financial disclosure 

reports for certain Federal government 

employees contain a de minimis 

exemption. 

The Department in today’s rule 

retains a de minimis exemption. Under 

this exemption, payments or gifts 

totaling $250 or less from any one 

source during the reporting year need 

not be reported. In addition, the 

Department decides that payments or 

gifts valued at $20 or less need not be 

included in determining whether the 

$250 threshold has been met. The 

Department has concluded that a dollarspecific test for de minimis payments is 

preferable to one that requires filers to 

make a fact-specific determination of 

what is ‘‘insubstantial’’ or ‘‘unrelated to 

the filer’s status in a labor organization’’

or ‘‘sporadic and occasional.’’ The 

Department also has crafted a limited 

reporting exclusion for a union official’s 


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attendance at ‘‘widely attended 

gatherings.’’ If during the year, an officer 

or employee attends one or two widelyattended gatherings for which an 

employer has spent $125 or less per 

attendee per gathering, the officer or 

employee has no Form LM–30 

obligation with regard to tracking or 

disclosing these events. A gathering will 

be considered ‘‘widely attended’’ if it is 

expected that a large number of persons 

will attend and that attendees will 

include both union officials and a 

substantial number of individuals with 

no relationship to a union or its section 

3(l) trust. 

The Department received numerous 

comments on the de minimis question, 

mostly in favor of retaining the 

exemption and the adoption of a 

quantitative threshold substantially 

higher than the $25 figure discussed in 

the NPRM. Particular comments are 

discussed below. 

A few commenters argued that no de 

minimis level should be adopted at all. 

One commenter stated that full 

disclosure was appropriate because it 

allowed a union’s members to decide 

whether a gift to a union official 

presented a negligible conflict of 

interest or not. The Department 

acknowledges that there would be some 

benefit in eliminating the exception; 

this change would allow individual 

union members to determine whether a 

particular payment poses a conflict of 

interest and more importantly could 

lead to further inquiry about a union 

official’s actions. As stated in the 

NPRM, there is no statutory requirement 

for a de minimis level. See 

Environmental Defense Fund, Inc. v. 

EPA, 82 F.3d 451, 466 (D.C. Cir. 1996). 

Nonetheless, abandoning a de minimis 

threshold altogether would be a sharp 

departure from the Department’s 

historical practice. Moreover, as further 

discussed below, the Department 

believes that elimination of the de 

minimis exception would only 

marginally increase meaningful 

transparency. Furthermore, the absence 

of a specific de minimis exception in 

section 202 is not determinative; 

exceptions based on insubstantiality are 

commonly read into statutes that do not 

expressly contain them, and this 

practice demonstrates their practical 

value. See Wisconsin Dept. of Revenue 

v. William Wrigley, Jr., Co., 505 U.S. 

214, 231 (1992). For these reasons, the 

Department retains the de minimis 

exception. 

Many commenters noted the difficulty 

of applying the vague de minimis 

standard in the old instructions and the 

historical absence of helpful guidance in 

applying the exception. Several 

requested the Department to provide at 

least an illustrative dollar figure and to 

explain the meaning it attributes to the 

terms ‘‘unrelated to the filer’s status in 

a labor organization’’ and ‘‘sporadic and 

occasional.’’ Some specifically 

requested the Department to provide 

additional examples so that filers could 

better understand the de minimis 

exception. Others argued for a test that 

was solely tied to the dollar value of any 

gift or payment. 

As acknowledged in the NPRM, the 

qualitative aspects of the rule have 

proved difficult to apply. Based on its 

consideration of the comments and 

further review of this question, the 

Department has concluded that the 

purposes of section 202 can best be 

achieved by modifying the test so that 

the value of the payment or gift is the 

sole consideration affecting its 

disclosure. Additional conditions for 

claiming the exception would often 

present filers with the burden and 

expense of undertaking a fact-specific 

inquiry even though the amount of the 

gift or payment, as recognized by the 

dollar threshold, is insubstantial. 

Some commenters favored replacing 

or at least supplementing the de 

minimis rule with the creation of broad 

exceptions to the various reporting 

requirements. These commenters 

requested exceptions for what they 

viewed as routine activities necessary 

for conducting business. Thus, 

exceptions, among others, were 

proposed for the following: any 

expenses related to an employee benefit 

plan including educational benefits, 

receptions and meals, routine business 

functions and luncheons, all marketing 

expenses, marketing and entertainment 

expenses provided equally to union and 

management trustees, and any 

promotional or branded good containing 

a company name or logo. Most of these 

comments were from employers or 

industry associations that anticipate that 

union officials will rely on the vendors 

to keep track of any gifts or payments 

so that they can readily determine 

whether they have incurred a reporting 

obligation. Another commenter 

suggested that no report should be 

required for any gratuity that would be 

considered a ‘‘business expense’’ by the 

IRS. One commenter characterized the 

rule as ‘‘incredibly burdensome’’ and an 

‘‘unprecedented imposition’’ on service 

providers to trusts. Another commenter 

suggested, in effect, that the Department 

should adopt the rules and exceptions 

provided under the disclosure rules for 

Federal employees in place of the 

Department’s proposed de minimis rule. 

Several comments expressed concern 

about the need to report educational 

materials and seminars provided union 

trustees by vendors offering or 

providing services to welfare and 

pension plans. These commenters 

argued that even a high de minimis 

level would have a chilling effect 

because union trustees would refuse the 

materials or decline to attend a seminar 

in order to avoid the recordkeeping and 

reporting burden or the perception by 

union members that the trustee’s 

attendance would be inappropriate. One 

commenter suggested that no report 

should be required for educational 

resources provided to union officials, so 

long as the sponsoring organization 

retained a statement of the educational 

purpose of the resource, a list of its total 

expenses relating to the otherwise 

reportable event, and if a seminar, the 

list of attendees. 

The Department declines to create any 

suggested broad category of exceptions. 

Creating the broad exceptions suggested 

would frustrate the purpose of the 

statute to make transparent possible 

conflicts and would deny union 

members the ability to evaluate any 

concerns they might have about the 

possibility that a union official might 

put his or her own interests above those 

of the union and its members. 

Educational seminars and resources 

may benefit trustees to pension or 

welfare plans and the workers whom 

the plan is meant to benefit. The same 

event, however, may well include gifts, 

meals, travel, lodging and entertainment 

provided by service providers, or 

potential service providers, to these 

plans. By requiring reporting, the 

Department need not attempt the highly 

difficult task of crafting a rule that will 

identify the questionable payments. 

Rather, union members and the public 

can evaluate the situation on a case-bycase basis, and make their own 

decisions on the choices made by their 

officials. Furthermore, these 

commenters fail to recognize that the 

Secretary’s authority to fashion a de 

minimis exception is a limited one. The 

LMRDA does not confer on the 

Secretary the authority to except from 

reporting matters which Congress has 

evinced no intention to withhold from 

disclosure and the de minimis 

principle, as evidenced by its name, 

only applies to matters of relative 

insignificance. Although the disclosure 

rules for Federal employees provide an 

alternative system for reporting 

financial interests that may pose a 

conflict with an individual’s duties, that 

system was designed to meet the special 

needs and interests of Federal 

employment and the various laws that 

govern such employment. The 


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Department has borrowed some ideas 

from the disclosure rules for Federal 

employees but to adopt the Federal 

disclosure rules wholesale would be 

impracticable. 

Most of the commenters advocated a 

dollar threshold substantially higher 

than the $25 figure mentioned in the 

NPRM; many urged a figure higher than 

$250. These commenters and others 

requested the Department to exclude 

from the aggregate amount ‘‘hospitality 

gifts’’ of nominal value, variously 

defined by particular commenters. 

Several commenters urged the 

Department to adopt a two-tier approach 

similar to Federal conflict of interest 

disclosure requirements for Office of 

Government Ethics (OGE) Form 450 and 

Form SF 278. In general, these 

commenters recommended that gifts 

totaling $250 or less from any one 

source need not be reported and that 

‘‘insubstantial’’ gifts (ranging from $75 

to $250) should not be included in 

determining whether the $250 threshold 

has been met. Otherwise, many 

commenters argued, the recordkeeping 

burden would be unreasonable because 

union officials would have to track 

every cup of coffee and every lunch to 

determine whether and when the $250 

level was met. The general rule for 

employees covered by the Federal 

disclosure rules is that they are 

prohibited from accepting any gift 

because of their government position. 

Examples of prohibited gifts are those 

that come from persons or firms that 

have contracts, grants, or other business 

with the employee’s agency, or are 

seeking such contracts, grants or other 

business. These employees are also 

prohibited from accepting gifts from 

entities that are either regulated by the 

employee’s agency or may be affected by 

the performance of the employee’s 

duties. An exception to this general rule 

applies to unsolicited non-cash gifts of 

$20 or less up to a maximum of $50 per 

year from a single source. 5 CFR 

2635.204(a). 

The Department believes that, by 

setting the threshold at $250 and 

providing that payments or gifts valued 

at $20 or less need not be included in 

determining whether the $250 threshold 

has been met, it has achieved the 

appropriate balance between ensuring 

transparency of potential conflicts and 

minimizing the reporting burden. This 

two-tier approach has precedent in the 

Federal employee disclosure regime. By 

excluding expenses of $20 or less from 

the $250 computation, the Department 

substantially reduces the burden 

associated with aggregating gifts or 

payments from a particular employer or 

business. There will be no need to keep 

records of coffee and pastry service, 

modest lunches, or similar ‘‘hospitality 

gifts.’’

Some commenters expressed the 

concern that requiring large numbers of 

reports on relatively small amounts of 

payments ‘‘buries’’ from view reports of 

greater value. The Department believes 

this fear is unfounded, especially in 

light of the $250 aggregate threshold 

established by today’s rule. Even at a 

much lower figure, the number of 

reports of interest to a particular union 

member would constitute only a small 

fraction of the total number of reports 

filed and these reports could easily be 

culled electronically from the other 

reports. 

The Department does not find 

persuasive the comments urging that 

payments higher than $20 should be 

excluded from the $250 reporting 

threshold. While there may be merit to 

some arguments urging a somewhat 

higher or lower amount, a $20 initial 

threshold minimizes reporting burden 

and ensures disclosure of financial 

relationships that may pose a conflict of 

interest. The Department, however, 

rejects the suggestion that items valued 

substantially more than $20 should go 

unreported. While in the Department’s 

view, a single gift of $75 or even $100 

is unlikely to be a matter of substantial 

concern to some members, even a few 

gifts of this magnitude would be of 

concern to most members. And almost 

every member would be concerned if a 

union official received several gifts of 

such value. By setting the amount at 

$100, for example, a union official could 

receive a respectable set of golf clubs, 

gloves, shoes, and other golfing attire 

through a series of $100 gifts without 

filing a Form LM–30. Most union 

members and members of the public, 

the Department believes, would view 

the gift of a complete set of clubs or 

other serial or packaged gifts as posing 

a potential conflict of interest between 

the union duties of the recipient and 

matters affecting the donor of the gifts. 

The purpose of the de minimis 

exception is to minimize reporting 

burden. A filer may not use the 

exception to hide the receipt of a series 

of payments or gifts that are purposely 

set at $20 or less to avoid reaching the 

$250 reporting threshold. For example, 

a filer would have to report his or her 

receipt of individual tickets worth $20 

or less to all of a professional baseball 

team’s home games that are provided 

before each game rather than given as a 

complete package at the start of the 

season. The Department is sensitive to 

the concern that by setting the de 

minimis level at $250 today’s rule could 

lead to the unintended consequence that 

some union officials will choose not to 

attend some widely-attended gatherings 

of value to them and their union’s 

members. However, the Department also 

believes that reporting attendance at 

legitimate educational gatherings will 

also benefit the filer by showing their 

union members that the filer is taking 

steps to learn and advance the skills 

needed for their position. As stated 

above, the Department’s authority to 

fashion a de minimis exception is 

constrained by the language of section 

202. In the Department’s view, however, 

the Department is within the bounds of 

its discretion to craft a limited reporting 

exception for such gatherings. Thus, the 

Department concludes that no union 

official need report their attendance at 

one or two such gatherings annually 

provided the expense incurred by the 

employer or business holding the 

gathering is $125 or less per expected 

attendee. The Department believes this 

change meets the concern of some 

commenters that union officials and 

trustees would be discouraged from 

attending educational seminars related 

to their union or trustee duties if they 

were required to report such activities. 

The Department considered, but 

rejected as impractical and perhaps 

beyond the Department’s authority, a 

broader qualitative exception for 

meetings. None of the comments 

provided a ready basis for 

distinguishing between the purposes of 

various meetings that would reduce the 

reporting burden without impeding the 

disclosure of information relevant to 

assessing the potential conflict of 

interest from the value of attendance at 

several meetings or a single meeting of 

significant economic value to a union 

official present at the meeting. 

D. Why Reporting Exceptions Permitted 

Under the Old Rule Have Been 

Eliminated or Modified To Provide More 

Information to Union Members 

In the NPRM, the Department 

proposed the elimination of regulatory 

exceptions from the reporting 

requirements of section 202. One of 

these exceptions relates to the reporting 

by union officials of payments received 

under ‘‘union-leave’’ and ‘‘no-docking’’

policies; this exception is discussed 

separately. Although each exception is 

based on statutory language excepting 

the reporting of specific interests in or 

payments from an employer, the old 

Form LM–30 and its instructions apply 

these specific exceptions more generally 

to other matters that otherwise would 

have to be reported. As discussed in the 

NPRM, by administratively enlarging 

exceptions to reporting, the Department 

deprived union members of information 


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to which they were entitled under 

particular provisions of section 202. 70 

FR 51175–78. The Department also 

proposed to eliminate a provision in its 

regulations, 29 CFR 404.4, which now 

states that the Department may require 

a union official to file a special report 

in situations where the administrative 

exceptions departed from the language 

of the statute. 70 FR 51178. 

Under today’s rule, as discussed 

below, the Department generally has 

adopted the proposals set forth in the 

NPRM to narrow the scope of these 

exceptions in order to better adhere to 

the statutory design. The Department 

also has eliminated the ‘‘special 

reports’’ language as unnecessary given 

the Department’s express statutory 

mandate to conduct investigations 

under the Act. 

1. Regular Course of Business Exception 

Section 202(a)(5) of the LMRDA 

requires union officials to report any 

‘‘business transaction or arrangement’’

with an employer whose employees the 

union represents or is actively seeking 

to represent. This section excepts from 

reporting two categories of transactions 

and arrangements: (1) Payments and 

benefits received as a bona fide 

employee of an employer whose 

employees the official’s union 

represents or is actively seeking to 

represent; and (2) ‘‘purchases and sales 

of goods or services in the regular course 

of business at prices generally available 

to any employee of such employer.’’

(Emphasis added). Sections 202(a)(1) 

and 202(a)(2) require union officers and 

employees to report payments from and 

other financial interests with such an 

employer. These sections do not contain 

this ‘‘employee discount in the regular 

course of business’’ exception, but the 

prior instructions applied it to financial 

matters covered by these subsections. 

The Department adopts its proposal to 

limit the exception to financial matters 

reportable under section 202(a)(5). 

Thus, this exception will no longer 

apply to matters reportable under 

sections 202(a)(1) or 202(a)(2). It will 

not be applicable to (1) Holdings in an 

employer whose employees the union 

represents or is actively seeking to 

represent, (2) transactions in such 

holdings, (3) loans to or from such 

employer, and (4) income or any other 

benefit with monetary value (including 

reimbursed expenses) received from 

such an employer. 

The Department received a few 

comments specific to this issue. One 

commenter supported the proposal to 

remove the exception, while two others 

objected to the proposal. One 

commenter based its support of the 

Department’s proposal in the statutory 

language, noting that the ‘‘regular course 

of business/employee discount’’

exception is found only in section 

202(a)(5) and not in sections 202(a)(1) 

and 202(a)(2). Therefore, this 

commenter contended, ‘‘the current 

instructions create an exception for 

transactions under the latter two 

subsections that Congress did not 

envision.’’ Numerous commenters 

objected generally to reporting related to 

the routine conduct of business, 

especially in connection with business 

conducted between section 3(l) trusts 

and service providers, including 

financial institutions. For example, one 

commenter asserted that the Department 

should not focus on ‘‘routine business 

transactions conducted at arms length,’’

but rather on those transactions that 

may be evidence of a potential conflict 

of interest. 

One commenter offered a general 

argument against reporting of what it 

considers to be routine business 

transactions, including payments or 

loans to union officials. The commenter 

argued, in effect, that the proviso in 

section 202(a)(6), excepting reporting on 

‘‘payments of the kinds referred to in 

section 302(c) of the Labor Management 

Relations Act,’’ should be applied 

broadly to all the subsections of section 

202(a). Thus, this commenter argues 

implicitly that section 302(c) of the 

Labor Management Relations Act 

excepts from the section’s criminal 

prohibition the payment of money or 

other thing of value ‘‘with respect to the 

sale or purchase of an article or 

commodity at the prevailing market 

price in the regular course of business.’’

29 U.S.C. 186(c)(3). This commenter 

apparently believes that Congress also 

intended to exclude such payments 

from any reporting by union officials, 

notwithstanding the absence of such 

exception from subsections (a)(1)–(5) of 

section 202. 

The Department disagrees that 

Congress intended the section 302(c) 

proviso in section 202(a)(6) to supplant 

the specific reporting obligations 

prescribed by the other five subsections 

of section 202(a), several which have 

unique exceptions narrowly applicable 

to the types of payments for which 

reports must be filed. The Department 

concludes that this construction is 

contrary to the plain language of the 

Act, and would render superfluous 

specific exclusions Congress crafted for 

particular types of payments. It would 

make no sense for Congress to craft a 

disclosure-specific statute with explicit 

reporting obligations and explicit 

exceptions and, at the same time, undo 

those specific provisions by a vague 

reference to another statute. 

Union members have an interest in 

knowing of such holdings, transactions 

in holdings, loans, and income so they 

can evaluate whether each is significant 

enough, or of such a nature, to 

constitute a conflict of interest. The 

statutory exemption for payments and 

other benefits received as a bona fide 

employee of the employer is sufficient 

to exempt all the ordinary payments 

received as part of an employment 

relationship; the exemption in the 

current form, the Department finds, may 

provide a means to exclude other items 

that present conflicts of interest for 

union officials. For example, a union 

officer who receives income from the 

employer of union members for contract 

work could, at least arguably, avoid 

disclosing the payment by relying on 

this exemption. A union employee who 

purchases certain types of ownership 

interests could avoid disclosing the 

holding by relying on this exemption. A 

union official with an employer as a 

client has a conflict between personal 

interests and union loyalties, as does an 

official with an ownership interest in 

the employer. The change is consistent 

with the plain language of the statute, 

which applies this exception only to 

financial matters reportable under 

section 202(a)(5), not to section 

202(a)(1) or 202(a)(2). The elimination 

of this exemption will result in more 

detailed and transparent reporting of 

financial information that union 

members may find helpful in 

determining whether their union’s 

officers and employees are subject to 

financial pressures inconsistent with 

their responsibilities to the union and 

its members. 

2. Bona Fide Employee Exception for 

Transactions With an Employer Whose 

Employees the Official’s Union 

Represents or Is Actively Seeking To 

Represent 

Sections 202(a)(1) and 202(a)(5) 

include language that specifically 

excepts ‘‘payments and other benefits 

received as a bona fide employee of 

such employer’’ from reporting. Under 

the old Form LM–30 and the 

instructions, however, this exception 

also was applied to matters for which 

reports were required under section 

202(a)(2). Section 202(a)(2) requires 

union officials to report: (1) 

Transactions in holdings in an employer 

whose employees the union represents 

or is actively seeking to represent, and 

(2) loans to or from such an employer. 

Section 202(a)(2) does not include the 

‘‘bona fide employee’’ exception. 


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The Department proposed to limit this 

exception only to reports due under 

sections 202(a)(1) and 202(a)(5), thereby 

eliminating the old exception for reports 

(on payments other than loans) due 

under section 202(a)(2). See 70 FR 

51176–78, 51188. The Department 

received only one comment on this 

issue. It supported the proposal. Today’s 

rule adopts the proposal, which is 

consistent with the plain language of the 

statute. A union official’s decision to 

purchase or divest holdings in the 

employer could be of significant 

importance to union members and its 

reporting would prevent a possible 

conflict from escaping the scrutiny of 

members. As noted in the proposal, 

sales and purchases of an ownership 

interest in the employer are unlikely to 

constitute payments received as a bona 

fide employee; by eliminating this 

exception, a union official must now, 

for example, report payments made to 

officials as stock options where the 

employer buys back such options. 

3. Exception for Bona Fide Loans or 

Interest From a Banking Institution 

Section 202(a)(6) requires union 

officials to report ‘‘any payment of 

money or other thing of value (including 

reimbursed expenses)’’ received from 

‘‘any employer’’ or any labor relations 

consultant to an employer. Under the 

old Form LM–30 and its instructions, 

the following are excepted from 

reporting: ‘‘[B]ona fide loans, interest or 

dividends from national or state banks, 

credit unions, savings or loan 

associations, insurance companies, or 

other bona fide credit institutions.’’ See 

Part C (ii) of the instructions to the old 

form. The Department proposed to 

eliminate the exemption. 

Upon review of the comments, the 

Department retains the general 

exception but limits its scope because 

the Department has determined that the 

exception is too broad. Under the final 

rule, this exception will not apply to 

‘‘national or state banks, credit unions, 

savings or loan associations, insurance 

companies, or other bona fide credit 

institutions that constitute a ‘trust in 

which your labor organization is 

interested’.’’

The Department received two 

comments in support of the proposal to 

eliminate this exception in toto. One 

commenter argued that the exception in 

the Form LM–30 instructions had no 

statutory basis, and that its existence 

tended to shield transactions that 

should be reported. The Department 

received four comments opposed to this 

proposal. These commenters stated that 

the elimination of this exception would 

burden union officers and employees, 

employers, and the Department; 

interfere with the privacy of the 

employees as well as the financial 

institutions by revealing confidential 

information; and fail to advance the goal 

of disclosing potential conflicts of 

interest. One commenter argued that the 

Department’s proposal to eliminate the 

exception was an ‘‘unwarranted 

intrusion on privacy,’’ while providing 

only minimal benefit to union members. 

This commenter questioned why the 

public should be made aware of a ‘‘bona 

fide mortgage’’ from a financial 

institution unrelated to the union and 

given on terms generally offered to the 

public. Most mortgages along with other 

encumbrances on property must be 

recorded with a government office, 

typically at the county level, to be 

effective. These filings are publicly 

available and as such the insinuation 

that the Department is now making 

public information that was secret is 

unfounded. Further, the vast majority of 

these loans will be made on neutral 

criteria not related to the filer’s status 

with a labor organization and as such 

will not be reportable. The rare instance 

where the filer’s status with the labor 

organization is a criterion for issuance 

of the loan is exactly the type of 

situation where a possible conflict of 

interest exists. As such, reporting on 

transactions of this type is warranted. 

Another commenter recommended 

that the Department only require 

reporting of loans made to employees in 

whole or in part due to their union 

status. The commenter expressed 

concern over the volume and diversity 

of new transactions that would come 

under the scope of the new Form LM–

30, such as payroll advances, and the 

burdensome recordkeeping 

requirements that would accompany the 

elimination of this exception. One 

commenter argued that the 

‘‘overwhelming majority’’ of the 

estimated 206,000 union officers and 

employees would now have to report 

under the new Form LM–30. 

The Department has concluded that 

the exception as drawn in the 

instructions to the old Form LM–30 is 

too broad. While there is a strong 

argument that elimination of the 

exception would best serve the 

disclosure purposes of the Act, the total 

burden associated with requiring reports 

on payments received from all financial 

institutions would be considerable. 

Loans, interest, and dividends earned 

during the regular course of business 

with a bona fide financial institution are 

among the most common financial 

transactions undertaken by individuals. 

For example, without this exception, a 

union official would have to report each 

mortgage or other bank loan received 

from any financial institution in 

competition with a financial institution 

that deals with the official’s union. A 

union official would first have to 

identify all the financial transactions 

with the official, his or her spouse or 

minor children and then look at the 

corresponding institutions to see 

whether they do business with the 

official’s union, or compete with those 

that deal with the official’s union. In the 

Department’s view, the burden would 

outweigh the value of the additional 

information disclosed. 

The current exception has kept 

improper transactions from being 

disclosed. As noted in the NPRM, the 

Department only belatedly became 

aware of a situation where a credit 

union controlled by a local union made 

61% of its loans to four of its loan 

officers, three of whom were officers of 

the local. 70 FR 51177. If the officials 

had been required to report these loans, 

the members would have learned that 

their credit union was making loans for 

reasons related to union status, not on 

a borrower’s ability to repay the debt, 

which posed a risk to the credit union 

by failing to spread the lending risk 

more broadly. In short, the members 

would have been able to determine 

whether the officials had placed their 

own personal interests above the 

union’s interest in the credit union that 

it ostensibly controlled. By eliminating 

the exception for institutions that are 

trusts, valuable information regarding 

potential conflicts of interest will be 

publicly disclosed. 

While the Department recognizes that 

an official’s interest in preserving the 

confidentiality of such information may 

be considerable; nonetheless, this 

interest is outweighed by the need for 

union members and the public to know 

of transactions between union officials 

and related organizations. Thus, here 

the balance tips in favor of disclosure in 

the limited situations proposed by 

today’s rule. 

This exception applies, and has 

always applied, only to reports due 

under section 202(a)(6). Where the 

financial institution is an employer 

whose employees the filer’s union 

represents or is actively seeking to 

represent, the exception would not 

apply. Nor would it apply where the 

financial institution is a business that 

buys, sells, leases or otherwise deals 

with the union, a trust in which the 

union is interested, or in substantial 

part with the employer of the union 

members. 

One commenter ‘‘strongly’’ disagreed 

with the proposal, arguing that it would 

impose a reporting obligation on union 


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officials, even though financial 

institutions are expressly relieved from 

reporting such loans by section 203(a)(1) 

of the Act. Section 203(a)(1) specifically 

exempts ‘‘payments or loans made by 

any national or State bank, credit union, 

insurance company, savings and loan 

association or other credit institution.’’

The commenter pointed out the 

potential ‘‘reporting inequities’’ of the 

Department’s proposal and argued that 

the inconsistent reporting obligation 

would make comparative analysis of 

Forms LM–10 and LM–30 impossible. 

The Department acknowledges that by 

modifying the exception, union officials 

will be required to report on matters 

about which the financial institutions 

themselves have no LMRDA reporting 

responsibility. However, the commenter 

overlooked the limited scope of the 

divergence. Section 203(a)(1)’s 

exception for ‘‘credit institutions’’ does 

not extend to any payments or loans 

made by such institutions to persuade 

or otherwise interfere with employee 

collective bargaining or representation 

rights. See 29 U.S.C. 203(a)(2) and (3). 

Furthermore, strong policy reasons exist 

for requiring union officials to report 

their arrangements with financial 

institutions in the limited circumstances 

required by today’s rule. 

4. Exceptions Relating to Stocks 

The Department invited comments 

about whether to remove or retain the 

administratively created exception 

related to the reporting of holdings, 

transactions or receipts of income from 

securities that do not meet the 

registration requirements of the Act, are 

of insubstantial value, and occur under 

terms unrelated to an employee’s status 

in a labor organization. The old rule 

states: ‘‘For purposes of this exclusion, 

holdings or transactions involving 

$1,000 or less and receipt of income of 

$100 or less in any one security shall be 

considered insubstantial.’’ 70 FR 51176. 

On a related issue, the Department 

sought comments on whether to retain 

the distinction between, on the one 

hand, securities traded on a registered 

national stock exchange and, on the 

other hand, securities that while traded 

on a high volume exchange, are not 

traded on a registered national exchange 

(as was the case with NASDAQ until 

recently). 70 FR 51177. Section 202(b) 

provides that a union official is not 

required ‘‘to report his bona fide 

investments in securities traded on a 

securities exchange registered as a 

national securities exchange under the 

Securities Exchange Act of 1934, in 

shares in an investment company 

registered under the Investment 

Company Act of 1940, or in securities of 

a public utility holding company 

registered under the Public Utility 

Holding Company Act of 1935, or to 

report any income derived therefrom.’’

The NPRM listed all of the stock 

exchanges currently registered under 

the Securities and Exchange Act of 

1934: ‘‘The American Stock Exchange, 

Chicago Board Options Stock Exchange, 

International Securities Exchange, 

National Stock Exchange (formerly the 

Cincinnati Stock Exchange), New York 

Stock Exchange, Pacific Exchange, and 

Philadelphia Stock Exchange.’’ The 

proposal noted that NASDAQ was not 

registered as a national securities 

exchange. 

Two commenters favored the 

complete elimination of the 

insubstantiality exception for securities 

not meeting the registration 

requirements. One of these commenters 

argued that the insubstantiality 

exception flies in the face of clear 

statutory intent to require the reporting 

of all stock transactions apart from bona 

fide investments in securities traded on 

a national securities exchange. The 

other commenter argued that union 

members, not this Department, should 

determine what is and is not 

insubstantial. One commenter also 

supported the exception for small 

holdings of unregistered securities as 

long as the holdings are too small to 

give rise to a controlling interest. 

Focusing on the comprehensibility of 

the exceptions to ‘‘end-user’’ union 

officials and members, another 

commenter stated that the ‘‘$1,000/100’’

and ‘‘publicly-traded securities’’

exceptions are specific and easily 

understood. By contrast, all of the union 

commenters, along with a labor 

educator, favored the exception and 

supported its broadening. 

The Department believes that the 

$1,000/$100 exception is warranted, 

and therefore it is retained in today’s 

rule. Where the value of securities and 

any interest thereon is less than these 

threshold amounts, there is little risk of 

potential conflict between an official’s 

personal interests and his or her duties 

to the union. Moreover, any such risk is 

outweighed by the burden associated 

with such reporting. Thus, for these and 

the reasons already expressed more 

generally herein on the application of 

the de minimis principle to the 

reporting obligation, today’s rule retains 

this limited reporting exception. 

One commenter objected to 

maintaining the exception for stock 

traded on other than a registered, 

national stock exchange on the ground 

that the statute does not provide for 

such an exception. Another commenter 

argued that there should be no 

exceptions for transactions involving 

the stock of the employer, regardless of 

whether the stock is traded on a 

registered securities exchange. This 

commenter expressed concern about the 

potential for insider trading by union 

officials who have knowledge about the 

position of the company that the rank 

and file members do not have. In 

support of his position, the commenter 

provides an example in which members 

of a union executive board sell stock 

options in a national exchange or 

private exchange shortly before 

authorizing a strike against the company 

that issued the stock. 

Other commenters argued that the 

existing exception for securities traded 

on a registered, national stock exchange 

should be continued and extended to 

cover stock transactions for shares 

traded on NASDAQ. All of the union 

commenters, along with a labor 

educator, favored the exception and 

supported broadening it. A commenter 

supported maintaining the exception for 

stock that is held in a company 

unrelated to the filer’s labor 

organization because, in its view, there 

is no potential for a conflict of interest. 

In support of their position, they argued 

that the LMRDA’s legislative history 

demonstrates that Congress did not 

want to burden officials with reporting 

holdings of publicly traded or regulated 

stocks ‘‘because of the unlikelihood that 

such holdings will amount to a 

substantial or controlling interest * * * 

in the company in question. The 

argument follows that because NASDAQ 

securities are publicly regulated and 

publicly traded, they fall within the 

purview of what Congress sought to 

exempt from reporting under section 

202(b). One commenter illustrated its 

position with the different reporting 

requirements that would apply if a 

union official owned both Gateway and 

Dell stock: the Dell stock (traded on 

NASDAQ) would be reported, whereas 

the Gateway stock (traded on the NYSE) 

would not be reported. According to 

this commenter, there is no conflict of 

interest in either instance, and 

accordingly neither transaction should 

be reported. Another commenter noted 

that when the LMRDA was enacted in 

1959, the shares of large corporations 

were exclusively traded on registered 

exchanges. It explains that now, 

however, the shares of many of those 

same large corporations are traded on 

the NASDAQ and that shares traded on 

NASDAQ are subject to Federal 

registration requirements. 

The Department retains the rule set 

forth in the instructions to the old rule, 

continuing the obligation of union 

officials to report transactions with any 


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exchange unless and until they meet the 

requirements embodied in section 

202(b). As a pure matter of policy, the 

argument for adding securities traded on 

a highly regulated, albeit 

‘‘unregistered,’’ market to the general 

exception for stock traded on a 

registered, national stock exchange may 

have merit. However, such argument 

founders on the plain language used by 

Congress to craft the exception for 

securities traded on a registered 

exchange as provided in the statute. By 

conditioning a reporting exception on 

registration, Congress obviously 

considered whether unregistered stocks 

should be similarly exempted and 

decided against it. Similarly, the 

statutory language prevents the 

Department from adopting a rule, as 

suggested by one commenter, to require 

officials to report their holdings in such 

securities that he or she has purchased 

in a company whose employees the 

official’s union represents or is actively 

seeking to represent. 

Although the commenters have 

demonstrated that the exception crafted 

by Congress, differentiating between 

certain kinds of stock depending upon 

how they are traded, may lead to some 

perceived anomalies, they do not show 

that this reporting obligation will 

impose any undue burden on filers. 

Furthermore, on July 15, 2006, the SEC 

approved NASDAQ’s application for 

registration as a national securities 

exchange, effective July 31, 2006. In 

announcing its decision, the SEC stated 

that the ‘‘vast majority’’ of the 

companies listed on NASDAQ have 

previously registered their securities 

under the Exchange Act. Press Release, 

SEC (July 31, 2006), available at 

http://www.sec.gov/news/press/2006/ 

2006–127.htm (last visited on Nov. 21, 

2006). Thus, under today’s rule, the 

exception provided by section 202(b) 

applies to registered stocks traded on 

NASDAQ; and the instructions have 

been revised to reflect this change. As 

some of the commenters suggested, the 

distinction between highly regulated 

stocks that are traded on a national, but 

unregistered exchange, and those traded 

on a registered national exchange is not 

immediately apparent to many filers, 

particularly insofar as NASDAQ-traded 

securities were concerned. The 

Department believes that its proposed 

definition of ‘‘publicly-traded 

securities’’ (albeit something of a 

misnomer in that registration of a 

national exchange, not ‘‘public trading,’’

is the distinguishing characteristic for 

reporting purposes) accurately set forth 

the statutory reporting obligation. At the 

same time, however, the change in the 

registration status of NASDAQ has 

largely eliminated the need for a lengthy 

discussion of this point in the 

instructions. For this reason, the final 

instructions more closely follow the 

abbreviated discussion of this point in 

the current instructions, without the 

need for a separate definition of 

‘‘publicly-traded securities’’ or an 

equivalent term. 

5. Revision of Special Report Language 

As noted, the old Form LM–30 

administratively excepts union officials 

from reporting various matters that 

otherwise would have to be reported 

under the particular subsections of 

section 202(a). A special report was 

intended to be used to obtain such 

information about such unreported 

matters upon demand of the 

Department. See 29 CFR 404.4. The 

Department proposed to delete the 

special report provision. 

At the time the Form LM–30 was 

created, the Department apparently 

believed that more complete reporting, 

consistent with the reporting 

requirements of section 202, could be 

realized through an ad hoc special 

report that could be selectively required 

by the Department. See 29 CFR 404.4. 

As discussed in the NPRM, these reports 

would allow the Department to require 

the disclosure of the information that 

was exempted from disclosure by 

operation of the administrative 

exceptions. No procedures were 

established, however, to identify the 

circumstances for which a special report 

would be required; and apparently the 

Department has never requested a union 

official to provide a special report. As 

noted in the NPRM, the elimination of 

the special report provision does not 

diminish the Department’s authority to 

assess each Form LM–30 report for 

sufficiency, require amended reports, 

and to commence investigations where 

it is necessary to determine whether any 

person has or is about to violate any 

provision of the Act. 29 U.S.C. 440, 521. 

E. Why Union Officials, as a General 

Rule, Must Report Payments Received as 

Members of a Company’s Board of 

Directors 

If a union official serves as a director 

for an employer and receives 

compensation or reimbursement for 

attendance at meetings, the official must 

report such payments. Such payments 

may not have been reported on the old 

Form LM–30 because of an official’s 

reliance on an earlier opinion by the 

Department on this issue. In the NPRM, 

the proposed instructions provided the 

following example of a transaction to be 

reported under section 202(a)(4): 

You are a national union president and a 

trustee of a jointly administered health care 

trust that insures union members through an 

insurance company. Premiums for coverage 

are paid by the trust to the insurance 

company. You are a member of the board of 

directors of the health insurance company, 

which pays you an annual fee and 

reimburses expenses for your attendance at 

board meetings. * * * As the insurance 

company is doing business with a trust in 

which your union is interested, you must 

report your annual fee and reimbursed 

expenses under this subsection. The dealings 

between the health insurance company and 

the trust must also be reported. 

70 FR 51215. 

The Department only received one 

comment on this point. The commenter 

opposed the proposal, arguing that the 

Department should confirm its 1986 

opinion that directors’ fees paid to 

union officers serving on a corporate 

board need not be reported ‘‘so long as 

the corporation pays the union officer/ 

director at the same rate it pays the 

other directors, for the same services.’’

The opposition was based on the 

commenter’s broader premise that 

Congress intended to generally except 

any payments to union officials that are 

made in the regular course of business. 

The Department disagrees. 

In the commenter’s view, the old 

Form LM–30, in effect, applies language 

in section 202(a)(5)—excepting from 

reporting certain transactions involving 

the ‘‘purchases and sales of goods or 

services in the regular course of 

business at prices generally available to 

any employee of [the] employer’’ who 

sold the goods or service—to modify 

generally the reporting obligations 

under section 202. The commenter 

argued that the instructions to the old 

Form LM–30 also apply, in effect, 

language in section 202(a)(6)—excepting 

from reporting certain payments ‘‘of the 

kinds referred to in section 302(c) of the 

Labor Management Relations Act’’—to 

modify generally the reporting 

obligations of section 202. The 

commenter, in essence, asserts that the 

instructions to the old form, like the 

1986 opinion on directors’ fees, which 

draws on similar language in section 

302(c), properly effectuate the intent of 

Congress and therefore should be 

preserved. The commenter further 

asserts that there is no justification for 

additional recordkeeping and reporting 

if the union representatives are being 

treated the same as their fellow directors 

on a corporate board. 

The Department disagrees with this 

commenter’s opposition to this 

reporting requirement. The commenter’s 

reference to the 1986 opinion on 

directors’ fees refers to a letter by a 

senior Department official responding to 


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a request for an opinion concerning 

directors’ fees paid to union officers 

serving on a corporate board. The 

official concluded that ‘‘so long as the 

corporation pays the union officer/ 

director at the same rate that it pays the 

other directors, for the same services,’’

the payments are not reportable. The 

opinion letter reversed a 1983 

determination by another senior 

Department official that the fees must be 

reported. After again carefully reviewing 

this question and the example discussed 

above in the NPRM, the Department 

concludes that the NPRM correctly 

illustrated a payment that is required 

under section 202(a)(4) (a business 

dealing directly or indirectly with an 

official’s union) and section 404.2 of the 

Department’s regulations on reporting 

by union officials (a business dealing 

with a section 3(l) trust that involves the 

official’s union). 

If a union official serves on an 

employer’s board of directors and 

receives a fee, the employer has made a 

payment to a union official. Such 

payments are typically not of the kind 

referred to in section 302(c) because the 

exception concerning compensation to 

employees is not applicable unless the 

director is employed by the company on 

whose board he or she sits, an atypical 

status for a corporate director. Further, 

directors’ fees are not an article or 

commodity, and it is questionable 

whether such payments for these types 

of personal services can be said to have 

a prevailing market price. Significantly, 

these payments raise potential questions 

of a conflict of interest, due to the 

employer’s role in selecting the 

directors and setting the amount of the 

fee. A union member has an interest in 

knowing whether decisions made by his 

or her union officials may have been 

affected by the official’s competing 

personal financial interest. The 

commenter’s contention that no report 

should be filed where union-affiliated 

directors receive the same compensation 

as non-union directors is not persuasive. 

The LMRDA’s reach extends only to 

regulating the conduct of union 

officials, not to setting general standards 

of corporate governance. 

Thus, under today’s rule, no separate 

reporting exception is made for 

directors’ fees. A union official must 

report his or her receipt of directors’

fees when made by an employer whose 

employees the payment recipient’s 

union represents or is actively seeking 

to represent. Sections 202(a)(1), (2) and 

(5). Such fees will also be reportable 

when made by a business, a substantial 

part of which consists of buying, selling, 

or otherwise dealing with an employer 

whose employees the payment 

recipient’s union represents or is 

actively seeking to represent, or any part 

of which consists of buying, selling, or 

otherwise dealing with the recipient’s 

union, or a trust in which the recipient’s 

union is interested. Section 202(a)(4). 

Finally, as discussed in greater detail, 

the official must report his or her receipt 

of directors’ fees from an employer 

defined by this rule under 202(a)(6) 

including an employer in competition 

with an employer whose employees the 

payment recipient’s union represents or 

is actively seeking to represent. 

F. Why Officers of International, 

National, and Intermediate Labor 

Unions, in Addition to Their Obligation 

to Report Payments and Other Financial 

Benefits Received From Businesses and 

Employers That Have a Direct 

Relationship With the Component of the 

Union to Which They are Elected or 

Appointed, Must Also Report Payments 

and Other Financial Benefits Received 

From Businesses and Employers Whose 

Relationship Is With a Subordinate 

Body of Their Union 

In the NPRM, the Department 

proposed to clarify the obligation of a 

union official to report his or her 

interests in and payments (and those of 

the official’s spouse and minor children) 

from employers and businesses that 

have a relationship with the official’s 

union, albeit at a different hierarchical 

level than the level at which the official 

serves as an officer or employee. Under 

sections 202(a)(1) through (a)(5), union 

officers and employees must report 

payments from, holdings in, or 

transactions with: (1) An employer 

whose employees the filer’s labor 

organization represents or is actively 

seeking to represent; (2) a business a 

substantial part of which consists of 

dealing with an employer whose 

employees the filer’s labor organization 

represents or is actively seeking to 

represent; or (3) a business that deals 

with the filer’s labor organization or a 

trust in which the filer’s labor 

organization is interested. The scope of 

the reporting obligation thus depends 

on what organization constitutes the 

filer’s ‘‘labor organization.’’ As 

explained in the NPRM, many labor 

organizations consist of a three-tier 

hierarchy, such as a local labor 

organization, an intermediate body, and 

a national or international labor 

organization. 70 FR 51182. The NPRM 

explained that the Department’s 

proposal clarifies the reach of the 

disclosure obligation to include 

conflicts that arise between a union 

official and his or her responsibility to 

both the immediate unit of the union 

that he or she serves and any of its 

parent or subordinate bodies. The 

NPRM noted that the LMRDA Manual 

provides that an officer at the highest 

tier of a three-tier labor organization 

must report payments from businesses 

that deal with employers whose 

employees are represented by a 

subordinate union local. ‘‘An 

international union officer must report 

his income from [a] business [that has 

dealings with an employer whose 

employees a local union represents] 

even though he is not an officer of the 

local which represents the employees of 

the business, and even though his duties 

as an international officer do not 

include representation activities.’’

LMRDA Manual, § 241.100. The 

proposed rulemaking noted that 

members of an LMRDA-covered labor 

organization would have an interest in 

knowing if a subordinate labor 

organization purchases goods or 

services from a business entity owned 

by a higher level labor organization 

officer because local union personnel 

may choose to deal with this business 

entity out of fear of alienating the higher 

level officer. 70 FR 51183. 

The old instructions are silent about 

the obligation of an officer or employee 

to report interests or income from 

businesses that have a relationship with 

parent or subordinate labor 

organizations of the filer’s immediate 

union body, i.e., the particular 

component of the official’s union in 

which he or she holds office or is 

employed. See 29 U.S.C. 432(a)(4). In 

the same way, the instructions are silent 

as to whether labor unions affiliated 

with that of the union officer or 

employee are encompassed by the 

phrase ‘‘an employer whose employees 

such labor organization represents or is 

actively seeking to represent.’’ See 29 

U.S.C. 202(a)(1), (2), (5) (emphasis 

added). The Department proposed to 

establish a rule requiring a union 

official to report payments he or she 

received from a business or employer 

that had a relationship with any 

component of the overall union 

hierarchy to which the official belongs 

or whose employees any components of 

that union represent or are actively 

seeking to represent. To accomplish this 

result, the Department proposed to 

define ‘‘labor organization,’’ for 

purposes of Form LM–30 reporting as 

‘‘the local, intermediate, or national or 

international labor organization that 

employed the filer, or in which the filer 

held office, during the reporting period, 

and any parent or subordinate labor 

organization of the filer’s labor 

organization.’’ 70 FR 51174. 

Commenters were divided on the 

proposal, with most opposed to what 


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they viewed as an expanded reporting 

obligation. Representative of the 

comments favoring the proposal is the 

following: Union members deserve to 

know whether union officers or 

employees ‘‘receive benefits from 

businesses whose employees are 

represented by, or are actively seeking 

to be represented by, a parent or 

subordinate union, to form an opinion 

about whether a conflict of interests 

exists.’’ Representative of the opposing 

viewpoint is the following: Union 

officers do not have the resources to 

‘‘trace the repercussions of each 

potentially reportable interest * * * up 

or down the organizational hierarchy 

and throughout the national 

marketplace.’’ As discussed below, the 

Department has decided to modify the 

reporting obligation by excluding local 

officials from reporting financial 

interests in businesses and employers 

that are involved with higher level 

components of their union’s hierarchy 

and clarifying and reducing the 

reporting obligation of officials of 

national, international, and intermediate 

level unions. Thus, the Department has 

narrowed the reporting obligation from 

that proposed in the NPRM by adopting 

the existing ‘‘top-down’’ approach. See 

LMRDA Manual, § 241.100. 

The Department adopts a revised 

definition of ‘‘labor organization,’’

which reads in the instructions as 

follows: 

Labor organization means the local, 

intermediate, or national or international 

labor organization that employed the filer, or 

in which the filer held office, during the 

reporting period, and, in the case of a 

national or international union officer or an 

intermediate union officer, any subordinate 

labor organization of the officer’s labor 

organization. Item 6 of the Form LM–30 

identifies the relationships between 

employers and ‘‘your labor organization’’ or 

‘‘your union’’ that trigger a reporting 

requirement. Item 7 of the Form LM–30 

identifies the direct and indirect 

relationships between a business (such as a 

goods vendor or a service provider) and 

‘‘your labor organization’’ that trigger a 

reporting requirement. The terms ‘‘your labor 

organization’’ and ‘‘your union’’ mean: 

a. For officers and employees of a local 

labor organization. 

Your local labor organization. 

b. For officers of an international or 

national labor organization. 

Your national or international labor 

organization and all of its affiliated 

intermediate bodies and all of its affiliated 

local labor organizations. 

But note: A national or international union 

officer does not have to report, payments 

from, or interests in businesses that deal with 

employers represented by, or actively being 

organized by, any lower level of the officer’s 

labor organization. Such officers are also not 

required to report payments and other 

financial benefits received by their spouses 

or minor children as bona fide employees of 

a business or employer involved with a lower 

level of the officer’s labor organization. 

c. For employees of a national or 

international labor organization. 

Your national or international labor 

organization. 

d. For officers of intermediate bodies. 

Your intermediate body and all of its 

affiliated local labor organizations. 

But note: An officer of an intermediate 

body does not have to report payments from 

or interests in businesses that deal with 

employers represented by, or actively being 

organized by, any lower level of the officer’s 

labor organization. Such officers are also not 

required to report payments and other 

financial benefits received by their spouses 

or minor children as bona fide employees of 

a business or employer involved with a lower 

level of the officer’s labor organization. 

e. For employees of an intermediate body. 

Your intermediate body. 

The first sentence of the definition is 

also adopted as part of the definitions 

section of the Department’s regulations 

(to be codified as 29 CFR 404.1(f)). A 

summary of the principal comments on 

this issue and the Department’s 

response to the comments follows. 

Some commenters expressed a belief 

that the proposed definition is not 

supported by the statutory definition of 

‘‘labor organization’’ at section 3(i). 

Instead, they argued that the term ‘‘labor 

organization’’ refers to the immediate 

labor organization of the filer, exclusive 

of any parent and subordinate entities. 

A commenter claimed support for its 

argument in the legislative history of the 

LMRDA, specifically the Senate Report, 

which discusses the conflict of interest 

that develops when a union officer is 

involved in collective bargaining with a 

business in which he or she has a 

financial interest. Id., at 15, reprinted in 

1 Leg. History, at 411. Some commenters 

argued that interests and payments that 

would be reported under the 

Department’s proposal do not present 

conflicts of interest; one commenter 

explained that transactions involving 

parent and subordinate organizations 

are not reportable because the union 

officer is not bargaining on behalf of 

those organizations. 

The Department is not persuaded that 

the language of the statute compels, or 

even that it can be best read to support, 

the conclusion that Congress intended 

to confine a union official’s reporting 

obligation solely to the entity of a 

national or international union to which 

a particular union official is elected, 

appointed, or hired. As defined by the 

Act: 

‘‘Labor organization’’ means a labor 

organization engaged in an industry affecting 

commerce and includes any organization of 

any kind, any agency, or employee 

representation committee, group, association, 

or plan so engaged 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 and conditions of employment, and 

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. 

Section 3(i); 29 U.S.C. 402(i). This 

definition, broad in scope, does not 

answer the question posed by the 

Department’s proposal. Section 3(i) 

serves mostly a functional purpose, to 

distinguish labor organizations from 

other groups or associations to which 

employees may belong by focusing on 

the organization’s purpose and activities 

to collectively represent the employees 

in their dealings with employers about 

matters affecting various aspects of its 

members’ employment. Section 3(j) of 

the Act, 29 U.S.C. 402(j), albeit focused 

on the nexus between an organization 

and its effect on interstate commerce, is 

more helpful in discerning whether 

Congress proceeded upon a general 

premise that it was creating rights and 

obligations that would be specific to 

only a particular component of a larger 

organization, i.e., legislating on a 

separate, component-by-component 

basis. If Congress had that intent, the 

Act should provide precise boundaries 

between entities that otherwise are often 

combined in everyday usage. The 

statute, however, does not contain such 

precision. Congress instead took an 

approach, consistent with the common 

understanding of the term ‘‘labor 

organization’’ and its flexible usage in 

which the existence and overlapping 

responsibilities of entities that 

constitute or comprise a labor 

organization are inferred unless 

otherwise indicated. Thus, Congress 

understood that a union engages in 

representation through various means, 

including certification, or through the 

employer’s ‘‘recognition or acting as the 

representative of employees.’’ Id. This 

section also recognizes that the term 

‘‘labor organization’’ includes a ‘‘local 

or subordinate body’’ to such an 

organization and a higher body of which 

it is part. See sections 3(j)(1) through 

3(j)(5). 

As section 3(j) recognizes, the term 

‘‘labor organization’’ requires a flexible 

meaning, depending upon the particular 

context in which it is used. For 

example, while section 101 of the Act 

establishes a bill of rights conferring on 

‘‘every member’’ of a labor organization 

‘‘equal rights and privileges within such 

organization,’’ it obviously does not 


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create for every member of a national 

‘‘labor organization,’’ the same rights as 

members of a particular component of 

the organization in voting for that 

component’s officers, but it does confer 

such rights insofar as they are exercised 

within the ‘‘larger organization.’’ In 

contrast, section 104 takes a different 

approach; in imposing on a ‘‘labor 

organization’’ the duty to provide copies 

of collective bargaining agreements, it 

distinguishes between the particular 

duty ‘‘in the case of a local labor 

organization’’ and the duty ‘‘in the case 

of a labor organization other than a local 

labor organization.’’ This approach 

obviously contrasts with the approach 

taken by Congress in crafting the 

reporting obligation to file labor 

organization annual financial reports in 

section 201 of the Act. Although the 

filing obligation is cast in terms of ‘‘each 

labor organization,’’ the context makes 

clear that the obligation applies to the 

financial affairs of a particular 

component of a labor organization. With 

respect to section 202, the context does 

not make clear whether the obligation is 

limited to a particular component of the 

union or not. Each of the particular 

requirements may be applied to an 

official’s ‘‘immediate labor 

organization’’ or the ‘‘larger labor 

organization’’ to which the official 

belongs. As discussed below, the 

Department believes that this ambiguity, 

based on its review of the statute’s 

legislative history and public policy 

considerations, should be resolved in 

favor of disclosure. At the same time, as 

discussed below, the Department has 

taken into account the burden which 

such a reporting obligation may entail 

and has crafted a rule that achieves a 

balance between disclosure and undue 

burden. 

Although some commenters 

apparently would argue that the 

language in section 202 evinces an 

intention to restrict the reporting 

obligation to the official’s immediate 

union, this contention begs the question 

of what was intended by the referent, 

‘‘such labor organization,’’ as used in 

that section. As explained above, the 

structure of the LMRDA does not 

compel nor even strongly suggest that 

intention. The Department believes that 

the disclosure purposes of the Act are 

best met by giving the term ‘‘labor 

organization’’ its broader reach in 

applying the reporting obligation. As 

discussed above, section 3(j) recognizes 

that representation of employees is 

exercised in different ways, not merely 

through a union component that holds 

‘‘certified’’ status. Moreover, as the 

statute’s legislative history and the 

Department’s own experience bear out, 

national and international unions often 

exercise authority that affects 

subordinate bodies (and their members) 

in their relationship with employers 

even though a subordinate union holds 

the certification or recognition with the 

employer and may have retained formal 

authority over such matters. Given the 

broad reach of the term labor 

organization section 202’s use of the 

term ‘‘such’’ in combination with ‘‘labor 

organization’’ does not qualify or restrict 

the reporting obligation. 

The argument, in effect, that Congress 

intended to restrict a union official’s 

reporting obligation to the particular 

component of the union he or she serves 

as an officer or employee also is belied 

by the legislative history of the LMRDA. 

As discussed in greater detail herein, 

the genesis of the LMRDA’s reporting 

provisions was the conflicts of interest 

between the personal financial interests 

of national and international union 

officials and their duty to promote the 

interest of all the members of their 

union. The hearings of the McClellan 

Committee revealed numerous instances 

whereby such officials took actions to 

advance the interests of employers with 

whom they had obtained financial 

benefits or the officials’ own personal 

financial interests, overriding local 

officials and the interests of these locals. 

See Interim Report, at 4–5, 69–70, 73–

74, 85–86, 122–28, 130–31, 228, 230, 

240–41, 250, 252, 262, 265–66, 298, 

441–45; The Enemy Within, at 26, 94, 

97–98, 104–06, 219–20. At the same 

time, the hearing did not show a 

reciprocal pattern whereby local 

officials were able to interject 

themselves into matters handled at 

higher levels of their union to advance 

the interests of an employer with whom 

the local official had a financial 

relationship. 

Apart from the question of legal 

authority, several commenters 

expressed concern about the wisdom of 

the Department’s proposal, suggesting 

that the information sought by the 

Department did not pose a conflict of 

interest and that, even if it did, the 

burden of reporting outweighed any 

benefit from obtaining the information. 

For example, a commenter asserted that 

filers will be confused by the 

requirements and many individuals will 

unintentionally fail to report 

transactions because ‘‘they lack 

knowledge of any connection between 

the employer involved and the newly 

expanded ‘labor organization’ of which 

the individual is considered to be an 

officer or employee.’’

The Department believes that union 

members have an interest in knowing if 

an international, national, or 

intermediate union officer receives 

payments and benefits from, or holds an 

ownership interest in, a business that 

deals with subordinate labor 

organizations or trusts in which these 

labor organizations are interested. The 

national or international officer could 

use his or her position to influence 

subordinate labor organizations to 

utilize the services of that business. 

Moreover, his or her financial interests 

in those businesses create the same 

potential for putting the official’s 

personal financial interests above his or 

her duties to the union and its members. 

The proposed instructions include 

several examples of situations that 

would create a tension between a union 

official’s duty to the ‘‘larger union’’

which the official serves and his or her 

own personal finances. See 70 FR 

51189–91. Union members are entitled 

to this information in order to determine 

if their interests are best served where 

a union official has such financial ties. 

Without such disclosure, it is unlikely 

that a union member would be able to 

determine whether such payments 

reflected a ‘‘cut’’ of the union’s funds 

that were advanced for a particular 

purchase or to disguise a payment for 

services rendered by the official in favor 

of an employer whose employees are 

represented by or may be the target of 

organizing by a subordinate union of the 

official’s union. Such reporting also 

prevents circumvention or evasion of 

the Act’s other reporting obligations. 

Requiring union officials to report such 

payments not only allows members to 

‘‘follow the money’’ that otherwise 

would be identified in the union’s Form 

LM–2, but also increases the likelihood 

that the employer making the payment 

also will comply with its own 

obligations under section 203 of the Act. 

The concern about the conflicts 

between the personal financial interests 

of national and international officials 

and the interests of the union’s members 

at all levels of the union underlies the 

Department’s interpretation in the 

LMRDA Manual, at § 241.100, quoted 

above. After carefully considering the 

comments received on this point and 

reevaluating the legislative history, the 

Department has decided to impose the 

reporting obligation only on union 

officers who have dealings with 

businesses and employers that deal with 

components of the union subordinate to 

the level of the union which the official 

serves as an officer. In reaching this 

decision, the Department recognized 

that a much greater probability exists 

that an official with a position higher in 

the union hierarchy would be able to 


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wield influence on matters affecting a 

subordinate entity than the reverse 

situation, and that officials in higher 

positions are more readily able to obtain 

the information needed to meet this 

obligation than someone lower placed 

in the union hierarchy. For similar 

reasons, the Department has determined 

to limit the reporting obligation to the 

national or international union’s 

officers; under today’s rule, employees 

of the national or international union 

are not required to report payments or 

other financial interests that solely 

relate to subordinate entities of the 

international. Although section 202 

would allow such reporting, the 

Department believes that potential 

conflicts are much more likely to arise 

where a payment or other financial 

interest is received by a union officer 

rather than by an employee. 

Furthermore, given the typically much 

larger number of employees than 

officers in national and international 

unions, the overall reporting burden of 

the rule is minimized by excepting 

employees from this particular reporting 

obligation. To further reduce the overall 

reporting burden, the Department has 

decided to except from reporting 

payments or other financial interests 

received, as a bona fide employee, by an 

officer’s spouse or minor child in 

connection with dealings relating to 

subordinate components of the officer’s 

union—payments that if made to the 

officer would be reportable. In this way, 

the rule also represents a reduction in 

burden from the prior rule, which 

required officers of international unions 

to report all payments to their spouses 

and minor children from vendors to 

subordinate locals. 

As noted, the cited interpretation in 

the Department’s LMRDA Manual only 

refers to officers of an international 

union (and by extension to national 

unions); however, the same concerns 

that require such officers to report 

possible conflicts involving subordinate 

components of the union counsel for 

requiring intermediate union officers to 

report possible conflicts involving locals 

or members that the intermediate union 

oversees. The same potential for 

conflicts and manipulation exists as to 

the relationship between intermediate 

union officers and businesses and 

employers dealing with local labor 

organizations. For example, local union 

personnel may choose to deal with a 

business entity owned or controlled in 

whole or in part by an intermediate or 

national or international union officer 

out of fear of alienating the higher level 

officer. 70 FR 51183. 

Some commenters expressed concern 

that the Department’s proposal would 

impose a substantial burden on union 

officials, requiring them to identify the 

‘‘spider web like’’ connections between 

the various components of their union 

and the businesses and employers who 

are represented by any of the 

components or who any of the 

components is actively seeking to 

represent. As a general rule, local 

officials need only report payments 

from and other financial interests in 

businesses that sell products or services 

to the local or the local’s section 3(l) 

trusts and employers whose employees 

are represented by the local or it is 

actively seeking to represent. The only 

other payments or interests that they 

must report are those from ‘‘other 

employers’’ that involve identified 

conflicts of interest. Thus, for reporting 

purposes, the local official need only 

identify those entities which he or she 

holds an interest in or receives a 

payment from and the relationship 

between these entities and the official’s 

local. 

The burden is potentially greater for 

an officer of an international, national, 

or intermediate labor organization, but 

so too, as evidenced by the McClellan 

Committee hearings discussed above, is 

the potential for a conflict between the 

officer’s personal finances and his or her 

duty both to the component of the union 

in which he or she serves and its 

subordinate bodies. In the Department’s 

view, when officers have an ownership 

interest in a business, they should either 

have personal knowledge of whether the 

business deals with subordinate labor 

organizations or the ability to obtain this 

information from the business. While 

the information may be more difficult to 

obtain where the officer is an employee 

of the entity in question, rather than an 

owner, any burden is outweighed by the 

benefit to union members of obtaining 

reports of their official’s conflicts of 

interests. 

G. Why Union Officials Must Report 

Payments Under Union-Leave and NoDocking Practices Subject to an 

Exception for Payments of 250 Hours or 

Less Per Year Made in Accordance With 

a Collective Bargaining Agreement 

The Department proposed to require 

union officials to report payments 

received from employers for activities 

engaged in by the officials on the 

union’s behalf. The most common 

payments by employers to individuals 

for conducting union business are made 

pursuant to ‘‘union-leave’’ or ‘‘nodocking’’ policies established in 

collective bargaining agreements or by 

customary practice. Under a union-leave 

policy, the employer continues the pay 

and benefits of an individual who works 

full time for a union. Under a nodocking policy, the employer permits 

individuals to devote portions of their 

day or work week to union business, 

such as processing grievances, with no 

loss of pay. The Department proposed 

that an officer or employee would have 

to report any payments for other than 

‘‘productive work,’’ including unionleave and no-docking payments. The 

Department explained in its proposed 

definition of bona fide employee that 

these payments are not received as a 

bona fide employee of the employer; 

rather, they are received as a 

representative or employee of the union. 

Under the instructions to the old 

Form LM–30, such payments are not 

reportable if they are: ‘‘(a) Required by 

law or a bona fide collective bargaining 

agreement, or (b) made pursuant to a 

custom or practice under such a 

collective bargaining agreement, or (c) 

made pursuant to a policy, custom, or 

practice with respect to employment in 

the establishment which the employer 

has adopted without regard to any 

holding by such employee of a position 

with a labor organization.’’ See 

instructions, Part A, exception (iv); see 

also LMRDA Manual § 248.005. This 

section of the Manual, as noted in the 

NPRM, discusses the situation where a 

union officer ‘‘is excused from his 

regular work to handle grievances and 

[is] paid his regular wages while 

handling grievances.’’ The Manual 

states: ‘‘Such a situation will not 

normally require reports from the union 

officer * * * on the theory that the 

employee officer is being paid for work 

performed of value to the employer who 

is interested in seeing to it that 

grievances are immediately adjusted.’’

LMRDA Manual, § 248.005. See 70 FR 

51181. 

In the NPRM, the Department 

explained that the exception for 

payments made to a bona fide employee 

is required by statute, but that the 

statute is silent on the scope of the 

exception and specifically its 

applicability to ‘‘union-leave,’’ ‘‘nodocking,’’ and similar payments. The 

Department explained that under its 

proposal ‘‘to be exempt from reporting, 

payments and other benefits received as 

a bona fide employee of the employer 

must be attributable to work performed 

for, and subject to the control of, the 

employer.’’

The Department also stated that the 

LMRDA Manual improperly focused on 

whether the employer feels the money 

is well-spent; the correct issue is 

whether or not the official is a bona fide 

employee of the payer-employer during 

the time for which payment was made. 

In making its proposal, the Department 


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endorsed the statement: ‘‘Union-leave,’’

and ‘‘no-docking’’ payments may pose a 

conflict of interest since there are 

‘‘union negotiators who may agree to 

reduced benefits for the employees in 

exchange for financial support for the 

union.’’ Caterpillar v. UAW, 107 F.3d 

1052, 1060 (3d Cir. 1997) (Mansmann, 

J., dissenting). The Department noted its 

view that such payments should be 

disclosed to union members to enable 

them to evaluate the effect such 

payments might have on an official’s 

performance of his or her duties to the 

union. 

The Department adopts a revised 

definition of ‘‘bona fide employee,’’ as 

set forth in the next paragraph. Under 

today’s rule, payments to a union officer 

or employee under a union-leave or nodocking arrangements set forth in a 

collective bargaining agreement are 

exempt from reporting unless payment 

is for greater than 250 hours of union 

work during the filer’s fiscal year. 

Payments for union work totaling 

greater than 250 hours over the course 

of the filer’s fiscal year are reportable as 

are any payments that are not made 

pursuant to arrangements set forth in a 

collective bargaining agreement. 

The revised definition of ‘‘bona fide 

employee’’ reads: 

Bona fide employee is an individual who 

performs work for, and subject to the control 

of, the employer. 

Note: A payment received as a bona fide 

employee includes wages and employment 

benefits received for work performed for, and 

subject to the control of, the employer 

making the payment, as well as 

compensation for work previously 

performed, such as earned or accrued wages, 

payments or benefits received under a bona 

fide health, welfare, pension, vacation, 

training or other benefit plan, leave for jury 

duty, and all payments required by law. 

Compensation received under a ‘‘unionleave,’’ or ‘‘no-docking’’ policy is not 

received as a bona fide employee of the 

employer making the payment. Under a 

union-leave policy, the employer continues 

the pay and benefits of an individual who 

works full time for a union. Under a nodocking policy, the employer permits 

individuals to devote portions of their day or 

workweek to union business, such as 

processing grievances, with no loss of pay. 

Such payments are received as an employee 

of the union and thus, such payment must 

be reported by the union officer or employee 

unless they (1) totaled 250 or fewer hours 

during the filer’s fiscal year and (2) were paid 

pursuant to a bona fide collective bargaining 

agreement. If a filer must report payments for 

union-leave or no-docking arrangements, the 

filer must enter the actual amount of 

compensation received for each hour of 

union work. If union-leave/no-docking 

payments are received from multiple 

employers, each such payment is to be 

considered separately to determine if the 250 

hour threshold has been met. For purposes of 

Form LM–30, stewards receiving union-leave/ 

no-docking payments from an employer or 

lost time payments from a labor organization 

are considered employees of the labor 

organization. 

The filer will report, separately, for 

each such employer the total payments 

received from the employer during the 

filer’s fiscal year for the work performed 

on the union’s behalf. The filer must 

also calculate the hourly monetary value 

of any fringe benefits received, and 

include this figure in the total. 

The Department sought comments 

about any problems (or their absence) 

that have arisen by not requiring the 

reporting of payments received for 

union-leave, no-docking, and similar 

situations where a union official was 

paid for unproductive time, and 

whether or not there should be 

quantitative and/or qualitative 

distinctions to the disclosure obligation. 

Numerous comments, mostly opposed 

to the Department’s proposal, were 

received on this question. 

A few commenters favored the 

Department’s proposed definition of 

bona fide employee and the reporting of 

payments received by a filer in unionleave or no-docking situations. One 

commenter maintained that any 

payments made by an employer as part 

of no-docking or union-leave 

arrangements could result in union 

officials agreeing to trade off contract 

provisions that might benefit the entire 

bargaining unit in exchange for 

privileges that would benefit only union 

officials. Another commenter stated that 

union members may be unaware of such 

payments. His statement was based on 

his knowledge that one of his union’s 

officers received payment from the 

employer for union-related work and 

that such payment was not provided for 

in the collective bargaining agreement. 

He stated that other members of his 

union did not know that the official 

received these payments from the 

employer. 

A large majority of the comments 

argued in favor of retaining the nodocking and union-leave exception. One 

commenter argued that the Department 

was abandoning a ‘‘long-standing 

position without adequate justification.’’

This commenter cited a lack of statutory 

authority or legislative history of 

Congressional intent to require union 

officials to report such payments, 

adding that any benefit from such 

disclosure was outweighed by the 

increased burden on filers. One 

commenter cited the Senate 

subcommittee hearings on the LMRDA 

to support its position that bargained 

no-docking and union-leave provisions 

were ‘‘not forbidden by the AFL–CIO 

Code of ethical practices.’’ Hearings on 

Union Financial and Administrative 

Practices and Procedures before the 

Subcommittee on Labor and Public 

Welfare (1958) (‘‘1958 Senate 

Hearings’’), at 349. Many of these 

commenters stressed the ‘‘long-standing 

nature’’ of such practices by employers, 

and they particularly emphasized how 

‘‘commonplace’’ it is to find these 

provisions in collective bargaining 

agreements. One commenter asserted 

that at the time the LMRDA was 

enacted, just over half of all collective 

bargaining agreements involving 

manufacturers contained no-docking 

provisions. Several comments focused 

upon the Labor Management Relations 

Act and its interaction with the LMRDA, 

and argued that national labor policy is 

to encourage collective bargaining and a 

‘‘productive and harmonious 

workplace.’’ They noted that no-docking 

and union-leave provisions have been 

found lawful by the courts when they 

are part of a collective bargaining 

agreement. Some commenters 

maintained that sections 202(a)(1) and 

202(a)(5) are parallel to section 302 of 

the Labor Management Relations Act 

because each is concerned with the 

same kind of employer payments to 

union officials. They further argued that 

because section 302 has been 

interpreted by the courts to provide that 

‘‘payments pursuant to union-leave or 

no-docking arrangements are payments 

‘by reason of’ an officer or employee’s 

service as an employee of an employer,’’

sections 202(a)(1) and 202(a)(5) should 

be similarly interpreted to allow for the 

time union officers spend on unionrelated work to be considered the work 

of bona fide employees. See Caterpillar, 

Inc., 107 F.3d at 1052. 

Another commenter suggested that 

work performed under no-docking and 

union-leave scenarios is indirectly, if 

not directly, performed for the 

employer, and further stated that such 

pay by an employer is analogous to 

other employee benefits such as sick 

leave, military leave, jury leave, and 

similar fringe benefits. Many 

commentators argued that union-leave, 

no-docking, and similar payments are 

usually made under the terms of a 

collective bargaining agreement and that 

such payments are usually tied to the 

same rate of pay that the union 

representative would receive under the 

agreement for time worked at his or her 

trade. One commentator argued, in 

effect, that there was no conflict because 

the union would pay for the 

representative’s time if it was not 

provided for under the parties’


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negotiated agreement. Many argued that 

there is nothing private or secretive 

about such payments because the terms 

of the payments are disclosed by 

reading the negotiated agreement and 

that union members know that their 

representatives are paid for the time 

involved in contract administration. 

Many commenters explained that union 

stewards and other union 

representatives perform valuable tasks 

for the union and the employer; they 

expressed the concern that by imposing 

a reporting obligation on such payments 

future attempts to establish or continue 

these roles would ‘‘be chilled’’ which, 

in turn, could lead to ‘‘a breakdown in 

labor-management relations.’’ A few 

commenters were concerned that if the 

Department’s proposal was adopted 

employees would be less likely to 

volunteer for such positions and that 

union officials would be less likely to 

engage in workplace activities that are 

mutually beneficial to employers and 

unions. 

Some comments suggested that 

requiring reporting of payments 

included in collective bargaining 

agreements would burden employers. In 

this regard, a commenter stated that if 

the Department’s proposal is adopted in 

the final rule, unions will ‘‘inevitably 

want to negotiate a practice pursuant to 

which employers track and code any nodocking time on pay records of union 

officers and employees.’’ Another 

commented that the filing of ‘‘numerous 

pointless reports’’ would defeat the 

purpose of uncovering conflicts of 

interest. 

Two commenters offered possible 

alternative arrangements to the existing 

exception. One recommended that if the 

Department established a reporting 

obligation it should not require reports 

for activities that are less than two hours 

in length. This commenter explained 

that thirty minutes or less is usually 

required to resolve a question under a 

parties’ agreement and that meetings 

only rarely extend beyond two hours. 

By modifying the proposal in this way, 

it argued, the reporting burden would be 

minimal. The second commenter 

recommended that no reports be 

required of any payments unless they 

totaled $10,000 per year, an amount, it 

suggested, approximates about onequarter of a union steward’s annual pay. 

The LMRDA does not specifically 

address either the legality of payments 

made under union-leave or no-docking 

arrangements or the obligation, if any, 

for union officials to report such 

payments under section 202 of the Act. 

None of the commenters have identified 

any legislative history that would shed 

any light on this specific question, and 

the Department’s own research has 

uncovered none. As noted in the 

comments, the practice whereby a union 

official employed by an employer would 

receive his or her regular compensation 

while engaged in contract 

administration on behalf of the union 

was commonplace at the time the 

LMRDA was enacted. Contrary to the 

view of some that the absence of any 

discussion in the legislative history 

about this common practice evinces an 

intention to foreclose the reporting of 

such payments, the Department believes 

that this silence suggests that Congress 

simply did not consider such practices 

to be prohibited under the LMRDA or 

the Labor Management Relations Act 

and it did not express a view one way 

or another on the question of 

reportability. Moreover, the logic of the 

‘‘intention by silence’’ argument would 

require the exclusion of a myriad of 

payments and other financial benefits 

received by union officials, such as 

‘‘featherbedding’’ or ‘‘no show’’

payments, that were not explicitly 

identified by the language of section 202 

or its legislative history, 

notwithstanding their inclusion under 

any reasonable reading of the section’s 

language. 

The Department has reviewed the 

case law that has developed from 

employer challenges to the legality of 

employer payments to union officials 

for work performed on the union’s 

behalf. Most courts that have considered 

the question have found that such 

payments are not subject to criminal 

sanctions. For example, one court has 

stated that: ‘‘we see nothing in the 

language or logic of section 302(c)(1) [of 

the Labor Management Relations Act] to 

suggest that Congress did not intend to 

allow an employer to grant a bona fide 

employee who is a union official paid 

time off in order that he may attend to 

union duties.’’ BASF Wyandotte Corp. v. 

Local 237, International Chemical 

Workers Union, Local 227, 791 F.2d 

1046, 1050 (2d Cir. 1986). See also 

NLRB v. BASF Wyandotte Corp., 798 

F.2d 849 (5th Cir. 1986) quoting 

H.R.Rep. No. 245, 80th Cong., 1st Sess. 

28–29 (1947), ‘‘At the time of enactment 

of § 302, Congress was well aware that 

‘‘[e]mployers generally * * * allow 

representatives of the union, without 

losing pay, to confer not only with the 

employer but as well with employees, 

and to transact other union business in 

the plant.’’ See Caterpillar, Inc. v. 

United Auto Workers, 107 F.3d 1052, 

1056 (3d Cir. 1997) (‘‘By paying 

production workers for the part-time 

hours when they leave their regular 

duties, the company is paying for 

services not actually rendered for it, 

since those employees are already 

receiving their regular hourly wages and 

benefits for their production line work. 

Yet, no-docking arrangements have been 

consistently upheld by the courts as not 

in violation of § 302’’). See also Herrera 

v. United Auto Workers, 73 F.3d 1056 

(10th Cir. 1996) (adopting the reasoning 

of Herrera v. United Auto Workers, 858 

F. Supp. 1529, 1546 (D. Kan. 1994)); 

NLRB v. BASF Wyandotte Corp., 798 at 

855–57. At the same time, however, the 

courts have signaled that they may be 

less inclined to treat payments for 

union-leave as beyond criminal 

sanction. See Toth v. USX Corp., 883 

F.2d 1297, 1305; NLRB v. BASF 

Wyandotte Corp., 798 F.2d at 856 n. 4; 

BASF Wyandotte Corp. v. Local 227, 791 

F.2d at 1050. None of the cases, 

however, address the different, but 

immediate, question of whether such 

payments, without regard to their 

lawfulness, should be excepted from 

reporting under section 202 of the Act. 

The Department believes it significant 

that Congress in enacting the LMRDA 

uses the term ‘‘bona fide employee’’

only in section 202. Elsewhere it simply 

uses the term ‘‘employee’’ to designate 

a duty or obligation. See, e.g., section 

203(a), 203(e), section 502(a), section 

503, section 609. Thus, the Department 

concludes that Congress intended to 

limit the exception to individuals who, 

in fact, are receiving payment for 

activities performed on the payeremployer’s behalf. The Department’s 

reading also is consistent with the 

meaning generally given ‘‘employee’’

under the common law, where 

‘‘control’’ over an individual’s work is 

the essential component of this status. 

See, e.g., Nationwide Mut. Ins. Co. v. 

Darden, 503 U.S. 318, 322–24 (1992). 

The position adopted by the 

Department better comports with the 

language of the statute, and its inferred 

intended application, as discussed 

above, than an alternative reading that 

would interpret the term ‘‘bona fide 

employee’’ to include payments made 

by an employer for work performed on 

behalf of the union. Members have an 

interest in knowing the amount paid to 

union officers or employees by the 

employer for time spent on union 

business. This information would be 

significant for members in assessing the 

effectiveness of union officers and 

employees and in evaluating candidates 

for union office. For example, during 

collective bargaining negotiations, an 

official who enjoys union-leave or nodocking payments may agree, or feel 

pressure to agree, to reduced benefits for 

employees in exchange for increases in 

his or her employer payments as a 


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union representative. Similarly, where 

the continuation of the no-docking or 

union-leave practice in the agreement 

becomes a possible issue in 

negotiations, the official might be 

motivated, for personal reasons and 

contrary to the union’s best interest, to 

maintain what the official views as a 

meaningful and beneficial diversion 

from work at his or her trade. It also is 

conceivable that a union official may 

feel pressure to forego the zealous 

pursuit of a grievance on behalf of a 

union member for fear of alienating the 

employer and jeopardizing the 

continued availability of these 

payments. In such instances, the union 

official’s personal financial interests 

pose a clear conflict with the official’s 

duty to the union and its members. 

The Department received a number of 

comments indicating that union 

members already know that some of 

their union officials are paid by their 

employer for union-related activities. At 

the same time, other comments 

indicated that such information is not as 

common or as complete as suggested. 

Other comments received by the 

Department indicate that some 

payments occur without members’

knowledge and that members have 

incomplete information about the 

amount of such payments. The 

Department agrees that many union 

members are aware that some of their 

officials receive employer payments for 

union-related activities, especially 

where such payments are expressly 

provided for in a collective bargaining 

agreement, but it seems doubtful that 

such members are aware of the 

magnitude of such payments and other 

members are likely unaware that this 

practice exists. As noted by one 

commenter, it is unlikely that members 

will be aware of such payments where 

the collective bargaining agreement is 

silent about the practice Reporting such 

payments will allow union members to 

assess whether this arrangement could 

tempt a union official to put his 

personal interests in maintaining the 

arrangement above his or her duty to the 

union. A union official may well prefer 

to spend his or her time engaged in 

contract administration duties than, for 

example, performing manual work on a 

construction site or the shop floor, or 

processing insurance claims. 

The Department recognizes that a 

reporting requirement may impose some 

burden on union officials and 

employers that have ‘‘union-leave’’ and 

‘‘no-docking’’ practices. The Department 

acknowledges that payments by 

employers to union representatives 

often will benefit both union members 

and employers. Thus, the Department 

has considered carefully the comments 

suggesting that its reporting proposal 

would interfere with the effectiveness of 

such arrangements. 

The Department concludes that its 

proposal will not have a significant 

effect on labor-management relations 

practices. No commenter claimed that 

any single employer, never mind 

employers generally, authorizes 

payments to union officials without 

accounting at least informally for the 

time expended by such individuals in 

conducting union business. Employers 

no doubt have a wide range of practices 

in tracking such payments, with varying 

levels of scrutiny, but the rule adopted 

requires no special procedures or 

expense, and nothing any more 

burdensome than keeping a log of the 

amount of time expended and 

compensation received while on union 

business paid by the employer. 

Moreover, by excepting any reporting 

where payments approved under a 

collective bargaining agreement do not 

exceed payment for over 250 hours, 

union officials can work for over 30 

days with nothing to report. 

Additionally, the Department finds 

unpersuasive the comments that a 

reporting requirement will significantly 

impede the ability of unions to obtain 

members willing to perform the jobs of 

stewards or other union positions in 

which they receive compensation from 

their employer for union-related 

activities. As noted, the Department is 

not imposing any specific method of 

recordkeeping or accounting on union 

officials to comply with the disclosure 

obligation. Moreover, this practice will 

supplement the existing obligation of a 

union to report ‘‘lost time payments’’ it 

makes to officials and other members, 

either identified by a particular member 

(if he or she is paid more than $10,000 

per annum by the union) or otherwise 

in aggregated form. See section 

201(b)(3). 

The Department took into 

consideration the various concerns 

about the effect of its proposal in 

arriving at the reporting threshold of 

250 hours per year. Although union 

officers and employees will need to 

keep records to determine whether the 

250-hour threshold is exceeded, there is 

no reporting burden for those who do 

not exceed this threshold. Further, the 

recordkeeping time needed to determine 

whether the threshold is exceeded 

consists of nothing more than keeping 

track of the time one spends performing 

union work, and the amount paid, with 

no need, for example, to consult with 

third parties or obtain records 

maintained by others. The threshold of 

250 hours per year will help separate 

those who perform a significant amount 

of union work from those who do not. 

For example, a union officer who 

spends only four hours per week, or less 

than an hour per day, on union business 

would not have to report no-docking 

payments, because his union activities 

would correspond to 200 hours per year 

(subtracting two weeks for vacation), 

fewer than the 250-hour threshold. On 

the other hand, a steward, who is also 

a union officer or employee, who works 

2 hours per day on union business must 

report the payments he or she receives. 

In a five-day work week this would 

convert to 10 hours of union work per 

week and 500 hours per year 

(subtracting two weeks for vacation). 

Here, the value of the officer’s unionrelated work exceeds the 250-hour 

threshold and is reportable. The 

Department believes this approach to be 

better than one that would trigger a 

report if a particular meeting lasted 

longer than a prescribed amount of time 

or if an official’s pay for union-related 

activities exceeded a particular dollar 

value, such as the $10,000 suggested by 

one commenter. (Based on the 

commenter’s estimate of a typical 

steward’s annual pay, the 250-hour rule 

requires less reporting than a flat 

$10,000 threshold.) The former would 

depend upon establishing an average for 

the amount of time taken to resolve a 

particular contract administration issue, 

a difficult task even if the data necessary 

to establish such a benchmark existed 

and an impossible task on the current 

rulemaking record. The latter would 

impose a burden on higher paid union 

officials without distinguishing between 

the amount of time they perform work 

for which they were hired and work for 

the union. 

A commenter requested the 

Department to require union officials to 

report any ‘‘super-seniority’’ protection 

they receive by virtue of their union 

office. Some collective bargaining 

agreements provide layoff and similar 

benefits to union officials allowing them 

to continue on the employer’s payroll, 

ahead of other more senior employees, 

in order to provide continued 

representation of union members. The 

Department believes that this request, in 

part, is beyond the scope of the 

Department’s proposal, which, by its 

terms, is only concerned with employer 

payments for work performed on a 

union’s behalf. Super-seniority, as 

commonly understood, allows a union 

official to remain on the employer’s 

payroll for ‘‘production purposes,’’ not 

merely to receive payment for work 

undertaken on the union’s behalf. A 

union official who receives pay from his 


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nominal employer for union activities is 

subject to the general requirements set 

forth above without regard to the 

official’s super-seniority status. 

H. What Payments and Other Financial 

Benefits, Received From an Employer or 

Business Whose Employees Are Not 

Represented by the Union and Which 

Does not Conduct Business With the 

Official’s Union, Must Be Reported 

In the NPRM, the Department 

described section 202(a)(6) as a ‘‘catchall’’ for interests held in or payments to 

a union official (or his or her spouse or 

minor child) by an employer that would 

not otherwise be reportable under 

subsections 202(a)(1) through 202(a)(5). 

70 FR 51192. Under the proposal, any 

such interest in or payment by any 

employer would have to be reported, 

except for those ‘‘payments of the kind 

referred to in section 302(c) of the Labor 

Management Relations Act,’’ the 

exception expressly provided in section 

202(a)(6). 

The NPRM thus proposed as a general 

rule that any payments by any employer 

to any union official would have to be 

reported except for payments expressly 

excepted under section 302(c) of the 

Labor Management Relations Act. A 

union official would have to report the 

payment without regard to whether a 

collective bargaining or other direct 

relationship existed between the 

official’s union and the employer in 

question. In addition, the proposal 

identified some particular payments 

that would have to be reported: 

payments not to organize employees, to 

influence employees in any way with 

respect to their rights to organize, to 

take any action with respect to the 

status of employees or others as 

members of a labor organization, and to 

take any action with respect to 

bargaining or dealing with employers 

whose employees your organization 

represents or is actively seeking to 

represent. See 70 FR 51192. 

In the NPRM, the Department invited 

comments on this proposal as a general 

matter and more particularly whether 

section 202(a)(6) limits the reporting 

obligation to only payments that present 

an actual conflict of interest, whether 

such an interpretation is a permissible 

reading of the statute, and, if so, how 

the instructions could be written to 

implement this interpretation, without 

granting impermissible discretion to the 

filer to determine which financial 

matters are reportable. The Department 

also requested comments regarding the 

reporting of ordinary payments of wages 

and salaries of the spouse and/or minor 

children of the officer/employee 

because section 202(a)(6) could be read 

to require a union official to report all 

employment compensation paid by any 

employer to his or her spouse or minor 

child. 

After its review of the comments, the 

Department adopts a rule that is 

narrower than the proposal. Under 

today’s rule, where a payment or 

financial interest is not reportable under 

subsections (a)(1) through (a)(5) of 

section 202, it is reportable as follows. 

A report must be filed for any payment 

of money or other thing of value 

(including reimbursed expenses) from 

(1) An employer that is in competition 

with an employer whose employees the 

filer’s labor organization represents or is 

actively seeking to represent; (2) an 

employer that is a trust in which the 

filer’s labor organization is interested as 

defined in section 3(l) of the LMRDA; 

(3) an employer that is a non-profit 

organization that receives or is actively 

and directly soliciting (other than by 

mass mail, telephone bank, or mass 

media) money, donations, or 

contributions from the filer’s labor 

organization; (4) an employer that is a 

labor union that (a) Has employees 

represented by the filer’s union, (b) has 

employees in the same occupation as 

those represented by the filer’s union; 

(c) claims jurisdiction over work that is 

also claimed by the filer’s union; (d) is 

a party to or will be affected by any 

proceeding in which the filer has voting 

authority or other ability to influence 

the outcome of the proceeding; or (e) 

has made a payment to the filer for the 

purpose of influencing the outcome of 

an internal union election; or (5) an 

employer whose interests are in actual 

or potential conflict with the interests of 

the filer’s union or the filer’s duties to 

his or her union. This rule recognizes 

that it is impossible to specifically 

identify all potential conflict-of-interest 

payments. 

Today’s rule also adopts the rule set 

forth in the NPRM and the instructions 

to the old Form LM–30, at Part C, 

requiring a report for any payment from 

any employer or a labor relations 

consultant to any union official for the 

following purposes: 

• Not to organize employees; 

• To influence employees in any way 

with respect to their rights to organize; 

• To take any action with respect to 

the status of employees or others as 

members of a labor organization; 

• To take any action with respect to 

bargaining or dealing with employers 

whose employees your organization 

represents or is actively seeking to 

represent. 

Today’s rule adds to this list the 

following: ‘‘To influence the outcome of 

an internal union election.’’

The discussion below addresses the 

principal comments submitted on this 

issue and the Department’s response to 

those comments. 

No comments were received on the 

Department’s proposal to require 

reporting in the circumstances 

identified in the bulleted points above. 

As noted, these situations are included 

in the instructions to the old form and 

are retained. The additional point 

requiring disclosure where a union 

official receives a payment ‘‘to influence 

the outcome of an internal union 

election’’ has been added to clarify a 

point already encompassed by ‘‘take any 

action with respect to the status of 

employees * * * as members of a labor 

organization.’’

Two commenters supported an 

expansive reading of section 202(a)(6) to 

require a union official to report any 

and all interests in or payments from 

any employer. They argued that only by 

strictly limiting exceptions could the 

Department achieve the Act’s goal of 

full disclosure. A third commenter 

asserted that only an expansive reading 

of section 202(a)(6) would provide 

union members and the public with the 

information necessary for them to 

determine whether an interest in or 

payment by an employer could pose a 

conflict of interest. This commenter 

stated that Congress did not intend 

section 202(a)(6) to be given such a 

limited reading and that even if such a 

gloss was added to the statutory 

language filers would likely be unable to 

‘‘honestly, fairly, and accurately’’

determine whether a conflict exists. 

Several commenters expressed a 

contrary point of view. They asserted 

that unless section 202(a)(6) was 

narrowly applied, the Department 

would be creating a ‘‘general reporting’’

mandate, something that Congress 

intended to avoid in crafting section 202 

of the Act. As stated in one comment 

(citing to Senate Report, at 15, reprinted 

in 1 Leg. History, at 411): ‘‘The bill 

requires only the disclosure of conflicts 

as defined therein. The other 

investments of union officials and their 

sources of income are left private 

because they are not matters of public 

concern.’’ The same commenter saw 

evidence of a narrow construction from 

a statement in the House Report that 

section 202(a)(6) was intended to reach 

both ‘‘the union official who may 

receive a payment from an employer not 

to organize the employees,’’ and 

payments that may conflict with the 

official’s ‘‘fiduciary duties as a worker’s 

representative.’’ Other commenters 

relied on statements by Senator 

Goldwater as support for a narrow 

reading of section 202(a)(6). See 105 


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Cong. Rec. A5812 (daily ed. Oct. 2, 

1959), reprinted in 2 Leg. History, at 

1846) (the reporting requirements were 

directed at those transactions ‘‘which 

would constitute a conflict of interest,’’

such as ‘‘holdings or interest in or the 

receipt of economic benefits from 

employers who deal or might deal with 

such union official’s union’’). 

One commenter cited to testimony by 

Professor Archibald Cox before the 

Senate subcommittee that was 

considering this legislation: ‘‘The bill is 

narrowly drawn to meet a specific evil. 

It requires only the disclosure of 

conflicts of interest. The other 

investments of union officials and their 

other sources of income are left private 

because they are not matters of public 

concern.’’ See Senate Report, at 15, 

reprinted in 1 Leg. History, at 411. Cox 

was a Harvard law professor who played 

a pivotal role in drafting the legislation 

that ultimately became the LMRDA. 

Professor Cox also noted that the 

Kennedy bill that presaged the LMRDA 

was based, in part, upon the Ethical 

Practices Code formulated by the AFL–

CIO. Professor Cox stated that an officer 

who followed this Code would have 

‘‘virtually nothing to disclose to the 

public.’’ Hearings on S. 505 before the 

Subcommittee on Labor of the Senate 

Committee on Labor and Public Welfare 

(1959) (‘‘1959 Senate Hearings’’), at 123. 

A few commenters conceded that the 

statute does not refer to ‘‘conflicts of 

interest,’’ but noted that forty years of 

Department enforcement have limited 

this section to conflict of interest 

situations. In this connection, they cited 

LMRDA Manual § 248.005 that states, in 

part: ‘‘[Section] 202(a)(6) is designed for 

those situations which pose conflict of 

interest problems which are not covered 

in the previous five sections of 202.’’

Other commenters argued that the 

inclusion of ‘‘labor relations consultant’’

and the reference to section 302(c) of the 

Labor Management Relations Act evince 

an intention to tie the reporting 

obligation to matters that directly 

involve labor-management activities. 

Two comments expressed opposition to 

the reporting of ordinary payments of 

wages and salaries to the spouse and/or 

minor children of the officer/employee. 

The Department is persuaded that 

section 202(a)(6) is best read to require 

reporting by union officials only where 

such interests in or payments by 

employers have the evident potential to 

pose a conflict between the official’s 

own financial interests and the official’s 

duty to his or her union and which 

would not otherwise be captured by the 

other provisions of section 202(a). While 

the language of the statute can be read 

more broadly, the Department believes 

that a better reading is one which avoids 

redundant reporting of matters already 

included in the previous five 

subsections but ensures that all 

significant transactions and other 

payments to the official, his or her 

spouse, or minor children that may 

impact upon the responsibilities of a 

union official to the union he or she 

represents are reported. The Department 

believes that its construction of section 

202(a)(6) hews to the accepted premise 

that Congress did not intend that union 

officials would have to disclose 

virtually all their financial affairs, while 

also ensuring that members receive 

information about situations other than 

those identified in sections 202(a)(1) 

through 202(a)(5) that may pose 

potential conflicts of interest for union 

officials. The Department’s construction 

reasonably targets employers that could 

influence the conduct of union officers 

and employees and requires the 

disclosure of an official’s financial 

information only in those situations. 

Four of the first five subsections of 

section 202(a) have as their focus 

transactions and interests, on the one 

hand, between a union official (or 

indirectly through his or her spouse or 

minor child) and, on the other, the 

official’s own union or an employer 

whose employees the union represents 

or seeks to represent. The other 

subsection (section 202(a)(3)) has a 

similar focus, but requires reporting on 

interests and payments involving a 

business that conducts a substantial part 

of its business with an employer whose 

employees the union represents or seeks 

to represent. 

The Department believes that the 

focus of these provisions is instructive 

in discerning the scope of the reporting 

obligation encapsulated by section 

202(a)(6). In each instance, the object of 

the reporting is the official’s union 

status and an employer whose 

employees the union represents or seeks 

to represent. From this, the Department 

infers that section 202(a)(6) also has as 

its object the relationship between the 

official’s union and a particular 

employer that could pose a conflict 

between the official’s own personal 

interests and the obligation his or her 

union holds to employees it represents 

or is actively seeking to represent, or 

who provide a suitable target for 

representation. Thus, from this vantage 

section 202(a)(6) can be seen to target 

payments by or interests held in an 

employer only when the employer has 

a direct interest in the relationship 

between the official’s union and an 

employer whose employees the union 

represents or would seek to represent. 

And by its terms, section 202(a)(6) only 

captures payments by ‘‘employers.’’

Thus, the Department cannot require a 

union official to report payments under 

section 202(a)(6) from an individual or 

an entity that is not an ‘‘employer.’’

A relationship between, on the one 

hand, a union official and, on the other 

hand, a section 3(l) trust, labor 

organization, and not-for-profit 

organization, including charities, along 

with ‘‘competitors’’ to employers whose 

employees the union represents or 

would seek to represent, may trigger a 

reporting obligation under today’s rule. 

These entities usually are ‘‘employers,’’

but sometimes not. A union official is 

under no obligation to report these 

payments unless they are received from 

an employer. As noted, section 202(a)(6) 

excepts ‘‘payments of the kinds referred 

to in section 302(c) of the Labor 

Management Relations Act.’’ These 

payments notably include payments 

received as compensation for services as 

a current or former employee of the 

employer making the payment and as a 

general rule payments made to or 

received from a trust fund set up for the 

sole and exclusive benefit of employees 

and their dependents. See sections 

302(c)(1) and (5) (note that the latter 

contains several provisions that could 

affect reportability in some specific 

circumstances). As implied by the 

section 302(c) proviso to section 

202(a)(6), Congress presumed that a 

payment that arises from a bona fide 

employment relationship between an 

employer and its employee typically 

will be above board with little potential 

to pose a conflict between the union 

official’s personal interests and the 

official’s duty to his or her union. For 

the same reasons, a union official is not 

required under today’s rule to report 

payments received by the official’s 

spouse or minor child as regular 

compensation from their employer or as 

a benefit under the arrangements 

permitted under section 302(c). 

Thus, under this interpretation of 

section 202(a)(6), a union official would 

have to report a payment received from 

an employer that competes with a 

company whose employees are 

represented by the official’s union 

unless it was received by the official as 

regular compensation for his current or 

past employment. For example, if a 

union official receives a benefit such as 

a paid vacation or a gift of golf clubs 

from an employer that competes with an 

employer whose employees the official’s 

union represents or is actively seeking 

to represent, the official must report the 

benefit. In this example, the union 

official would have to disclose the gift, 

even if the official is an employee of the 

donor, except in the unlikely event that 


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such benefit is part of the official’s 

regular compensation as an employee of 

the donor. In this situation, the union 

official faces an obvious potential 

conflict between his personal finances 

and the duties he or she owes to the 

union and its members. Where, for 

example, the union’s negotiations will 

set the going wage rate for particular 

work within the relevant market, an 

official may be more attuned to 

concerns about rising labor costs if he or 

she is receiving payments from a 

company whose operations are less 

efficient than those of the represented 

employer. Similarly, a union official 

may be less vigilant in challenging a 

represented employer’s decision to 

withdraw employer-paid dental 

coverage if he or she holds an interest 

in or receives payments from a vendor 

that would provide alternative coverage 

sponsored by the official’s union. 

Similarly, a union official must report 

a payment he or she receives from a 

trust that is an employer unless it is a 

‘‘payment[ ] of the kind referred to in 

section 302(c) of the Labor Management 

Relations Act.’’ As just discussed, a 

union official will not have to report 

compensation received as an employee 

of a trust or as a general rule payments 

received as a beneficiary of the trust. 

Any ‘‘special payments’’ or gifts, 

however, will have to be reported unless 

they are insubstantial as defined in 

today’s rule. 

Under today’s rule, a union official 

will have to report a payment or other 

financial interest he or she receives from 

a not-for-profit employer that receives or 

is actively and directly soliciting (other 

than by mass mail, telephone bank, or 

mass media) money, donations, or 

contributions from the official’s union. 

The potential conflict arises because 

such a payment could influence the 

official’s activities in approving or 

overseeing the union’s contribution to 

the charity. 

The remaining situations for which a 

report will be required relating to an 

employer (other than one whose 

relationship is described by sections 

202(a)(1) through 202(a)(5)) involve 

payments received by a union official 

from a union-employer (other than his 

or her own) where the official’s personal 

financial situation poses a plain conflict 

with his or her duties to the union in 

which the official serves as an officer or 

employee. Payments must be reported 

where the payment received by the 

union official is made by a unionemployer that 

• Has employees represented by the 

official’s union, e.g., the official’s union 

represents the support and professional 

staff at the headquarters of a national or 

international union, or it actively seeks 

to represent; 

• Has employees in the same 

occupation as those represented by the 

official’s union; 

• Claims jurisdiction over work that 

is also claimed by the official’s union; 

• Is a party to or will be affected by 

any proceeding in which the official has 

voting authority or other ability to 

influence the outcome of the 

proceeding; 

• Has made the payment to the filer 

for the purpose of influencing the 

outcome of an internal union election. 

In each of these situations, a payment 

could serve as an inducement to receive 

favorable treatment from a union whose 

interests are clearly adverse to the 

official’s own union—either in their 

labor-management relationship, as 

actual or potential competitors for the 

same members or work for such 

members, or actual or potential 

protagonists on disputes or other interunion matters. In the first situation, any 

payment could serve as an inducement 

to agree to lower negotiated wages for 

the members of the official’s own union. 

In the second and third situations, the 

two unions are ‘‘competitors’’ for the 

same or potential members and the 

work they perform, thus placing them in 

an adversarial position. In the fourth 

situation, the payment could reflect an 

inducement for favorable treatment in 

the proceeding at the expense of the 

official’s own union that may have an 

interest adverse to the party making the 

payment. In the last situation, the union 

official, either directly or indirectly, has 

received a personal benefit (gaining 

money to advance the official’s own 

political agenda within his or her own 

organization) that could serve as an 

inducement to advance the interests of 

the party making the payment at the 

expense of the interests of the official’s 

own union. 

The Department has attempted to 

clarify the form by describing these 

situations that present actual or 

potential conflicts of interest. Union 

officials who receive payments in these 

situations can know, without ambiguity, 

of the need to file Form LM–30. It is 

impossible, however, to delineate with 

precision all potential conflict-ofinterest payments. For that reason, the 

Department has chosen to retain its rule 

that, under section 202(a)(6), all 

payments from employers whose 

interests are in actual or potential 

conflict with the interests of a filer’s 

labor organization or a filer’s duties to 

his or her labor organization must be 

reported. 

I. When Is a Union ‘‘Actively Seeking To 

Represent’’ Employees, Thereby 

Triggering a Union Official’s Obligation 

To Report Payments and Other 

Financial Benefits Received From the 

Employer That Is the Subject of the 

Organizing Drive 

The term ‘‘actively seeking to 

represent’’ appears several times in 

section 202; this term does not appear 

elsewhere in the LMRDA. The old 

instructions do not define this term. In 

the NPRM, the Department proposed to 

define ‘‘actively seeking to represent’’ to 

mean that a labor organization has taken 

steps during the filer’s fiscal year to 

become the bargaining representative of 

the employees of an employer, 

including but not limited to: 

• Sending an organizer to an 

employer’s facility; 

• Placing an individual in a position 

as an employee of an employer that is 

the subject of an organizing drive and 

paying that individual subsidies to 

assist in the union’s organizing 

activities; 

• Circulating a petition for 

representation among employees; 

• Soliciting employees to sign 

membership cards; 

• Handing out leaflets; 

• Picketing; or 

• Demanding recognition or 

bargaining rights or obtaining or 

requesting an employer to enter into a 

neutrality agreement (whereby the 

employer agrees not to take a position 

for or against union representation of its 

employees); or otherwise committing 

labor or financial resources to seek 

representation of employees working for 

the employer. 

Comments were invited as to the 

merit and clarity of the listed activities 

and whether other examples would be 

helpful. 70 FR 51180. Comments were 

sought as to whether it is appropriate to 

trigger the reporting obligation on the 

decision to organize an employer’s 

workforce distinct from taking the first 

concrete step to organize. After review 

and consideration of the comments, the 

Department has concluded that the 

definition should be modified to clarify 

that a report need only be filed where 

the active steps have occurred during 

the filer’s fiscal year. As discussed 

below, this clarification partly addresses 

the concern of some commenters that 

such reporting may disclose 

prematurely a union’s efforts to organize 

an employer. The Department has also 

modified the definition to clarify that 

leafleting and picketing by a union, 

though presumptive evidence of 

actively seeking to represent employees 

of an employer whose operations are 


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targeted by the union, will not trigger 

the reporting obligation with respect to 

the targeted employer if the union’s 

activity is entirely without any 

organizational object. Otherwise, the 

definition of ‘‘actively seeking to 

represent’’ is identical to that proposed. 

As noted in the NPRM, the proposed 

definition, in large part, is based on a 

statement from the legislative history. 

See Senate Report, at 15, reprinted in 1 

Leg. History, at 411 (The phrase 

‘‘actively seeking to represent’’ denotes 

‘‘more than that the union hopes some 

day to become the bargaining 

representative of a group of employees 

or claims jurisdiction to organize them. 

It requires specific organizational 

activities such as sending organizers 

into a community, handing out leaflets, 

picketing, or demanding recognition 

and bargaining rights’’). House Report, 

at 11; reprinted in 1 Leg. History, at 769. 

As noted in the NPRM, the Department 

believes that the term ‘‘actively seeking 

to represent’’ is intended to distinguish 

between situations where a union has 

taken concrete steps to organize and 

those where the union merely has an 

interest in organizing employees of the 

employer in question. For example, a 

union may wish to represent employees 

of a certain employer, and may even 

have finalized an organizing plan, but 

has not yet begun to implement the 

plan. The Department explained that in 

such circumstances the union is not yet 

actively seeking to represent employees 

of this employer. 

Commenters argued that the 

Department’s proposal would 

improperly impede a union’s organizing 

efforts. One commenter stated that 

Congress intended to limit this term to 

only those instances where the union 

had instituted some kind of 

organizational activity, either sending 

organizers into the plants or picketing or 

distributing leaflets within the plant. 

The Department disagrees with the 

suggestion that its proposal departs from 

the legislative history. The Department’s 

proposal is consistent with the 

illustrations provided in the Houses and 

Senate reports on the LMRDA, as quoted 

in the NPRM. These reports explicitly 

recognize that this reporting obligation 

is not solely triggered by in-plant 

activity. Among the illustrated 

situations that would trigger a reporting 

obligation is where a union ‘‘send[s] 

organizers out into the community.’’ In 

context, it is plain that this term refers 

to a community in the sense of the 

geographic area within which an 

employer’s facilities are located, not a 

limited application to employees 

comprising a community delimited by 

the employer’s facilities. 

Some commenters expressed concern 

about the difficulty of applying the 

general requirement to report payments 

that arise after a union ‘‘otherwise 

commits labor or financial resources to 

seek representation of employees 

working for a particular employer.’’

They also argue that this proviso may go 

beyond the asserted limitation intended 

by Congress in describing this aspect of 

the reporting obligation to ‘‘specific 

organizational activities.’’ The 

Department recognizes that this factor 

lacks the specificity of the other factors 

used to describe the reach of the term 

‘‘actively seeking to represent.’’ Its 

wording, however, is deliberate in order 

to capture the general purpose of the 

test and reduce any prospect that a filer 

would read the list of factors as 

exhaustive. At the same time, this factor 

was designed to distinguish between 

general union strategizing or planning, 

which would not be reportable, and 

concrete activities that have been 

directed at a particular employer. In this 

connection, one commenter raised a 

concern that the test proposed by the 

Department failed to clearly indicate 

whether a decision by the union to 

undertake organizing activity in the 

future triggers the reporting obligation 

or whether the concrete, future action 

triggers the reporting requirement. The 

instructions have been clarified to make 

plain that the former does not trigger the 

reporting obligation. 

Another commenter asserts that the 

Department should establish ‘‘a bright 

line rule’’ where the Department would 

define ‘‘actively seeking to represent’’ as 

(1) Having a pending election petition 

before the NLRB during the reporting 

period at issue, or (2) demanding 

voluntary recognition from the 

employer during the reporting period 

involved. The Department disagrees that 

the bright line suggested above would 

be beneficial. The suggested rule is 

unnecessarily narrow and would fail to 

effectuate the clearly expressed 

intention to include other concrete steps 

that evidence ‘‘actively seeking to 

represent,’’ including leafleting and 

picketing, as identified in the House and 

Senate reports discussed in the NPRM. 

Commenters suggest that payments 

and activities relating to ‘‘area 

standards’’ picketing should not be 

considered as steps taken to actively 

represent an employer’s workers. 

Instead, these commenters asserted 

leafleting and picketing often are used 

in area pay and benefit standards 

disputes, serving as just a preliminary 

step to determine whether or not to 

initiate an organizing campaign. 

Therefore, according to the commenter, 

such steps should not trigger a reporting 

obligation. The Department believes that 

there is a reasonable basis for treating 

leafleting and picketing by a union as 

evidence that a union is ‘‘actively 

seeking to represent’’ the employees of 

the targeted employer and for triggering 

a reporting obligation where there are 

other indicia of a union’s effort to 

‘‘actively seeking to represent’’ such 

employees. In this regard, the 

Department notes that there is no 

evidence that Congress intended a 

limited application of the reporting 

obligation to situations where the 

leafleting or picketing is solely 

undertaken for the object of organizing 

an employer’s workforce. Moreover, 

although the commenter suggests 

otherwise, it is the Department’s view 

that in many instances informational or 

standards picketing reflects a union’s 

first concrete steps to organize an 

employer and, as such, is an action 

within the intended reach of ‘‘actively 

seeking to represent.’’ At the same time, 

the Department recognizes that there are 

instances where such picketing or 

leafleting is wholly unrelated to 

organizational or representational 

objectives. For example, if a union 

pickets a sporting goods retailer solely 

for the purpose of alerting the public 

that the retailer is selling goods that are 

made by children working in oppressive 

conditions in violation of accepted 

international labor standards, the 

picketing in these circumstances would 

not meet the ‘‘actively seeking to 

represent’’ standard. The revised Form 

LM–30 instructions in today’s rule alert 

filers to this distinction. 

A commenter endorses the inclusion 

of ‘‘requesting an employer to enter into 

a neutrality agreement’’ in the proposed 

definition as a concrete example of 

‘‘actively seeking to represent’’ an 

employer’s employees. It asserted that 

neutrality agreements have become the 

preferred method of organizing 

employees. No comments were received 

suggesting that entry into a neutrality 

agreement does not reflect an active step 

to represent the employer’s employees. 

Thus, the Department will continue to 

recognize the execution of such 

agreements as evidence that a union is 

actively seeking to represent the 

employees of the employer with whom 

the agreement was reached. 

Some commenters expressed the 

concern that exposing a union’s use of 

‘‘salts’’ in an organizing campaign 

would make the employer aware of the 

campaign and hinder organizing efforts 

and might target the official, his or her 

spouse, or minor child for dismissal by 

the employer if any of them are working 

as the ‘‘salt.’’ As reflected in the 

Department’s proposal, the term ‘‘salt’’


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36132 Federal Register / Vol. 72, No. 126 / Monday, July 2, 2007 / Rules and Regulations 

refers to an individual who applies for 

a position with an employer that is the 

subject of an organizing drive intending 

to surreptitiously work on the ‘‘inside’’

in support of the union’s organizing 

activities and as it directs. 

The Department recognizes that some 

organizing activities are initiated 

without notice to the public or an 

employer, but there would appear to be 

few situations, where the disclosure of 

a reported interest on the Form LM–30 

would be the first open 

acknowledgment of the union’s active 

efforts to represent employees. In 

response to the concern that the 

disclosure of a reportable interest would 

alert an employer to the presence of a 

‘‘salt’’ in the employer’s workforce, the 

Department notes that payments from 

the employer for whom the salt 

performs the manufacturing or other 

work for which he was hired are 

payments to a bona fide employee; as 

such, these payments would not be 

reportable. Likewise, any payments by 

the union to the salt as an employee of 

the union also would not be reportable 

on the Form LM–30. The Department 

recognizes that there may be some 

instances, however, where an official 

would have to file a Form LM–30 

because of the employment of salts by 

a particular employer. For example, if a 

union official owns a cleaning service 

that does substantial business with a 

company in which the official’s union 

has placed ‘‘salts,’’ the union official 

would have to file a report, disclosing 

payments from the company to the 

official’s cleaning service. Although this 

report if it came to the attention of the 

target employer would disclose the 

union’s objective to organize its 

employees, if and when the employer 

becomes aware of such information, the 

employer likely would already have 

learned of the union’s campaign. There 

would ordinarily be a substantial delay 

between the salt activity and the report’s 

filing. Form LM–30s are filed annually 

and are due 90 days after the end of the 

filer’s fiscal year. Thus, the definition of 

actively seeking to represent is not 

expected to significantly compromise 

the use of salts in organizing. 

The Department acknowledges, 

however, that the timely submission of 

the Form LM–30, in some instances, 

may put at risk the secrecy of a union’s 

organizing campaign and the 

relationship that gives rise to the 

reporting obligation. For this reason, the 

Department has carefully considered 

whether it would be appropriate to take 

steps to minimize the risks from such 

disclosure. 

In crafting the Form LM–2, the 

Department, sensitive to union concerns 

about the premature disclosure of their 

organizing tactics, established reporting 

categories and itemization rules 

designed to minimize similar risks, 

while at the same time adhering to the 

requirements of section 202 of the Act, 

29 U.S.C. 431. See 68 FR 58395–97. 

Although, for example, the Department 

chose to allow the disaggregated 

reporting of some organizing 

expenditures, it rejected the option to 

shield from disclosure all expenditures 

related to ‘‘salts.’’ The Department 

recognized that section 201(b)(3) 

expressly provided that unions annually 

report the ‘‘salary, allowances, and other 

direct or indirect disbursements 

(including reimbursed expenses) to each 

officer and also to each employee who 

* * * received more than $10,000 in 

the aggregate from such labor 

organization and any other labor 

organization affiliated with it or with 

which it is affiliated * * *.’’ 29 U.S.C. 

431(b)(3). Thus, as recognized in the 

preamble to the Form LM–2: ‘‘[I]f a 

‘‘salt’’ is paid $10,000 or more per year 

as an employee of the union, the union 

is obliged by statute to list him by name 

on the Form LM–2 and to report the 

amount of his compensation.’’ The 

statutory language added support to the 

policy determination in the Form LM–

2 context that ‘‘salt’’ information was 

necessary for union members to be 

properly informed about their union’s 

finances. In contrast, the same policy 

reasons did not, in the Department’s 

view, compel that a union itemize 

organizational expenses (other than 

these payments to union officials). The 

Department reasoned that even without 

such itemization, the particular 

information would be available to union 

members upon request pursuant to 

section 201(c), 29 U.S.C. 431(c). See 68 

FR 58397; see also 68 FR 58386–87. 

Thus, the Department decided to allow 

Form LM–2 filers the option to report 

such payments without itemization, 

recognizing that the information relating 

to these expenditures would be made 

available to union members under 

section 202(c) of the LMRDA. 

With regard to the immediate Form 

LM–30 reporting issue, the Department 

is guided by the language of section 

202(a)(1), (2) & (5) of the LMRDA, 

requiring union officials to disclose 

specified conflicts of interest, including 

‘‘any income or other benefit with 

monetary value * * * derived * * * 

from an employer whose employees 

such labor organization * * * is 

actively seeking to represent.’’ 29 U.S.C. 

432(a)(1), (2) & (5). In the Department’s 

view, this language evinces a particular 

concern by Congress about conflicts that 

arise while a union is actively seeking 

to represent employees. The same 

concern is the basis for the Department’s 

determination, as a matter of policy, that 

such payments pose serious questions 

regarding conflicted loyalties (including 

the possibility of collusion in some 

instances). As such this information is 

particularly important to union 

members, the Department, and the 

public. The need for transparency, thus 

outweighs, in the Department’s view, 

any risk to a union’s covert organizing 

activities by requiring the disclosure of 

any interests, transactions, and payment 

that arise while the filer’s union is 

actively seeking to represent the 

targeted employees. Further, the statute 

authorizing the Form LM–30, 29 U.S.C. 

432, contains no provision that would 

mitigate the lack of transparency caused 

by crafting a filing exemption for 

payments that would disclose the use of 

salts in organizing. Unlike the statute 

authorizing the Form LM–2, 29 U.S.C. 

431, there is no statutory provision for 

union members to obtain records from 

union officers and employees necessary 

to verify the Form LM–30. 

Two commenters argued that the 

proposed definition poses particular 

difficulties for a local official who may 

be unaware of organizing activities 

undertaken by his or her international 

union or an international official that is 

unaware of a local’s efforts to organize 

a particular employer. Similarly, several 

officers from large construction unions 

felt that the reporting requirement was 

too broad since it would be difficult for 

officers and employees to know about 

all instances of picketing, billing and 

other initial organizing efforts that go on 

in a single reporting year. The 

Department recognizes that the 

expanded scope of reporting may pose 

some difficulties for particular union 

officials. In consideration of this 

concern, as reflected in the comments 

summarized above, the Department has 

narrowed the scope of the reporting 

obligation for local and intermediate 

officers from that proposed in the 

NPRM. They do not have to report on 

matters affecting higher levels within 

their union. Officers of a national or 

international union, however, remain 

responsible for reporting activities 

affected by picketing or leafleting by 

subordinate units of their organization. 

Further, union officers and employees 

voluntarily receive reportable payments 

from or hold reportable interests in 

employers. The union officer or 

employee is perfectly free to refrain 

from taking such payments or holding 

such interests. If there is a fear that an 

organizing campaign could possibly be 


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exposed by filing a Form LM–30 the 

union officer or employees does not 

have to take the payment or hold the 

reportable interest. 

One commenter recommended that 

the Department clarify that payments 

from employers not to organize an 

employer, i.e., attempts at ‘‘labor 

peace,’’ should be reported. Another 

suggested that neutrality agreements 

‘‘are especially ripe for sweetheart 

deals’’ where union officers and union 

employees can benefit at the expense of 

bargaining unit employees as, without 

reporting requirements for these 

instances, ‘‘it is nearly impossible’’ for 

workers to learn what gifts an employer 

has given a union or the union’s 

officials during an organizing drive. 

Apart from the asserted vulnerability of 

neutrality agreements to manipulation 

by employers and union officials, these 

commenters express a concern oft 

repeated in the comments that union 

officials should be required to report all 

payments they receive from employers. 

As discussed herein, Congress did not 

intend to impose such a sweeping 

obligation. Moreover, the Department is 

confident that today’s final rule requires 

the disclosure of any payments that 

would impede the collective bargaining 

or internal union rights of a union’s 

members. 

J. How Union Officials Will Determine 

Whether an Entity From Which They 

Receive a Payment or Other Financial 

Benefit Does a ‘‘A Substantial Part’’ of 

its Business With an Employer Whose 

Employees Are Represented by the 

Official’s Union or the Union It Is 

Actively Seeking To Represent 

Section 202(a)(3) requires union 

officials to report any interests in and 

payments from, ‘‘any business a 

substantial part of which consists of 

buying from, selling or leasing to, or 

otherwise dealing with, the business of 

an employer whose employees such 

labor organization represents or is 

actively seeking to represent’’ (emphasis 

added). The old rule does not define 

‘‘substantial part.’’ The Department 

proposed to define this term as 5% or 

more of the business’s annual receipts. 

The Department requested comments on 

various aspects of this proposal, 

including whether a percentage 

threshold should be imposed, whether 

the percentage threshold should be 

higher or lower than 5%, whether a 

percentage of receipts is the appropriate 

consideration, and whether union 

officials with holdings in, or income 

from, a business would be able to 

determine the percentage of the 

business’s income that comes from 

dealings with the employer. 70 FR 

51186. 

The Department did not receive many 

comments on this proposal. Most of the 

comments, as discussed below, either 

opposed the quantification of 

‘‘substantial’’ or suggested that it be set 

at an amount higher than 5%. After 

review of the comments, the Department 

has determined that 10% or more of a 

business’s annual receipts will be 

considered ‘‘a substantial part’’ of its 

business. 

Two commenters recommended that 

the Department not define ‘‘substantial 

part’’ in quantitative terms. A labor 

educator stated that his study 

participants characterized the 5% 

threshold as too low; he also stated that 

the participants were concerned about 

the potential difficulty of obtaining 

information about the percentage of 

business a vendor conducts with a 

particular employer. Another 

commenter expressed the same concern, 

noting that information about a vendor’s 

receipts is generally not publicly 

available and employers would be 

reluctant to provide such confidential 

information. The same commenter 

expressed the view that a 5% threshold 

likely would be too low for a union 

officer to be aware of a vendor-employer 

relationship that required reporting. 

Two commenters suggested that that the 

Department should define ‘‘substantial 

part’’ as a ‘‘sufficient magnitude of 

business that its loss would materially 

affect the financial well-being of the 

business enterprise in question.’’ While 

this statement may be helpful as a 

capsule view of the purpose underlying 

this particular reporting obligation, the 

statement does not provide filers a ready 

gauge to determine when a report must 

be filed. Further, such an approach 

would make relevant facts that would be 

difficult for union officials to ascertain. 

For a precarious business with 

overwhelming debt to service, the loss 

of 2% of revenue could be devastating. 

A different business, in an environment 

in which demand outstrips its 

production capacity, the loss of clients 

constituting a much higher percentage 

of its business may not be as much of 

a concern. It is difficult to imagine how 

a union official could learn the facts 

necessary to determine whether the loss 

of a client would materially affect the 

business enterprise. Thus, in the 

Department’s view, the questions posed 

by its proposal are (1) What volume of 

business, expressed as a percentage of 

the vendor’s annual receipts, is 

necessary to achieve the proper balance 

between insubstantial dealings and 

those that pose a risk of a conflict of 

interest, and thus, trigger the reporting 

obligation; and (2) whether a filer will 

be able, without undue burden, to 

obtain information needed to make the 

threshold determination. 

In the NPRM, the Department 

explained that ‘‘substantial part,’’ as 

used in section 202(a)(3) and the 

instructions, refers to the magnitude of 

the business transacted between any 

business in which a union official holds 

an interest or receives payment from 

(referred to herein as ‘‘the vendor’’) and 

the employer whose employees the 

filer’s labor organization represents or is 

actively seeking to represent, as a 

percentage of all business transacted by 

the business. 70 FR 51186. The purpose 

of the ‘‘substantial part’’ language is to 

relieve union officials from having to 

report income or transactions that do 

not have potential conflict-of-interest 

implications. In the NPRM, the 

Department expressed its view that an 

official who has an interest in, or 

receives income from, a vendor that 

receives 5% or more of its income from 

the employer of the union members may 

well face a conflict. The Department 

explained that a business with 5% of its 

receipts from a single client would have 

the opportunity and inclination to make 

demands or offer inducements to retain 

that business. In negotiations with the 

union, the employer could use its 

relationship with the business as a 

bargaining tool, either threatening to 

end the relationship or promising to 

provide additional business 

opportunities. 

The Department is not persuaded that 

there is any benefit in leaving the term 

‘‘substantial part’’ undefined. The 

Department acknowledges that, in other 

contexts, statutes and regulations leave 

‘‘substantial’’ undefined or use 

qualitative factors to give content to the 

term, e.g., 18 U.S.C. 1093 (defining 

substantial as ‘‘such numerical 

significance,’’ the loss of which would 

destroy the ‘‘group as a viable entity’’). 

For reporting purposes, however, the 

utility of a less subjective approach is 

obvious. A definition that pegs 

‘‘substantial’’ to the volume of business 

conducted by a vendor with a particular 

entity as a percentage of all business 

provides a ready, easy to understand 

gauge to determine a union official’s 

reporting obligation. 

One commenter asserted that the 5% 

threshold represents a significant 

departure from the Department’s earlier 

interpretation of ‘‘substantial part.’’ In 

support of this assertion, the commenter 

cited to a provision in the LMRDA 

Interpretative Manual (‘‘LMRDA 

Manual’’), which provides as follows: 


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245.200 Substantiality of Dealing 

Union Officers A and B of a local union are 

co-owners of a building corporation. The 

corporation, through intermediaries who are 

regular meat wholesalers, sold meat to 

employers who bargain with the local union. 

In 1962, some 80% of the corporation’s 

business of approximately $100,000 was with 

such employers. Both A and B owe reports 

for the year 1962 * * *, since both the 

interest and the income are ‘‘derived from 

any business a substantial part of which 

consists of buying from, selling or leasing to, 

or otherwise dealing with, the business of an 

employer whose employees such labor 

organization represents or is actively seeking 

to represent.’’

LMRDA Manual § 245.200. (Emphasis 

in original). The commenter reads this 

provision to establish 80% as the 

threshold for reporting about a union 

official’s interest in or payments from a 

vendor. He suggested that the 

Department should adopt the same 

quantitative threshold in the final rule. 

Noting his concerns about the difficulty 

a potential filer would face in obtaining 

information about the measure of a 

vendor’s dealings with a target 

employer, he further proposed that no 

report need be filed unless the filer 

possesses actual knowledge that the 

vendor performs 80% or more its 

business for the target employer. 

The Department rejects the suggestion 

that the above-quoted section of the 

LMRDA Manual can be fairly read to 

establish a reporting threshold. The 

Manual indicates only that an officer 

who receives a payment from a business 

that receives 80% of its receipts from 

the employer of the union members 

must file a report. It does not state that 

receipts of less than 80% from the 

employer would be unreportable. The 

80% figure in the example reflects a 

rather obvious situation where a 

substantial business relationship exists 

thus requiring a report. The illustration 

provides no assistance in determining 

the minimum volume of business that 

would trigger the reporting obligation. 

Similarly, the Department finds no 

merit to the suggestion that a reporting 

obligation attaches only where a union 

official possesses actual knowledge that 

the vendor’s volume of business with a 

relevant employer was greater than the 

reporting threshold. The folly of this 

approach is obvious where the reporting 

threshold is set at 80%; it would allow 

a union official to avoid a conspicuous 

reporting obligation and provide an 

incentive for a union official to remain 

willfully ignorant of the business 

relationship between a vendor in which 

he or she holds an interest or from 

which he or she receives a payment and 

an employer whose employees the 

official’s union represents or is actively 

seeking to represent. 

The Department does, however, 

accept the proposition that increasing 

the threshold decreases the burden on 

filers by reducing the number of 

reportable transactions. For that reason, 

the Department is persuaded that an 

upward adjustment is appropriate. As 

noted, the purposes served by section 

202(a)(3) require a reporting threshold 

that balances the burden associated with 

reporting insubstantial matters and the 

benefit served by the disclosure of any 

potential conflicts between a union 

official’s personal finances and the 

duties owed by him or her to the union 

and its members. To the extent there is 

some uncertainty as to where best to 

strike the balance, the Department 

believes that a lower threshold best 

ensures that disclosure will serve a 

prophylactic purpose. Based on the 

comments and a reassessment of the 

potential difficulties posed to filers in 

obtaining information from a vendor, 

the Department has decided to double 

the reporting threshold to 10%. The 

Department believes that setting the 

threshold level at 10% will achieve the 

balance required by the statute. 

The Department recognizes that some 

union officials with a reportable interest 

or payment may encounter difficulty in 

obtaining information about the amount 

of business a vendor conducts with the 

employer whose employees are 

represented by the official’s union. The 

Department, however, believes that the 

burden is overstated, especially where 

the union official holds an ownership or 

operating interest in the vendor. In 

those instances, there should be little 

trouble in obtaining the needed 

information. In instances where the 

union official is an employee of the 

vendor or receives an occasional 

payment, some problems are more likely 

to arise. In such instances, the union 

official should request such information 

in writing from the vendor. If the vendor 

refuses to provide the information, the 

official should contact the Department 

for assistance in obtaining the 

information. In the meanwhile, the 

union official should make a good faith 

estimate, based on the information 

reasonably available, whether the 10% 

threshold has been met. If such estimate 

exceeds the 10% threshold, then the 

union official should file the report and 

explain that the vendor failed to provide 

requested information. If the estimate 

yields a figure less than 10%, no report 

is required, but the union official should 

retain the written request for 

information he or she presented to the 

vendor and any work sheet used to 

arrive at the less than 10% figure. If an 

investigation is conducted, there is no 

risk of prosecution absent unusual 

circumstances calling into doubt the 

legitimacy of the good faith estimate. 

K. Why Payments and Other Financial 

Benefits Received From Section 3(l) 

Trusts and Service Providers to Such 

Trusts Must be Reported 

Numerous unions, law firms, and 

organizations representing financial 

service providers submitted comments 

urging the Department to modify or 

eliminate aspects of its proposed rule as 

it would affect a union official’s 

obligation to report payments and other 

financial benefits received from section 

3(l) trusts. In the NPRM, the Department 

stated that it had received compliance 

inquiries about whether payments from 

a union to a trust in which the union is 

interested constitute ‘‘dealing[s]’’

between the trust and the union under 

section 202(a)(4). 

In the NPRM, the Department also 

invited comment on whether trusts set 

up by unions to provide benefits to their 

members, such as pension or welfare 

plans, constitute ‘‘employers’’ under 

section 202(a)(6) or ‘‘business[es]’’

under section 202(a)(3) and section 

202(a)(4) so that payments from such 

organizations to union officials would 

be reportable. 70 FR 51182. Several 

commenters expressed the view that the 

Department was improperly extending 

the reporting obligation to payments 

received from service providers to 

trusts. In a similar vein, several 

commenters suggested that the 

Department was improperly requiring 

reports by labor union officials serving 

as employees or representatives of trusts 

on matters for which reporting already 

is required by ERISA. As part of their 

concerns, several commenters objected 

to the proposal on procedural grounds. 

In essence, they asserted that service 

providers and other potential Form LM–

10 filers will be bound by the 

Department’s final Form LM–30 rule, 

denying them the full opportunity for 

notice and comment. 

A summary of the principal 

comments on these various points 

concerning a union official’s obligation 

to report payments and other financial 

benefits received from section 3(l) trusts 

and the interplay between ERISA and 

the LMRDA and the Department’s 

response to these comments follows. 

The Department first briefly addresses 

the contention that the Department’s 

proposal is procedurally flawed because 

it prescribes rules that must be followed 

by employers under section 203 of the 

Act without providing that community 

the full opportunity for notice and 

comment. The Department next 


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discusses the concern that requiring 

union officials to report their interests 

in or payments by trusts as employers 

or vendors providing services to those 

trusts represents a departure from the 

Department’s asserted longstanding 

policy excepting reports about payments 

by trusts and their vendors and the 

contention that the Department’s 

position is contrary to ERISA or, at the 

least, impedes that Act’s proper 

administration. The Department, in the 

final paragraphs of this section, 

discusses the issue whether trusts and 

other not-for-profit entities constitute 

businesses, followed by the separate, yet 

related question, whether trusts and 

other not-for-profit entities constitute 

‘‘employers.’’

1. Alleged Procedural Shortcoming 

Today’s rule is specific to Form LM–

30 filers. It does not amend or modify 

in any way the Department’s current 

rules specific to the Form LM–10. Any 

interpretation or guidance issued on the 

Form LM–10 remains in effect unless 

later changed by the Department. Any 

interpretation, guidance or amendment 

to Form LM–10 will conform to legal 

requirements appropriate to the nature 

of any such changes, including notice 

and comment rulemaking where 

required. Thus, the Department finds 

that any concerns that the Department’s 

proposal is procedurally flawed are 

misplaced. 

2. Routine Exceptions 

Many commenters urged the 

Department to not ‘‘extend’’ the 

reporting requirements to include 

payments to union officials by trusts or 

their service providers. Several asserted 

that the Department had never required 

union officials (or employers under 

Form LM–10) to report such payments. 

Numerous commenters objected 

generally to any reporting of gifts 

associated with the routine conduct of 

business, especially in connection with 

marketing by service providers to gain 

and maintain business with unionrelated trusts. Some objected generally, 

on the ground that Congress never 

intended that routine business expenses 

would be the subject of reporting. Some 

commenters offered a variation of this 

argument, asserting that Congress 

intended a general reporting exception 

for payments made in the regular course 

of business. A common theme in the 

comments is the claim that the affected 

community has understood that the 

LMRDA focuses solely on financial 

transactions involving unions and 

employers whose employees are 

represented by a union or a union has 

targeted for representation. In their 

view, the statute does not impose 

reporting obligations on financial 

institutions or service provider activities 

that have no connection to the union’s 

labor-management relationship. A 

variant of the theme, unique to financial 

institutions, is that no reporting 

obligation exists for union officials who 

receive payments from financial 

institutions. Their position is based on 

the language of section 203, which 

excepts financial institutions from 

reporting ‘‘payments or loans’’ made to 

union officials. This issue is discussed 

below. 

The suggestion that the Department is 

imposing a new reporting obligation on 

union officials for payments received by 

them from service providers to trusts is 

incorrect. A union official’s obligation 

to report such payments has been 

plainly stated for over forty years in 

instructions to the Form LM–30. Indeed, 

the old Form LM–30 includes the 

explicit statement that ‘‘every [union 

official] must file a detailed report 

describing certain financial transactions 

engaged in, and interests held by, the 

[official] or his/her spouse or minor 

child [including] * * * legal and 

equitable interests in, transactions with, 

and economic benefits from certain 

businesses * * * which deal[ ] with the 

union or a trust in which the [union] is 

interested.’’ Instructions, Part III. The 

first Form LM–30 promulgated by the 

Department required filers to disclose 

‘‘An interest in or derived income or 

economic benefit with monetary value 

from a business * * * any part of which 

consists of buying from or selling or 

leasing directly or indirectly to, or 

otherwise dealing with your labor 

organization or with a trust in which 

your labor organization is interested.’’

See BNA, Daily Labor Report, No. 192: 

A–6, E–1 (Oct. 2, 1963). (Emphasis 

added). Similarly, the LMRDA Manual 

specifically identifies payments from 

insurance companies to union officials 

as matters reportable on Form LM–30. 

As there stated: ‘‘A union officer, who 

is an employee of an insurance 

company from which the union welfare 

fund procures insurance, is required to 

report that money which he receives as 

an employee of the insurance company, 

inasmuch as he derives income from a 

business which sells to or otherwise 

deals with a labor organization of which 

he is an officer.’’ LMRDA Manual 

§ 246.600. 

The commenters cite no authority for 

their broad claim that the Department’s 

position is a departure from a 

longstanding policy, nor do they 

provide a well-reasoned argument for 

how the statute would permit the 

Department the discretion to except 

from reporting payments from 

employers and businesses that have 

such extensive and ongoing activities 

with unions and section 3(l) trusts. 

Given the continuity in the 

Department’s interpretation, a more 

accurate characterization might be the 

longstanding inattention to reporting 

such payments received from trusts and 

their service providers. Many unions 

and their section 3(l) trusts manage 

benefit plans for their members, 

maintaining close business relationships 

with financial service providers such as 

insurance companies and investment 

firms. As discussed in greater detail 

herein, contemporary business and 

financial practices increase the prospect 

that union officials may receive 

payments from or hold financial 

interests in these businesses. Given 

these practices, the Department believes 

that disclosure is critical to promoting 

good union governance and fostering 

ethical behavior. Thus, the Department 

disagrees, on both legal and policy 

grounds, with the notion that payments 

from service providers or financial 

institutions should be excepted from 

reporting. Such payments carry with 

them a particular potential for conflict 

and as such warrant particular scrutiny 

by union members and the public. 

The asserted historical grounds for 

excepting payments by service 

providers and financial institutions 

from reporting are unpersuasive. The 

legislative history establishes that 

Congress intended that union officials 

report any gifts or payments from 

employers seeking to profit from their 

relationship with a union or its officials. 

Congress understood that the bill that 

became the LMRDA ‘‘is drawn broadly 

enough * * * to require disclosure of 

any personal gain which an officer or 

employee may be securing at the 

expense of the union members.’’ Senate. 

Report, at 15, reprinted in 1 Leg. 

History, at 411. As stated by Professor 

Cox, ‘‘the basic theory [underlying the 

Act’s conflict of interest provisions] is 

[that all] payments made by employers 

to labor organizations or union officials 

are prima facie questionable. Some may 

be justified. The bill does not forbid the 

payments. [The bill] simply requires 

that they be covered by public reports 

so that the employees affected and the 

public may know what has occurred.’’

1959 Senate Hearings, at 127. The 

legislative history illustrates how 

Congress believed the LMRDA would 

operate. The principal focus of the 

McClellan Committee was on the 

activities of the Teamsters Union and 

the conduct of three of its highest 

ranking officials: Dave Beck, Frank 


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Brewster, and Jimmy Hoffa. Each official 

engaged in unlawful activities that 

could not have been accomplished 

without the complicity of banks and 

insurance companies. Banks and 

insurance companies were used by 

these officials, often to the mutual 

benefit of the officials and the 

commercial entities, to carry out such 

activities and to otherwise provide 

unlawful gain to the officials. As 

explained by Senator Kennedy: ‘‘Mr. 

Hoffa would be required to disclose all 

of his business dealings with insurance 

agents handling the union’s welfare 

funds, his private arrangements with 

employers, his hidden partnerships in 

business ventures foisted upon his 

members, and all other possible 

conflicts of interest.’’ 105 Cong. Rec. 

S817 (daily ed. Jan. 20, 1959), reprinted 

in 2 Leg. History, at 969. 

The AFL–CIO Ethical Practices Codes, 

which served as the foundation for the 

LMRDA conflict of interest reporting 

provisions, contained a specific code for 

union ‘‘health and welfare funds.’’ See 

105 Cong. Rec.*16379 (daily ed. Sept. 3, 

1959) reprinted in 2 Leg. History, at 

1406–07. It expressly stated: ‘‘No union 

official who already receives full-time 

pay from his union shall receive fees or 

salaries of any kind from a fund 

established for the provision of a health, 

welfare, and retirement program. Where 

a salaried union official serves as 

employee representative or trustee 

* * * such service * * *should not [be 

considered] an extra function requiring 

further compensation from the welfare 

fund.’’ 2 Leg. History, at 1406. Of 

particular import, it states: ‘‘No union 

official, employee, or other person 

acting as agent or representative of a 

union, who exercises responsibilities or 

influence in the administration of 

welfare programs or in the placement of 

insurance contracts, should have any 

compromising personal ties, direct or 

indirect, with outside agencies such as 

insurance carriers, brokers, or 

consultants doing business with the 

welfare plan. Such ties cannot be 

reconciled with the duty of a union 

official to be guided solely by the best 

interests of the membership in any 

transaction with such agencies. Any 

agency official found to have such ties 

to his own [substantial] personal 

advantage or to have accepted fees, 

inducements, benefits, or favors of any 

kind from any such outside agency, 

should be removed [from office].’’ Id. 

Where Congress, in effect, established a 

disclosure regime in section 202 for 

matters addressed by the AFL–CIO 

Ethical Practices Codes, it would make 

no sense to exclude reports on activities 

specifically identified as improper in 

those codes. Against this backdrop, the 

argument that the legislative history 

supports the contention that the 

Department’s view of reporting is both 

novel and unintended by Congress fails. 

While most commenters appeared to 

recognize the obvious potential of 

circumvention and evasion of the Act’s 

reporting requirements if union officials 

did not report any payments they 

received from trusts, some argued that 

the relationship between the official’s 

union and the trust did not allow for 

that possibility. The commenters appear 

to argue that because the relationship 

between a section 3(l) trust and a 

participating union should be 

symbiotic, there is no conflict of interest 

presented by such payments and thus 

no circumvention or evasion is possible. 

This argument overlooks that the focus 

of section 202 is conflict between a 

union official’s personal financial 

interests and the duties he or she owes 

to the union and its members, one that 

exists without regard to the often 

congruent interests of a trust and its 

participating unions. Moreover, this 

argument overlooks that the money a 

participating union pays into a trust, 

either directly from the union or 

indirectly by an employer on the 

union’s behalf, is money that otherwise 

would be maintained in the union’s 

own account and, as such, any proceeds 

paid to a union official would be 

disclosed in reports filed by the union. 

Without requiring a union official to 

report payments he or she receives from 

a trust, an official would be able to 

circumvent and evade the disclosure 

that would have occurred if the funds 

had remained in the union’s coffers. By 

requiring a union official to report 

payments from the trust, the Department 

is simply ‘‘following the money,’’

ensuring that disclosure of such 

payments cannot be avoided. Further, 

since the union official’s obligation to 

submit a Form LM–30 overlaps with the 

congruent responsibility of a union to 

disclose payments received by the 

official from a section 3(l) trust if certain 

conditions are met, the prospect that 

one party may report the payment 

increases the risk that a failure by the 

other party to report the payment will 

be detected. Thus, the reporting 

obligation helps check the evasion of 

reporting under the Act and, in some 

instances, may deter the primary 

conduct that would trigger the reporting 

obligation. 

As noted above, some financial 

institutions have argued that section 

203(a)(1) excepts ‘‘payments or loans 

made by any national or State bank, 

credit union, insurance company, 

savings and loan association or other 

credit institution * * *.’’ These 

commenters assert that all payments 

received by union officials from banks, 

including lunches and dinners to meet 

with clients, and marketing and 

promotional expenses incurred to keep 

or to secure business, among other 

expenses, are excepted from reporting. 

The Department disagrees. Section 

203(a)(1) cannot be read as a limitation 

on a union official’s obligation to report 

interests in or payments from any 

particular segment of employers. In both 

sections 202 and 203, Congress set forth 

specific, distinct rules including distinct 

exceptions to those rules, particular, on 

the one hand, to union officials and, on 

the other hand, to employers. Neither 

the statute nor its legislative history 

evinces an intention to create a 

completely uniform system of reports 

for all filers, union officials and 

employers alike, and neither infers that 

an exception unique to a particular 

provision was intended as a general 

exception to other reporting 

requirements. As discussed herein the 

Department acknowledges that its 

interpretation requires union officials to 

report a loan or payment made by a 

financial institution, but that the 

financial institution is not required to 

file a report. Although generally the Act 

establishes a reciprocal reporting 

obligation on union officials and 

employers—both the payer and the 

payee report on a covered payment—in 

this instance, the language of the two 

sections calls for a different result. 

Although today’s rule does not interpret 

section 203(a), the Department notes 

that Congress may have held the belief 

that banks would be constrained to 

report these payments under laws 

regulating financial institutions and 

wished to avoid redundant reporting. 

The Department takes no position in 

today’s rule on the separate question as 

to whether the breadth of the exception 

provided financial institutions from 

reporting obligations under section 203 

is as expansive as suggested by some 

commenters. 

The LMRDA Manual specifically 

identifies payments from financial 

institutions to union officials as matters 

reportable on Form LM–30: ‘‘If a credit 

union grants loans to a labor union, a 

report would be required from an officer 

of that labor union who is also an 

employee of the credit union.’’ LMRDA 

Manual § 246.800. Further, a 1961 

‘‘Guide for Employer Reporting’’ issued 

by the Department provides the 

following examples of reportable 

payments (italics in original): 


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A. Loans made to union representatives not 

employed by you, unless made in the regular 

course of business as a bank or other credit 

institution. 

B. Loans to employees, who are also union 

representatives, on terms more favorable than 

those available to other employees, unless 

made in the regular course of business as a 

bank or other credit institution. 

C. Loans to labor organizations, unless 

made in the regular course of business as a 

bank or other credit institution. 

Although today’s rule does not affect 

any current reporting obligation of any 

Form LM–10 filers, the language quoted 

belies any suggestion that the 

Department is imposing a novel 

reporting obligation on Form LM–30 

filers by requiring them to report the 

receipt of such payments. 

The LMRDA is a reporting statute 

directed at unions, union officials, and 

employers and businesses whose 

interests intersect with each other’s 

interests; as such, it is obviously not 

intended to broadly regulate the affairs 

of financial institutions. The fact that 

financial institutions are regulated by 

government agencies other than this 

Department and that these institutions 

may be required to disclose information 

under those laws does not mean that the 

disclosure purposes of the LMRDA 

conflict with those laws or that those 

laws supersede the LMRDA’s reporting 

provisions. The purpose of LMRDA 

reporting is to give union members 

information about financial transactions 

between union officials and employers. 

Reporting under securities and other 

laws serves other purposes; while some 

of these purposes may complement the 

LMRDA’s disclosure provisions, none 

supplant the purpose of the LMRDA to 

provide relevant, readily available 

information to union members, the 

public, and the Department about 

potential conflicts between the financial 

circumstances of a union official, his or 

her spouse, or minor child and the 

official’s duty to the union and its 

members. 

As noted, many commenters took the 

tack that even if the Department 

possessed the authority to require union 

officials to report payments received 

from trusts and vendors, it would be bad 

policy to do so. One commenter opined 

that the Form LM–30 reporting 

requirements will deter union trustees 

from attending educational or other 

conferences that may be required for the 

union trustee to properly discharge his 

or her duties under ERISA’s standard of 

care and to be informed about the 

services available to the trusts from the 

financial services community. One 

commenter points out that ‘‘anything 

that makes it more difficult or risky to 

obtain the knowledge and experience 

needed to be a fiduciary * * * is 

contrary to the interests of union 

members.’’ Several commenters 

expressed concern that publishing 

information for only union officers gives 

union members the impression they can 

influence an employee benefits plan’s 

operation as part of the governance of 

union affairs, which is contrary to 

ERISA’s requirement that a fiduciary act 

independent of union affairs. Other 

commenters stated that it was unfair to 

single out union officials for disclosing 

payments from a trust since 

management officials associated with 

the trust receiving the same payments 

have no reporting obligation. 

In the Department’s experience, union 

members are savvy enough to ascertain 

whether a union official’s payments 

from or interests in a business pose 

conflicts of interest and to realize that 

trustees may need to obtain education 

and training to properly fulfill their 

roles as trustees. Thus, the Department 

believes that the concerns over reporting 

such matters are overstated and that 

reporting will not impede trustees in 

attending educational and training 

seminars. The Department believes that 

union members already understand or 

will understand with minimal 

explanation that an official’s role as a 

trustee is distinct from his position with 

the union and requires that the official 

act in the best interests of the trust and 

its beneficiaries; as such, the official 

cannot put his personal political 

concerns or his union office or 

employment ahead of his fiduciary 

obligation to the trust. At the same time, 

the disclosure of such payments to the 

union official allows the union’s 

members to determine whether the 

payments may tempt the official to put 

his or her own financial interests above 

the official’s duties to the union, duties 

distinct from those owed by the official 

to the trust. The Department disagrees 

that it is unfairly singling out unionappointed trustees for reporting 

payments while allowing their 

management counterparts to refrain 

from doing so. Section 202 extends to 

reports by union officials, but not to all 

individuals who have a role in section 

3(l) trusts. Thus, the Department is not 

able to consider such an extension to 

management trustees, whether or not it 

might have merit. The Department also 

believes that union members will 

understand this principle and not view 

the act of reporting by union officials as 

evidence of culpable conduct or the 

absence of reports by management 

trustees as proof of conduct beyond 

reproach. At the same time, however, by 

requiring union officials to report such 

payments, union members may 

determine for themselves whether some 

payments are excessive or unnecessary 

or arise in circumstances where the 

payments invite scrutiny to determine 

whether the official’s personal benefits 

from the arrangement have impeded or 

may impede the official’s duty to the 

union. 

One commenter argued that firms are 

concerned that if Form LM–30 filers 

must report payments and gifts from 

vendors to a section 3(l) trust, these 

filers will demand that the firms assume 

the burden to keep records of such 

payments. The Department 

acknowledges that this may create a 

customer relations challenge to some 

vendors, but, just as the decision to 

make a payment, or accept a payment, 

is voluntary, so too is any decision by 

a vendor to keep ‘‘gift records’’ for a 

union official. The vendor may freely 

choose to demur from assuming such a 

burden, just as it may choose to change 

its practice of making gifts to union 

officials. The Form LM–30 reporting 

and recordkeeping obligations remain 

squarely on the union official who holds 

an interest or receives a payment for 

which reporting is required. 

One commenter suggests that the 

Department should change its proposal 

to include a general exception for 

reporting payments associated with an 

unsuccessful effort to obtain new or 

further business. Two commenters 

would exclude reporting where any 

payments were made to both union and 

management appointed trustees. One 

commenter, acknowledging that 

marketing benefits were provided by all 

service providers seeking new business, 

argues that the Department should 

provide guidance as to where to draw 

the line between routine matters and 

payments intended as bribes. 

The commenter who would except 

from reporting any unsuccessful efforts 

to garner business by courting a union 

official acknowledged that union 

members have a legitimate interest in 

knowing whether the businesses that are 

buying from or selling to their union are 

also engaged in private transactions 

with union officers or employees. But in 

his view, where no transaction actually 

takes place between the business and 

the union, a union member would have 

no interest in the payment. In the 

commenter’s view, up until an actual 

transaction occurs, the business should 

not be considered to be ‘‘dealing with’’

the labor organization. The logic behind 

this position is not apparent. Other 

comments disagree. A commenter 

explained that such payments to a 

union official should be reportable to 


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the extent that the business was 

‘‘dealing with’’ the union or employer 

by attempting to convince the union or 

employer to enter into commercial 

relations with a competitor. This view 

also has support in the legislative 

history. In an analysis of section 202(a), 

Senator Goldwater states, ‘‘Briefly, what 

must be reported are holdings of interest 

in or the receipt of economic benefits 

from employers who deal or might deal 

with such union official’s union.’’ 62 

Cong. Rec. 19,759 (1959), reprinted in 1 

DOL, Legislative History of the LaborManagement Reporting and Disclosure 

Act of 1959 (emphasis added). 

Furthermore, to the extent the 

commenter may be suggesting that many 

payments would be picked up if a 

business relationship is later 

consummated, the commenter fails to 

recognize that unless payments from 

potential vendors are reported in the 

fiscal year in which they occur, a union 

officer could avoid disclosure by simply 

accepting payments in one fiscal year 

and awarding the union business to the 

vendor in a later year. 

One commenter pointed out that the 

proposed rulemaking has no examples 

related to trust funds reimbursing union 

officers. Such examples have been 

added to the instructions. 

3. Relationship With Other Statutes 

Although the Department notes that it 

did not receive a comment stating that 

any of its Form LM–30 proposals 

conflicts with an obligation under 

ERISA, many commenters oppose 

reporting on some or all of the trustrelated activities because the same 

matters are subject to ERISA and other 

Federal reporting requirements relating 

to security and business taxes. A typical 

comment was that ERISA already 

regulates transactions that would be 

reported on Form LM–30. This 

commenter also argued that the IRS 

already oversees business expenses 

under the tax laws; it similarly argues 

that the IRS also oversees payments by 

tax exempt organizations that are made 

for improper private benefit. 26 U.S.C. 

501(c). 

Two commenters submit that the 

LMRDA was never intended to regulate 

multiemployer plans. They asserted that 

the Welfare and Pension Plans 

Disclosure Act (‘‘WPPDA’’), P.L. 85–836 

(1958), which predated the LMRDA, 

was enacted for this purpose. They 

assert that the WPPDA implemented 

reporting and disclosure requirements 

for pension plans similar to the 

LMRDA’s requirements for unions. 

When WPPDA proved inadequate to 

regulate trusts, Congress passed ERISA, 

which exceeded and expanded 

WPPDA’s requirements. 

There is no merit to the implicit claim 

that ERISA was intended to supplant 

the LMRDA insofar as payments to 

union officials are concerned. Section 

514 of ERISA states: ‘‘Nothing in this 

subchapter shall be construed to alter, 

amend, modify, invalidate, impair, or 

supersede any law of the United States 

[with exceptions not here pertinent] or 

any rule or regulation issued under any 

such law.’’ 29 U.S.C. 1144(d). The 

WPPDA contained a similar provision, 

undermining any attempt to use that 

statute to constrain the Department’s 

authority under the LMRDA. See Pub. L. 

85–836, § 10(b) (1958) (this act does not 

exempt any person from any duty under 

any present or future law affecting the 

administration of employee welfare or 

pension benefit plans). In the 

Department’s view, the LMRDA and the 

ERISA serve complementary purposes, 

particularly insofar as their disclosure 

provisions overlap. There also is an 

evident similarity between the duty 

union officials owe to their union and 

the duty trust officials owe to their trust. 

Today’s rule is not intended as an 

interpretation of ERISA and it should 

not be construed as such. It does not 

alter any statutory or regulatory 

obligations that now exist under that 

statute. 

The Department has determined that 

Form LM–30 reporting and 

recordkeeping requirements do not 

interfere with or unnecessarily 

duplicate ERISA financial disclosure 

requirements. Thus, the Department is 

requiring union officials to report 

certain payments they receive from 

trusts, notwithstanding any ERISA 

reporting requirements that may apply 

to trusts. On many occasions, the 

Department has discovered during an 

audit or investigation that a union 

officer or employee was engaged in a 

reportable situation with a trust but had 

not filed the required Form LM–30 until 

the Department became involved. For 

example, the spouse of a union officer 

owned a company that provided 

cleaning and maintenance services to 

the union and its trust. In one year, the 

company received over $94,000 from 

the union and the trust. Although this 

information might or might not be 

reported on a Form 5500, depending on 

the surrounding circumstances, this 

information can be disseminated more 

readily to union members on the Form 

LM–30 than through the Form 5500 

alone. The Form LM–30, since its 

inception more than 45 years ago, has 

been the source for union members to 

learn of potential conflicts of interest 

between union officers and employees 

and vendors to their union’s trusts. 

Contrary to an implicit premise 

underlying many of the comments that 

the ERISA and the LMRDA are coextensive insofar as union-related trusts 

are concerned, ERISA applies to only a 

subset of the section 3(l) trusts. Some 

section 3(l) trusts are not covered at all 

by ERISA. ERISA covers only pension 

and ‘‘employee welfare benefit plans.’’

29 U.S.C. 1002. While there is 

considerable overlap between section 

3(l) trusts and ERISA ‘‘employee welfare 

benefit plans,’’ some funds in which 

unions participate fall outside ERISA 

coverage, including strike funds, 

recreation plans, hiring hall 

arrangements, and unfunded 

scholarship programs. 29 CFR 2510.3–1. 

Other section 3(l) trusts that are subject 

to ERISA are not required to file the 

Form 5500 or file only abbreviated 

schedules. See 29 CFR 2520.104–20 

welfare (plans with fewer than 100 

participants); 29 CFR 2520.104–26 

(unfunded dues financed welfare plans); 

29 CFR 2520.104–27 (unfunded dues 

financed pension plans). See also 

Reporting and Disclosure Guide for 

Employee Benefit Plans, U.S. 

Department of Labor (reprinted 2004), 

available at http://www.dol.gov/ebsa/ 

pdf/rdguide.pdf. 

The Department received several 

comments that raise concerns with 

asserted duplicative reporting that 

would exist if union officials had to 

report payments received from trusts or 

vendors and that the burden to keep 

track of such payments likely would fall 

upon the trusts and vendors. Most of the 

commenters expressing concerns about 

these matters asserted that party-ininterest transactions (which they argue 

encompass all potential conflict of 

interest disclosures that may arise under 

the LMRDA), are already covered by 

ERISA reporting and auditing 

requirements. Some commenters submit 

that because ERISA identified those 

transactions which Congress determined 

were conflicts of interest, ERISA should 

be the standard against which all 

transactions involving jointly 

administered plans are judged. 

Among the suggestions on this point, 

the commenters requested the 

Department to except union officials 

from reporting a payment from a trust if 

the trust files a Form 5500. The 

commenters appear to argue that no 

payments associated with a unionrelated trust covered by ERISA need be 

reported by Form LM–30 or Form LM–

10 filers if the trust files a Form 5500. 

Two commenters pointed out that, in a 

prior rulemaking, the Department 

recognized the merit of Form 5500 for 


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purposes of trust disclosure. These 

commenters apparently refer to the 

Form T–1 rule that was published in 

2003 as part of the ‘‘Form LM–2 

rulemaking.’’ See 68 FR 58374, 58524–

25(Oct. 9, 2003). This same exception is 

contained in the Form T–1 final rule 

published in the Federal Register, at 71 

FR 57716 (Sept. 29, 2006). Several 

commenters recommended as an 

alternative that the Department expand 

Schedule C on Form 5500 to list by 

company all payments, loans, or 

gratuities from service providers to 

trustees and add a schedule that lists all 

trustees who served during the year and 

their expenses, similar to the Form LM–

2. 

As noted by many commenters, the 

Department has previously recognized 

the merit of filing a timely and complete 

Form 5500 in lieu of a Form T–1. The 

Form 5500 as a ‘‘surrogate Form T–1,’’

however, only partially overlaps with 

the Form LM–30, and is therefore not a 

reliable substitute for the Form LM–30. 

The alternative suggested also presents 

problems. Expanding the Form 5500 

would require all covered entities, not 

just those engaged in reportable 

transactions with labor union officers 

and employees to shoulder an LMRDAdriven higher reporting burden. The 

LMRDA addresses disclosure for labor 

organizations and labor organization 

officers and employees; it does not 

impose general disclosure requirements 

on the larger ERISA reporting universe. 

As such the Department’s efforts here in 

clarifying the Form LM–30 better fulfill 

the full reporting mandate of the 

LMRDA without imposing additional 

burden on those entities and persons 

outside the scope of the LMRDA. 

Practical concerns also could impede 

the use of the Form 5500 to capture 

some of the information subject to 

today’s rule. Form 5500s are not 

required to be filed until seven months 

after the close of a plan’s fiscal year, and 

extensions are freely available, and 

there is a substantial lag time between 

the submission of a Form 5500 and its 

availability for public review. Thus, 

there now exists no way for a union 

member to timely access such 

information, unless it is obtained via 

Form LM–30. By collecting such 

information pertinent to a section 3(l) 

trust, including payments by the trust to 

union officials, and making it available 

at a single site, however, union 

members are afforded the means to 

properly oversee their union’s 

operations and monitor any potential 

conflicts between an official’s personal 

monetary interests and the official’s 

duty to the union. Moreover, even if 

these problems could be overcome, 

there would be no disclosure relating to 

those section 3(l) trusts that are not 

subject to ERISA. 

As noted, a few commenters 

suggested that the purposes served by 

the reporting requirements for payments 

made in the routine course of business 

are already met by the IRS rules on 

business expenses. The Department 

disagrees. The IRS rules on ‘‘business 

expenses’’ are not designed to disclose 

potential conflicts of interest; section 

202 is precisely designed for this 

purpose. See IRS Publication 535. Many 

of the expenditures that qualify as 

‘‘business expenses’’ for IRS purposes 

would potentially create a conflict of 

interest for union officers and 

employees. For instance, entertainment 

expenses incurred in seeking new 

business may be deductible in part 

under IRS rules. Further, the IRS 

considers certain below market loans 

and transfers of property as ‘‘business 

expenses.’’ Such a loan or property 

transfer made to a union officer or 

employee is exactly the type of payment 

the LMRDA was designed to disclose. 

Moreover, the commenters offer no 

explanation how this approach would 

benefit union members who typically 

would never have access to such tax 

filings or the underlying expense 

documentation. Without such access, 

the prophylactic purposes served by 

disclosure cannot be achieved. As such, 

the Department rejects this approach. 

4. Trusts as Employers and Businesses 

As noted above, the NPRM sought 

comment on whether a section 3(l) trust 

may constitute an ‘‘employer’’ under 

section 202(a)(6) or a ‘‘business’’ under 

sections 202(a)(3) and 202(a)(4) so that 

payments from such organizations to 

union officials would be reportable. 70 

FR 51182. After considering the 

comments received on this point, the 

Department has concluded that a 

section 3(l) trust or other not-for-profit 

organization with employees must be 

treated as an ‘‘employer’’ under the Act, 

but that they should not be treated as a 

‘‘business’’ under the Act. 

As noted above, commenters were 

divided on the question whether a trust 

or other not-for-profit entity, including 

a labor organization, should be treated 

as an ‘‘employer’’ for reporting 

purposes. One commenter argued that 

trusts should not be regarded as 

‘‘employers’’ because Congress only 

intended reporting to ‘‘reach the union 

officials who may receive payment from 

an employer not to organize the 

employees,’’ citing Senate Report, at 16. 

According to the commenter, trust funds 

in which the union is interested do not 

fall into this category. Another 

commenter argued: ‘‘although some 

large trust funds happen to have 

employees—many do not—the statute 

was intended to cover employers whose 

potential relationship with a union 

raises the risk of a conflict of interest in 

some sense relevant to the union’s 

function as a collective bargaining 

representative.’’ One commenter argued 

that ‘‘while [section 203] is precise in its 

applicability only to an employer whose 

employees are either represented by or 

a target of a union, Congress chose to 

use the additional terms ‘businesses’

and ‘trust’ rather than ‘‘employer’’ in 

[section 202] dealing with the reporting 

obligation of a union official. Nothing in 

the statute reflects a Congressional 

intent to subsume these broader terms 

within the subset of employers subject 

to [section 203].’’

Other commenters stated that a trust 

should not be considered an employer 

because any union officials involved 

with such funds do not negotiate with 

such funds or their representatives, but 

rather serve as trustees or shared 

employees in providing benefits or 

enforcing collective bargaining 

agreements. Another commenter agreed, 

noting that any improper payment from 

a trust to a union officer who is acting 

as a trustee would be considered a 

fiduciary breach of the trustee and not 

a breach of the officer’s responsibilities 

to the union. 

Several commenters argued that 

treating a trust as an employer adds 

further administrative burdens on trust 

funds, which are already subject to 

numerous reporting and regulatory 

requirements. One commenter pointed 

out that some Taft-Hartley trusts are 

self-administered, in which case the 

trust itself may be an employer, while 

other trusts employ third-party 

administrators to administer the trust, 

denying employer status to the trust. He 

implicitly suggests that given what he 

characterizes as an artificial distinction 

between third-party and selfadministered trusts Congress could not 

have intended that payments by any 

trust would be covered. This 

commenter, like several others, further 

contended that trusts are not 

‘‘businesses’’ for purposes of the Act. 

The LMRDA expressly defines 

‘‘employer’’ in broad terms. Included in 

that definition, at section 3(e) of the Act, 

are employers that are ‘‘with respect to 

employees engaged in an industry 

affecting commerce, an employer within 

the meaning of any law of the United 

States relating to the employment of any 

employees or which may deal with any 

labor organization concerning 

grievances, labor disputes, wages, rates 

of pay, hours of employment, or 


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conditions of work * * *.’’ 29 U.S.C. 

402(e) (emphasis added). The statute 

contains no indication that Congress 

intended a narrower application of that 

term in any of the Act’s provisions. 

Indeed, the breadth of the term is 

illustrated not only by the italicized 

language of section 3(e) but by the 

careful parsing of the remaining 

language in the provision to except 

governmental entities from the Act’s 

application. See 29 U.S.C. 402(e) (the 

Act’s sole exceptions for entities is for 

the ‘‘United States or any corporation 

wholly owned by the Government of the 

United States or any State or political 

subdivision thereof.’’) For these reasons, 

the Department is persuaded to give 

‘‘employer’’ its full and natural 

construction, thus bringing within its 

reach any entity, including any section 

3(l) trust and service providers to such 

trusts, that is an ‘‘employer.’’

Commenters were divided on the 

question whether trusts and other notfor-profit entities constitute businesses 

within the meaning of the LMRDA. One 

commenter noted that leaving trusts 

outside the reporting requirements 

would minimize transparency and 

undermine the intent of the reforms. 

This commenter alleged that union 

officials have long utilized ‘‘off the 

books’’ accounting procedures for these 

programs. Most commenters, however, 

asserted that trusts do not constitute 

‘‘businesses.’’ One commenter argued 

that interpreting a trust in which a labor 

organization is interested as a 

‘‘business’’ is incongruous with the 

Department’s establishment of a 

reporting obligation by union officials 

who hold interests in or receive 

payments from ‘‘businesses that deal 

with a trust in which the labor 

organization is interested.’’ In this 

commenter’s view, it would make no 

sense to consider the trust as a 

‘‘business’’ at the same time as 

payments by either the labor 

organization or the trust to a union 

official must be reported by the official. 

In effect, the commenter argues that the 

union and the trust operate as one for 

reporting purposes and thus dealings by 

the trust with the union cannot be 

viewed as business dealings for 

reporting purposes. 

Other commenters argued that since 

trusts do not operate with a profit 

motive, they cannot be considered 

‘‘businesses.’’ Several commenters 

echoed the sentiment that an entity can 

be a ‘‘business’’ only if it is a 

commercial enterprise carried on for 

profit; they infer support for this 

argument from their understanding of 

the term as guided by the language in 

sections 202(a)(3) and 202(a)(4), which 

equates ‘‘business’’ with the terms 

‘‘buying,’’ ‘‘selling,’’ ‘‘leasing,’’ and so 

forth. They argued that the phrase 

‘‘otherwise dealing with’’ takes its 

meaning from these terms, citing to the 

Act’s legislative history (Senate Report, 

at 90, reprinted in 1 Leg. History, at 

486). If Congress had intended to cover 

entities that have non-business dealings 

with a labor organization, they argue, it 

would have drafted sections 202(a)(3) 

and 202(a)(4) to include ‘‘any entity,’’

not simply ‘‘a business.’’

The LMRDA does not define 

‘‘business,’’ leaving the Department to 

apply the term’s ordinary meaning 

unless the context in which it is used 

indicates that Congress intended a 

unique or special meaning. See Brower 

v. Evans, 257 F.3d 1058, 1065 (9th Cir. 

2001). The American Heritage 

Dictionary (2000) defines ‘‘business,’’ in 

part, as ‘‘Commercial, industrial, or 

professional dealings’’ and ‘‘Volume or 

amount of commercial trade’’ and 

‘‘commercial dealings.’’ Under Black’s 

Law Dictionary (8th ed. 2004), a 

‘‘business’’ is generally defined as ‘‘a 

commercial enterprise carried on for 

profit.’’ Black’s illustrates the term’s 

usage to distinguish between 

‘‘commercial enterprises’’ and nonbusinesses, using academia as an 

example of the latter. Moreover, the IRS 

case law interpreting ‘‘trade or 

business,’’ has consistently held that a 

profit motive is a basic criterion of a 

‘‘business.’’ Nickeson v. Commissioner, 

962 F.2d 973 (10th Cir. 1992). Based on 

these interpretations, the Department 

believes it appropriate to treat trusts and 

other not-for-profit entities as distinct 

from entities treated as businesses for 

Form LM–30 purposes. 

L. When Payments and Other Financial 

Benefits Received From a Union Other 

Than an Official’s Own Union Must Be 

Reported 

In the NPRM, the Department asked 

for comment on the question whether 

‘‘labor organizations’’ constitute 

‘‘businesses’’ under sections 202(a)(3) 

and 202(a)(4), or constitute ‘‘employers’’

under section 202(a)(6). The Department 

received only a few comments on this 

question. Today’s rule clarifies that a 

‘‘labor organization’’ that has employees 

is an ‘‘employer’’ for purposes of Form 

LM–30. As just discussed, there is no 

indication that Congress intended to 

except any entities other than 

government agencies from the 

application of the Act’s provisions if 

they occupy the status of ‘‘employer’’

under any law of the United States. The 

Department reaches this conclusion for 

essentially the same reasons as 

discussed above in connection with the 

status of trusts and other not-for-profit 

entities. 

One commenter asserts that Congress 

intended that businesses would consist 

only of entities that are likely organizing 

targets of a union. Another commenter 

states that the Department ‘‘should 

continue its current practice of not 

requiring payments to a union official or 

employee from affiliated unions 

(including multi-trade councils such as 

building trades or metal trades councils) 

to be reported on the LM–30.’’

Two commenters argued that ‘‘labor 

organizations’’ are not ‘‘businesses’’

because the latter term refers only to 

‘‘commercial enterprises that engage in 

commercial transactions with unions or 

unionized employers.’’ However, they 

add: ‘‘To the extent a labor organization 

has employees who are represented by 

another union, payments from the labor 

organization to officials of the union 

representing its employees would be 

reportable under [sections] 202(a)(1) & 

(5).’’ Each of these sections provides 

that a union official should report 

payments from an employer whose 

employees the official’s union 

represents or is actively seeking to 

represent. Another asserted that ‘‘[t]he 

risk of a union official obtaining special 

favors from an affiliated labor 

organization or labor-management 

committee in return for his or her not 

discharging his [or her] obligations as a 

union leader is simply not present.’’

The Department has decided that for 

reporting purposes a union may 

constitute an ‘‘employer’’ under section 

202, if the union meets the statutory 

definition of the term. 29 U.S.C. 402(c). 

The Department’s reasoning is basically 

the same as discussed above in 

connection with the ‘‘employer’’

question posed with regard to trusts and 

other not-for-profit entities. 

Additionally, the Department rejects the 

proposition that ‘‘labor organization’’

and ‘‘employer’’ are mutually exclusive 

terms for all purposes of the Act. This 

proposition is inconsistent with the 

settled view that a ‘‘labor organization’’

that is also an ‘‘employer’’ will be held 

to the same obligation as other 

employers unless Congress otherwise 

provides. As noted, the Act provides 

that the term ‘‘employer’’ is to be given 

the same application for all its purposes. 

If a ‘‘labor organization’’ cannot be an 

‘‘employer,’’ then the various 

prohibitions relating to employer 

interference in union elections would be 

unavailable where employees of a union 

are themselves represented by an 

autonomous staff union. There is no 

evidence that Congress intended to deny 

LMRDA rights to these workers simply 

because their employer is a labor 


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organization. This Department’s 

longstanding position to treat unions as 

employers vis-a-vis staff unions is 

congruent with the similar treatment 

accorded such relationships under the 

Labor Management Relations Act. See 

National Education Ass’n, 206 N.L.R.B. 

893 (1973). 

However, in the rule today, the 

Department clarifies when a payment 

from a labor organization would be 

reportable under section 202(a)(6). No 

reports will be required where the 

payment is received from a union that 

is affiliated with the union which the 

officer or employee serves as an officer 

or employee; i.e., locals, intermediate 

bodies, and their parent national or 

international union. To use a fictitious 

example, an officer or employee of Local 

1, National Union of Reporters (‘‘NUR’’), 

would not report a payment received 

from either the New England Council, 

NUR, Local 2, NUR, or the NUR, even 

if they were employers. Similarly, no 

payment from the local to an NUR 

national officer would be reported. Any 

such payment already will be reported 

on the payer union’s Form LM–2, LM–

3, or LM–4, albeit sometimes aggregated 

with other payments. Moreover, in 

instances where the union’s payment(s) 

to a particular official exceed $5,000, 

alone or in the aggregate over a one-year 

period, the reporting union’s payments 

will specifically identify the payee 

official on the Form LM–2. However, a 

union officer or employee unaffiliated 

with the union that makes the payment 

must report the payment if the payerunion is an employer. For example, an 

officer or employee of a regional council 

of multi-trade unions that receives a 

payment from NUR or one of its locals 

would have to report the payment if the 

NUR entity is an employer. 

The Department has created a 

reporting rule for unions: A union 

official will have to report payments 

from a labor union other than his or her 

own if that union (1) Has employees 

represented by the official’s union; (2) 

has employees in the same occupation 

as those represented by the official’s 

union; (3) claims jurisdiction over work 

that is also claimed by the official’s 

union; (4) is a party to or will be 

affected by any proceeding in which the 

official has voting authority or other 

ability to influence the outcome of the 

proceeding; or (5) has made a payment 

to the filer for the purpose of 

influencing the outcome of an internal 

union election. This rule, coupled with 

the general provisions relating to section 

202(a)(6), will capture for reporting any 

payments that could reasonably be 

perceived as presenting a conflict with 

the official’s duty to their own union 

and its members. Readers are cautioned 

that the obligation to report or not report 

payments in the situations described 

above does not affect the legality of such 

payments under the election provisions 

of the LMRDA or other laws, such as the 

Labor Management Relations Act, which 

may regulate such matters. 

M. How the Proposed Definitions Have 

Been Clarified To Ease a Filer’s 

Completion of the Form LM–30 

As explained in the NPRM, the old 

regulations and instructions for the 

Form LM–30 failed to define or 

incompletely defined several terms 

whose meaning must be properly 

understood for a union official to 

correctly complete the Form LM–30. 

The Department therefore proposed 

several new or revised definitions. The 

terms defined included: Actively 

seeking to represent, arrangement, 

benefit with monetary value, bona fide 

employee, bona fide investment, 

dealing, directly or indirectly, filer/ 

reporting person/you, income, labor 

organization, labor organization 

employee, labor organization officer, 

legal or equitable interest, minor child, 

payer, publicly-traded securities, 

substantial part, and trust in which a 

labor organization is interested. All of 

the proposed definitions with the 

exception of ‘‘publicly-traded 

securities’’ have been adopted, some in 

revised form, in today’s rule. As 

discussed earlier in the preamble, the 

Department has determined that it is 

unnecessary to include a definition for 

‘‘publicly-traded securities’’ or an 

equivalent term in the rule. Comments 

were received on only some of the 

definitions. To assist filers, however, all 

the definitions, as adopted by today’s 

rule, are set out below in italics. Where 

comments have been received on a 

proposed definition, the comments are 

summarized and the Department’s 

responses are discussed below. A 

number of the terms already have been 

discussed in this preamble. 

1. Definitions Adopted by Today’s Rule 

Actively seeking to represent means 

that a labor organization has taken 

steps during the filer’s fiscal year to 

become the bargaining representative of 

the employees of an employer, including 

but not limited to: 

• Sending an organizer to an 

employer’s facility; 

• Placing an individual in a position 

as an employee of an employer that is 

the subject of an organizing drive and 

paying that individual subsidies to 

assist in the union’s organizing 

activities; 

• Circulating a petition for 

representation among employees; 

• Soliciting employees to sign 

membership cards; 

• Handing out leaflets; 

• Picketing; or 

• Demanding recognition or 

bargaining rights or obtaining or 

requesting an employer to enter into a 

neutrality agreement (whereby the 

employer agrees not to take a position 

for or against union representation of its 

employees), or otherwise committing 

labor or financial resources to seek 

representation of employees working for 

the employer. 

Where a filer’s union has taken any of 

the foregoing steps, the filer is required 

to report a payment or interest received, 

or transaction conducted, during that 

reporting period. 

Note: Leafleting or picketing, such as 

purely ‘‘informational’’ or ‘‘area standards’’

picketing, that is wholly without the object of 

organizing the employees of a targeted 

employer will not alone trigger a reporting 

obligation. For example, if a union pickets a 

sporting goods retailer solely for the purpose 

of alerting the public that the retailer is 

selling goods that are made by children 

working in oppressive conditions in violation 

of accepted international standards, the 

picketing would not meet the ‘‘actively 

seeking to represent’’ standard. 

As discussed, the definition was 

modified by the addition of the note to 

inform filers that leafleting or picketing 

wholly without the object of organizing 

the employees of a targeted employer 

will not trigger a reporting obligation 

and make plain that a report need only 

be filed where a union official receives 

a payment during the year in which the 

official’s union takes a concrete step to 

actively represent the employees of an 

employer that transacts business with 

the union or other businesses for which 

reports are required because of their 

relationship to such employer. 

Arrangement means any agreement or 

understanding, tacit or express, or any 

plan or undertaking, commercial or 

personal, by which the filer, spouse, or 

minor child will obtain a benefit, 

directly or indirectly, with an actual or 

potential monetary value. 

Note: The term ‘‘arrangement’’ is very 

broad and covers both personal and business 

transactions, including an unwritten 

understanding. For example, if during the 

reporting period an employer’s representative 

offered a union officer a job with the 

employer, the officer must report the offer 

unless he or she rejected it. A standing job 

offer must be reported because it carries the 

potential of monetary value to the filer. 

Another example of a situation requiring a 

report is when an employer provided insider 

information about a stock or other investment 

opportunity, unless the filer rejected the 

advice and took no steps to act on it. 


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No comments were received on the 

proposed definition. This definition is 

adopted as proposed. As discussed in 

the NPRM, the term encompasses both 

personal and business transactions, 

including an unwritten understanding. 

For example, if an employer’s 

representative during the reporting 

period solicits a union officer to accept 

a job with the employer, the filer must 

report the solicitation, unless the filer 

rejects the offer. A standing job offer 

must be reported because it carries the 

potential of monetary value to the filer. 

Another example of a situation 

requiring a report would be one in 

which a covered employer provides 

insider information about a stock or 

other investment opportunity, unless 

the filer rejects the advice and takes no 

steps to act on it. 

Benefit with monetary value means 

anything of value, tangible or intangible. 

It includes any interest in personal or 

real property, gift, insurance, retirement, 

pension, license, copyright, forbearance, 

bequest or other form of inheritance, 

office, options, agreement for 

employment or property, or property of 

any kind. You do not need to report 

pension, health, or other benefit 

payments from a trust to you, your 

spouse, or minor child that are provided 

pursuant to a written specific agreement 

covering such payments. 

This definition has been revised by 

adding the new third sentence in the 

instructions to clarify that benefits 

received by a union official, his or her 

spouse, or minor child as a participant 

in a trust or benefit plan will generally 

not be reportable on Form LM–30. The 

same definition, with only a slight 

change in the wording of the third 

sentence, is adopted as section 404.1(a) 

of the Department’s regulations (to be 

codified as 29 CFR 404.1(a)). 

A commenter voiced support for the 

Department’s proposed definition of this 

term and the related definitions 

proposed for ‘‘benefit with monetary 

value,’’ ‘‘income,’’ and ‘‘ directly or 

indirectly,’’ arguing that the Department 

has broadly construed these terms to 

capture anything of value received by 

the filer, his or her spouse, or minor 

child, including any payment or benefit 

held or received by a third party for 

their benefit. This commenter noted that 

the proposed definition is properly 

drawn from disclosure rules applicable 

to Federal employees. Another 

commenter criticized the proposal 

because it appears to include pension 

benefits that an officer receives from a 

jointly administered trust as a result of 

prior service for an employer 

participating in the trust. The 

commenter argues that the statute does 

not require disclosure of such payments 

and that an officer’s receipt of such 

payments does not present a conflict of 

interest. The commenter recommends 

the Department either amend the 

definition or modify the instructions to 

clarify that such payments do not have 

to be reported under any of the sections. 

The Department agrees that benefits 

received as an employee of an employer, 

such as pension benefits, are generally 

not reportable. This point is clarified by 

the new third sentence added to the 

definition. 

Bona fide employee is an individual 

who performs work for, and subject to 

the control of, the employer. 

Note: A payment received as a bona fide 

employee includes wages and employment 

benefits received for work performed for, and 

subject to the control of, the employer 

making the payment, as well as 

compensation for work previously performed, 

such as earned or accrued wages, payments 

or benefits received under a bona fide health, 

welfare, pension, vacation, training or other 

benefit plan, leave for jury duty, and all 

payments required by law. 

Compensation received under a ‘‘unionleave,’’ or ‘‘no-docking’’ policy is not received 

as a bona fide employee of the employer 

making the payment. Under a union-leave 

policy, the employer continues the pay and 

benefits of an individual who works full time 

for a union. Under a no-docking policy, the 

employer permits individuals to devote 

portions of their day or workweek to union 

business, such as processing grievances, with 

no loss of pay. Such payments are received 

as an employee of the union and thus, such 

payment must be reported by the union 

officer or employee unless they (1) totaled 

250 or fewer hours during the filer’s fiscal 

year and (2) were paid pursuant to a bona 

fide collective bargaining agreement. If a filer 

must report payments for union-leave or nodocking arrangements, the filer must enter 

the actual amount of compensation received 

for each hour of union work. If union-leave/ 

no-docking payments are received from 

multiple employers, each should be 

considered separately to determine if the 

250-hour threshold has been met. For 

purposes of Form LM–30, stewards receiving 

union-leave/no-docking payments from an 

employer or lost time payments from a labor 

organization are considered employees of the 

labor organization. 

Any individual working at the control 

and direction of a labor organization 

will be an employee of the organization. 

A union steward or union official while 

acting on behalf of the union is not 

acting as a bona fide employee of the 

employer whose employees are 

represented by the steward’s union. Of 

particular import, however, today’s rule, 

as discussed herein, modifies the 

proposed instruction to except from 

reporting on the Form LM–30 

compensation received from an 

employer for whom the official works 

for the time he or she is engaged in 

certain union activities provided it is 

made pursuant to a collective bargaining 

agreement and the compensation 

reflects payment for union activities of 

250 hours or less during the reporting 

year. 

Bona fide investment means personal 

assets of an individual held to generate 

profit not acquired by improper means 

or as a gift from (1) an employer, (2) a 

business that deals with the filer’s union 

or a trust in which the filer’s union is 

interested, (3) a business a substantial 

part of which consists of dealing with an 

employer whose employees the filer’s 

union represents or is actively seeking to 

represent, or (4) a labor relations 

consultant to an employer. 

No comments were received on this 

proposal. The primary purpose of this 

definition is to alert filers that stock or 

other securities received as a gift will 

not constitute a ‘‘bona fide investment,’’

under the provision that exempts from 

reporting bona fide investments in 

securities when the gift is received from 

specified employers, businesses, or 

labor relations consultants. The only 

changes from the NPRM are the 

numbering of the different sources of 

reportable payments and the 

elimination of the cross-reference to the 

term ‘‘publicly-traded securities.’’

Dealing means to engage in a 

transaction (bargain, sell, purchase, 

agree, contract) or to in any way traffic 

or trade, including solicitation for 

business. 

Note: The term ‘‘traffic or trade’’ includes 

not only financial transactions that have 

occurred but also the act of soliciting such 

business. Thus, for example, potential 

vendors or service providers attempting to 

win business with a union will be considered 

to be ‘‘dealing’’ with the union to the same 

extent as vendors who are already doing 

business with the union. Potential vendors 

must engage in the active and direct 

solicitation of business (other than by mass 

mail, telephone bank, or mass media). A 

business that passively advertises its services 

generally and would provide services 

consumed by, for example, a union would 

not meet this test. The potential vendor must 

be actively seeking the commercial 

relationship. Under certain circumstances, 

the payment itself will be evidence of the 

solicitation of business, such as a potential 

vendor who treats a union official to a golf 

outing and dinner to discuss the vendor’s 

products. 

The definition of this term has been 

revised slightly from the proposal by 

adding the phrase ‘‘including 

solicitation for business’’ and adding the 

explanatory note to the instructions. 

The same definition, but without the 

note, is adopted as section 404.1(b) of 


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the Department’s regulations (to be 

codified as 29 CFR 404.1(b)) 

Most of the comments on the 

proposed term have been discussed 

already in connection with the meaning 

to be given the terms ‘‘employer’’ and 

‘‘business.’’ See discussion herein. The 

new phrase and note were added to 

make clear that payments to union 

officials must be reported even if they 

do not lead to a consummated business 

transaction. The Department notes, as 

discussed herein, that some 

commentators suggested that the term 

‘‘dealing’’ should only encompass 

payments made to union officials in 

connection with marketing efforts that 

lead to a completed business 

transaction. For the reasons discussed 

herein the Department is not persuaded 

that there is anything in the language of 

section 202 or its legislative history to 

suggest that either ‘‘routine marketing 

expenses’’ or the subset of those that do 

not lead to a business agreement should 

be excepted from the reporting 

obligation. 

The Department believes that the 

definition it adopts for ‘‘dealing’’ is 

consistent with the intended meaning 

given it by Congress. Neither its use in 

the statute nor the legislative history of 

the Act’s ‘‘dealing’’ provisions suggest 

that the term should be given a unique 

meaning. As defined today, the term 

accords with the meaning given the 

term in the American Heritage 

Dictionary and Black’s Law Dictionary. 

In the American Heritage Dictionary 

‘‘deal’’ is defined, in part, as ‘‘[t]o sell’’

and ‘‘[t]o do business; trade.’’ In Black’s, 

‘‘deal’’ is defined as ‘‘an act of buying 

and selling’’ such as ‘‘the purchase and 

exchange of something for profit.’’

Directly or indirectly means by any 

course, avenue, or method. Directly 

encompasses holdings and transactions 

in which the filer, spouse, or minor 

child receives a payment or other 

benefit without the intervention or 

involvement of another party. Indirectly 

includes any payment or benefit which 

is intended for the filer, spouse, or 

minor child or on whose behalf a 

transaction or arrangement is 

undertaken, even though the interest is 

held by a third party, or was received 

through a third party, including 

instances in which the third party is 

acting on the behalf, or at the behest, of 

an employer or business and the interest 

would have to be reported if made 

directly to the filer, his or her spouse, or 

minor child . The following examples 

show the difference between ‘‘direct’’

and ‘‘indirect’’: 

You are employed by XYZ Widgets and 

also serve as the president of the local union 

representing XYZ Widgets employees. In a 

recent conversation with the XYZ Widgets 

human resources manager, you mention that 

you are placing your 15 year-old daughter in 

a private school. XYZ Widgets sends you a 

check for $1,000 with a note saying ‘‘Good 

luck with the new school!’’ You have 

received a direct benefit. 

You are employed by XYZ Widgets and 

also serve as the president of the local union 

representing XYZ Widgets employees. In a 

recent conversation with the XYZ Widgets 

human resources manager, you mention that 

you are placing your daughter in a private 

school. You receive a letter from your 

daughter’s new school stating that she has 

received a $1,000 scholarship through a 

donation by XYZ Widgets. You have received 

an indirect benefit. 

The definition of this term, as 

discussed above, has been revised from 

the proposal by including two 

examples. The examples have been 

added in response to a comment by a 

labor educator who suggested that the 

Department should include some 

examples to demonstrate the difference 

between ‘‘direct’’ and ‘‘indirect.’’ As 

noted in the NPRM, the purpose of the 

definition is to clarify that filers must 

disclose any benefits received by them 

(or their spouse or minor child) from a 

third party where the third party is 

acting on the behalf, or at the behest, of 

an employer or business where the 

benefit would have to be reported if 

made by the employer or business 

directly to the filer (or his or her spouse 

or minor child). Benefits received from 

an employee, agent, or representative of 

an employer or business, or other entity 

acting on behalf of the employer or 

business should be considered received 

from the employer or business. 

Payments to a third party to be held for 

the use or benefit of the filer are also 

reportable. The definition is deliberately 

drawn broadly, consistent with the 

legislative history, ‘‘to require 

disclosure of any personal gain which 

an officer or employee may be securing 

at the expense of union members.’’ As 

also noted in the NPRM, the legislative 

history draws from the AFL–CIO Ethical 

Practices Code: ‘‘The ethical principles 

apply not only where the investments 

are made by union officials, but also 

where third parties are used as blinds or 

covers to conceal the financial interests 

of union officials.’’

Filer/Reporting Person/You mean any 

officer or employee of a labor 

organization who is required to file 

Form LM–30. 

Note: These terms are used synonymously 

and interchangeably throughout the 

instructions, and, when referring to 

reportable interests, income, or transactions, 

these terms include interests, income, or 

transactions involving the union officer’s or 

employee’s spouse or minor child. 

No comments were received on the 

proposed definition. This definition is 

adopted as proposed. 

Income means all income from 

whatever source derived, including, but 

not limited to, compensation for 

services, fees, commissions, wages, 

salaries, interest, rents, royalties, 

copyrights, licenses, dividends, 

annuities, honorarium, income and 

interest from insurance and endowment 

contracts, capital gains, discharge of 

indebtedness, share of partnership 

income, bequests or other forms of 

inheritance, and gifts, prizes or awards. 

The Department adopts the definition 

of ‘‘income,’’ as proposed, both in the 

instructions and as section 404.1(e) of 

the Department’s regulations (to be 

codified at 29 CFR 404.1(e)). 

Labor organization, means the local, 

intermediate, or national or 

international labor organization that 

employed the filer, or in which the filer 

held office, during the reporting period, 

and, in the case of a national or 

international union officer or an 

intermediate union officer, any 

subordinate labor organization of the 

officer’s labor organization. Item 6 of 

the Form LM–30 identifies the 

relationships between employers and 

‘‘your labor organization’’ or ‘‘your 

union’’ that trigger a reporting 

requirement. Item 7 of the Form LM–30 

identifies the direct and indirect 

relationships between a business (such 

as a goods vendor or a service provider) 

and ‘‘your labor organization’’ that 

trigger a reporting requirement. The 

terms ‘‘your labor organization’’ and 

‘‘your union’’ mean: 

a. For officers and employees of a local 

labor organization. 

Your local labor organization. 

b. For officers of an international or 

national labor organization 

Your national or international labor 

organization and all of its affiliated 

intermediate bodies and all of its affiliated 

local labor organizations. 

But note: A national or international union 

officer does not have to report payments from 

or interests in businesses that deal with 

employers represented by, or actively being 

organized by, any lower level of the officer’s 

labor organization. Such officers are also not 

required to report payments and other 

financial benefits received by their spouses 

or minor children as bona fide employees of 

a business or employer involved with a lower 

level of the officer’s labor organization. 

c. For employees of a national or 

international labor organization. 

Your national or international labor 

organization. 

d. For officers of intermediate bodies. 

Your intermediate body and all of its 

affiliated local labor organizations. 

But note: An officer of an intermediate 

body does not have to report payments from 


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or interests in businesses that deal with 

employers represented by, or actively being 

organized by, any lower level of the officer’s 

labor organization. Such officers are also not 

required to report payments and other 

financial benefits received by their spouses 

or minor children as bona fide employees of 

a business or employer involved with a lower 

level of the officer’s labor organization. 

e. For employees of an intermediate body. 

Your intermediate body. 

As discussed at length herein, the 

definition of ‘‘labor organization’’ for 

purposes of completing Form LM–30 

has been modified from that proposed, 

narrowing its scope consistent with the 

Department’s existing ‘‘top down’’

approach and limiting the obligation of 

officers of local and intermediate 

unions. The first sentence of the quoted 

material is adopted as section 404.1(f) of 

the Department’s regulations (to be 

codified at 29 CFR 404.1(f)). 

Labor organization employee means 

any individual (other than an individual 

performing exclusively custodial or 

clerical services) employed by a labor 

organization within the meaning of any 

law of the United States relating to the 

employment of employees. 

Note: An individual who is paid by the 

employer to perform union work, either 

under a ‘‘union-leave’’ or ‘‘no-docking’’

policy, is an employee of the union for 

reporting purposes if the individual performs 

services for, and under the control of, the 

union. See definition of ‘‘bona fide 

employee.’’

For purposes of Form LM–30, stewards 

receiving union-leave/no-docking payments 

from an employer or lost time payments from 

a labor organization are considered 

employees of the labor organization. 

Numerous comments were received 

about the wisdom of requiring union 

officials to report payments they 

received under union-leave or nodocking policies. As discussed above, in 

today’s rule, the Department adopts a 

limited reporting obligation for such 

payments. Concerns regarding the 

reporting burden of labor organization 

employees under the ‘‘union-leave’’ and 

‘‘no-docking requirements’’ are 

addressed separately in this final rule. 

In addition to comments on that aspect 

of the proposed definition, the 

Department also received comments 

inquiring about the application of the 

definition to union stewards. 

One commenter, a labor educator, 

stated that his study’s participants 

found the definition for ‘‘labor 

organization employee’’ to be confusing. 

He explained that many participants 

viewed the proposed definition as a 

major shift from existing practice as a 

number of individuals, including 

stewards, bargaining committee 

members, and volunteer organizers, 

would now have reportable transactions 

when doing union work such as serving 

on a negotiating committee, serving as 

an arbitration witness, or organizing. 

The commenter identified as a specific 

problem the definition’s failure to 

address how a filer should report the 

receipt of payments where he or she has 

multiple employers, each with a 

different practice or language with 

respect to lost wages and to the payment 

of benefits to part-time union officers, 

stewards, negotiating committee 

members, and so forth. 

In general, where a union steward 

receives union-leave/no-docking 

payments from an employer or lost time 

payments from the union, the steward 

will be regarded as an employee of the 

labor organization as the individual has 

received compensation for performance 

of services for the union. The 

Department recognizes that some 

stewards and other representatives have 

multiple employers, each with a 

different practice or language with 

respect to lost wages and payment of 

benefits of part-time union officers, 

stewards, or negotiating committee 

members. Thus, each employer is 

considered separately for reporting 

purposes. 

Finally, unlike the proposed 

definition, today’s rule does not outline 

the factors that distinguish between the 

status of individuals working for a 

union as independent contractors and 

those working as employees of the 

union. As explained in the NPRM, 

independent contractors of the union 

are not required to file a Form LM–30. 

In the Department’s view, the inclusion 

of these factors in the definition of 

‘‘labor organization employee’’ added 

unnecessary length and possible 

confusion to the definition. If needed, 

the Department will provided guidance, 

separate from the instructions, to assist 

individuals unsure of their status as 

employees or independent contractors. 

The same definition, but without the 

note, modifies section 404.1(g) of the 

Department’s regulations (to be codified 

at 29 CFR 404.1(g)) 

Labor organization officer means any 

constitutional officer, any person 

authorized to perform the functions of 

president, vice president, secretary, 

treasurer, or other executive functions of 

a labor organization, and any member 

of its executive board or similar 

governing body. An officer is (1) a 

person identified as an officer by the 

constitution and bylaws of the labor 

organization; (2) any person authorized 

to perform the functions of president, 

vice president, secretary, or treasurer; 

(3) any person who in fact has executive 

or policy-making authority or 

responsibility; and (4) a member of a 

group identified as an executive board 

or a body which is vested with functions 

normally performed by an executive 

board. 

Note: Under this definition, an officer 

includes a trustee appointed by the national 

or international union to administer a local 

union in trusteeship. If you are a trustee 

elected or appointed by the local union to 

audit and/or hold the assets of the union, you 

may or may not be a union officer, depending 

on your union’s constitution and other 

factors. If you serve in your union in any 

capacity and you are unsure if your position 

is an officer position, you are likely an officer 

of a labor organization if any one of the 

following applies: 

• Your union’s constitution or bylaws 

refers to your position as an officer of the 

union; 

• Your union’s constitution or bylaws 

states that your position has the authority to 

make executive decisions for the union or 

that you are authorized to perform the 

functions of president, vice-president, 

secretary, treasurer, or other constitutionally 

designated officer; 

• Your union’s annual Form LM–2 or Form 

LM–3 lists your position as an officer of the 

union; 

• In your position, you serve on your 

union’s executive board or similar governing 

body. 

This definition adopted in today’s 

rule has been revised from that 

proposed by adding the above note in 

the instructions. The same definition, 

but without the note, is adopted as a 

modification of the existing definition at 

section 404.1(b) of the Department’s 

regulations (to be codified as 

redesignated at 29 CFR 404.1(h)). As 

explained in the NPRM, the definition, 

as proposed, tracks the definition of 

‘‘officer’’ at section 3(n) of the LMRDA, 

29 U.S.C. 402(n), and adds a new 

second sentence to the old regulation’s 

definition, 29 CFR 404.1(b). The LMRDA 

Manual applies the definition to 

trustees appointed to oversee a labor 

organization. See LMRDA Manual, 

241.200. 

One commenter agreed with the 

Department’s view that the group of 

union officials subject to section 202’s 

reporting requirements only partially 

overlaps with the larger group of 

individuals subject to the Act’s Title V 

fiduciary duties. See 29 U.S.C. 501(a) 

(‘‘officers, agents, shop stewards, and 

other representatives’’). The commenter 

noted that nevertheless the overlap was 

substantial. A labor educator stated that 

participants in his study group found 

the definition unclear, adding that the 

explanatory notes to the definition were 

unhelpful. He mentioned that some 

participants were unsure whether 

‘‘trustee’’ applied to the positions in 

some local unions which hold auditing 


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and other responsibilities over the 

local’s assets or to an individual 

appointed by the national or 

international union to administer a 

local’s affairs, or both. The commenter 

explained that local union trustees do 

not see themselves as union officers and 

are not de facto or de jure members of 

the executive board. The commenter 

also explained that participants were 

unsure whether stewards would be 

considered union officers. The 

Department has concluded that the 

proposed definition, along with the 

addition of the note, clarifies that the 

term ‘‘trustee,’’ as used in this 

definition, does not apply to those with 

auditing responsibility in the union. 

This definition also provides a test for 

determining whether any individual is a 

union officer. 

Legal or equitable interest means any 

property or benefit, tangible or 

intangible, that has an actual or 

potential monetary value for the filer, 

spouse, or minor child without regard to 

whether the filer, spouse, or minor child 

holds possession or title to the interest. 

See definition of income and benefit 

with monetary value. For example: 

• You are an officer of a union. You 

and your spouse jointly own an 

accounting business that provides tax 

services to a number of clients, 

including your union. You hold a legal 

interest in the company providing 

services to your union. 

• You are an officer of a union. You 

form a tax preparation business with 

two partners and put your share of the 

business in your wife’s name. The 

business prepares tax returns and LM 

reports for your union. You hold an 

equitable interest in the business that 

deals with your union. 

This definition has been modified 

from that proposed by adding the 

examples set forth in the above bullets. 

This change was suggested by the labor 

educator whose study participants had 

difficulty understanding the meaning of 

the term. 

Minor child, means a son, daughter, 

stepson, or stepdaughter less than 21 

years of age. 

This definition is adopted as 

proposed as part of the instructions and 

as section 404.1(i) of the Department’s 

regulations (to be codified at 29 CFR 

404.1(i)). As the Department noted in 

the NPRM, the old instructions, like the 

LMRDA, are silent about the age at 

which a child reaches his or her 

majority. As explained in the NPRM, 

state law definitions for the legal 

concept of childhood and age of 

majority differ from state to state but 

also may differ widely from legal 

context to legal context within the same 

state. In the Department’s view, there is 

a need for a uniform, nationwide 

meaning of ‘‘minor child’’ under the 

LMRDA and without such a uniform 

definition the objective of the LMRDA 

will be frustrated. Both filers and union 

members who view filed reports require 

a known and easily applied single 

standard regarding when reports are 

required, and what a disclosure or its 

absence represents. 

The Department only received a few 

comments about the proposed definition 

of ‘‘minor child.’’ One commenter noted 

that the Department should exclude 

from its definition a ‘‘child who has 

married and moved away from the 

parental home.’’ Another suggested that 

18 should be the cut off age unless the 

child is still claimed as a dependent for 

Federal income tax purposes. The 

Department agrees that the commenters 

offer valid alternatives to the 

Department’s proposal. Nevertheless, 

the Department believes that the 

proposed definition solely tied to a 

child’s age offers the advantage of 

simplicity and ease of application, 

particularly because a child’s status may 

remain in a state of flux during his or 

her late teens and early twenties. In 

1959 when the LMRDA was enacted, it 

was well established that at common 

law the age at which a person reached 

his or her majority in the states was 

twenty-one years. See, e.g., 5 Samuel 

Williston and Richard A. Lord, A 

Treatise on the Law of Contracts § 9:3 

n.15 (4th ed. 1993 & Supp. 1999). As 

explained in the NPRM, the Department 

believes that in 1959 when Congress 

used the term ‘‘minor child’’ in section 

202(a), it intended a uniform Federal 

standard to apply and referred to the 

general common law meaning at that 

time, i.e., twenty-one years. The 

Department also believes that twentyone is more suitable than an earlier age 

to distinguish between a child’s relative 

dependence upon, and independence 

from, the finances of a parent. For these 

reasons, the Department adopts the 

definition of ‘‘minor’’ as proposed. 

Substantial part means 10% or more. 

Where a business’s receipts from an 

employer whose employees the filer’s 

labor organization represents or is 

actively seeking to represent constitute 

10% or more of its annual receipts, a 

substantial part of the business consists 

of dealing with this employer. 

As discussed herein, this term has 

been changed by increasing the 

reporting threshold from 5% to 10% in 

order to ease the burden on a filer to 

determine the percentage of a vendor’s 

business that consists of dealing with an 

employer whose employees the official’s 

union represents or is actively seeking 

to represent. 

Trust in which a labor organization is 

interested means a trust or other fund or 

organization (1) which was created or 

established by a labor organization, or 

one or more of the trustees or one or 

more members of the governing body of 

which is selected or appointed by a 

labor organization, and (2) a primary 

purpose of which is to provide benefits 

for the members of such labor 

organization or their beneficiaries. The 

term ‘‘section 3(l) trust’’ is used in the 

instructions as a shorthand reference to 

such trusts. 

No comments were received on the 

Department’s proposed definition of this 

term. This definition is provided by 

section 3(l) of the LMRDA. 29 U.S.C. 

402(l). The only change is the inclusion 

of the second sentence to make plain 

that the term ‘‘section 3(l) trust ‘‘ is a 

shorthand reference to ‘‘trust in which 

a labor organization is interested.’’ The 

same definition is adopted as section 

404.1(j) of the Department’s regulations 

(to be codified at 29 CFR 404.1(j)). 

2. Other Issues Related to Definitions 

A commenter suggested the inclusion 

of a definition for ‘‘transaction,’’ another 

term used in the Form LM–30 

instructions. The Department believes 

that the term has a plain meaning that 

applies across various contexts and 

therefore its inclusion in the 

instructions is unnecessary. 

The Department had proposed to use 

the term ‘‘payer’’ to describe the 

employer, business, or labor relations 

consultant that is the source of a 

reported payment on the Form LM–30. 

As explained in the NPRM, the 

Department recognized that the term 

was imperfect, because in common 

parlance a business in which a filer 

holds an interest would not ordinarily 

be considered a ‘‘payer’’ of the filer. 

Upon further consideration, the 

Department has determined that the use 

of the term, defined specifically for 

Form LM–30 reporting, is unnecessary 

and potentially confusing. For these 

reasons, the Department has withdrawn 

the proposed definition. For similar 

reasons, as discussed above, the 

Department has withdrawn the 

proposed definition of ‘‘publicly-traded 

securities.’’

N. Details Relating To Proposed and 

Revised Form and Instructions 

As explained in the NPRM, the broad 

purpose of Form LM–30 is to disclose 

payments and other financial interests 

of a union official that may pose a 

conflict between those personal 

interests and his or her duty to the 


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union and its members. 70 FR 51166. In 

the NPRM, the Department identified 

the difficulty in developing a selfexplanatory form to accomplish this 

result. While the old Form LM–30 has 

a deceptively simple design, it fails to 

fully capture information that Congress 

wanted disclosed. Filers often failed to 

complete the form and, when they did 

file, they seldom provided the detail 

called for in the instructions. 

1. Comparison of the ‘‘Old’’ and 

Proposed Forms 

Items 1–4 of the old Form LM–30 

remained on the proposed form with 

only minor changes. Item 3 was 

modified to require an e-mail address of 

the filer. Item 4 of the proposed form 

combined Items 4 and 5 of the old form 

and it also required filers to report 

whether they held their position in the 

union at the end of the reporting period. 

Item 5 on the proposed form was the 

signature box, which was otherwise the 

same as the old form. 

The proposed Form LM–30 included 

a Payer Detail Page to provide an 

itemized list of all payments, by payer. 

The proposed form included three 

schedules, and it organized the 

reportable matters by tables instead of 

the narrative boxes on the old form. The 

old form also displays reportable 

information in a three section format: 

Part A, Part B, and Part C. The filer must 

report payments from employers in Part 

A, Items 6, 7a, and 7b; from businesses 

in Part B, Items 8–12; and from other 

employers and labor relations 

consultants in Part C, Items 13–14. 

The proposed form contained various 

continuation pages for information 

supplementing required entries on other 

pages or otherwise as overflow space. 

Some of these pages existed in a 

different format in the old form and 

some were new pages. 

The NPRM noted that the diversity of 

financial transactions made reportable 

by section 202 of the Act requires 

detailed instructions. The NPRM invited 

comments as to the layout of the 

instructions, their clarity, and 

suggestions about how to better explain 

the reporting obligations. The NPRM 

also noted that the first heading of the 

proposed instructions, ‘‘Why File,’’ was 

largely unchanged from the old form: it 

addressed the basic reporting 

obligations. 

2. Comments on Proposed Form 

In an attempt to better inform 

potential filers about the purposes 

served by the Form LM–30, the 

proposed form included an expanded 

discussion of the LMRDA, placing the 

official’s reporting obligation in the 

context of the other rights and 

obligations established by the Act. The 

proposed form also clarified that no 

form need be filed unless the filer, his 

or her spouse, or minor child held a 

covered interest, received a covered 

payment, or engaged in a covered 

transaction or arrangement during the 

reporting period. 

The NPRM also requested comments 

about the layout and clarity of the form, 

including: ‘‘Would the form benefit 

from adding additional text and, if so, 

what additions are recommended? Does 

the form have an intuitive feel to it? 

Does the form request information in 

logical progression? How can the form 

be improved?’’ The next paragraph 

discusses the general comments 

received on the proposed form and the 

Department’s response. The following 

paragraphs summarize comments 

received on particular aspects of the 

proposed form and the Department’s 

response to those comments. Comments 

and responses are grouped by the 

numbered items and schedules of the 

proposed form. 

General Comments: Several 

commenters applauded the inclusion of 

definitions and examples; some 

commenters, however, expressed 

concern about some of the definitions 

and argued that some of the examples 

were incorrect. As discussed, the 

Department has clarified some of the 

definitions, modified some of the 

examples, and added others where 

requested. These changes are discussed 

in other sections of this document. 

One commenter stated that the 

proposed form is more confusing to 

filers and the public than the old form, 

adding burden but no compensating 

benefit. The commenter recommended 

that the Department should ‘‘leave well 

enough alone’’ and that instead of 

revising the form it should provide 

guidance that would ‘‘clarify[ ] and 

simplify[ ] the reporting requirement 

itself.’’ The Department disagrees with 

this recommendation. As noted in the 

NPRM, flaws in the form itself and the 

instructions to the form provided 

impetus for the proposed rule. Further, 

as discussed throughout this document, 

many of the modifications to the form 

correspond to changes/clarifications in 

the reporting requirements themselves. 

Although under the revised form a filer 

no longer needs to record the statutory 

subsection under which a payment or 

other financial interest is received, the 

Department has nevertheless conformed 

the form to the reporting requirements 

of section 202 and the limited 

exceptions to such requirements. 

Finally, much of the asserted confusion 

will clear when filers familiarize 

themselves with the revised form and 

instructions and avail themselves of the 

compliance assistance readily available 

from this Department. 

A labor educator stated that several of 

his study participants found the 

language in the instructions to be too 

‘‘legalistic.’’ He suggested that the 

Department should wait to see what 

problems arose in connection with the 

historic upsurge in Form LM–30 filings, 

particularly in light of his observation 

that the biggest problem may actually be 

‘‘false positives’’ and not ‘‘false 

negatives’’ (i.e., individuals who have 

nothing to report are nonetheless filing 

reports). The commenter’s point about 

the old form is valid. However, the 

revised form and instructions will 

resolve this problem. 

Item 2—Period Covered: One 

individual suggested that the 

instructions should make clear that the 

filer’s fiscal year should be the fiscal 

year used by his union in filing its Form 

LM–2, and another expressed confusion 

about whether reports should be based 

on the official’s fiscal year or his union’s 

fiscal year. The Department cannot 

dictate to a filer his or her fiscal year. 

The language of the statute states: ‘‘[the 

filer] shall file with the Secretary a 

signed report listing and describing for 

his preceding fiscal year * * *.’’ 29 

U.S.C. 432(a). The instructions as 

proposed appear to leave some 

ambiguity as to what fiscal year should 

be utilized by the filer. As such, the 

Department has added language to Part 

IX of the revised instructions indicating 

that the fiscal year is that of the filer, 

which may differ from the fiscal year 

utilized by the filer’s union for filing its 

annual financial report, Form LM–2, 

LM–3, or LM–4. 

Item 3(I)—Contact Information of 

Reporting Person: E-mail Address: One 

commenter expressed support for the 

added contact information required by 

Item 3. Other commenters voiced 

opposition to the addition of the filer’s 

e-mail address. The concern over e-mail 

addresses was that they are private and 

that their disclosure may lead to 

harassing e-mail, spam, unwanted 

solicitation, and viruses. Further, the 

commenters argued that the reporting of 

a filer’s office telephone number 

eliminates the need for the e-mail 

address. 

Although several commenters voiced 

concerns over the required inclusion of 

a filer’s e-mail address, none explained 

how this would violate the Privacy Act. 

No violation of such Act is apparent; 

there does not appear to be any greater 

privacy interest in a personal e-mail 

address than in a personal mailing 

address or phone number and such 


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information has long been required by 

Form LM–30 filers without any 

challenge on privacy grounds. The old 

Form LM–30 requires the address of the 

filer and the telephone number where 

the filer conducts official business, 

although a private, unlisted telephone 

number is not required to be reported. 

At the same time, the Department is 

sensitive to a filer’s concerns that by 

disclosing his or her e-mail address, the 

official may become the target of 

unsolicited e-mails or otherwise 

impeded in the use and enjoyment of 

his or her e-mail account. For this 

reason, the Department has decided that 

the filer has the option to disclose or not 

disclose his or her e-mail address. 

Summary: The Department received 

one comment supporting the addition of 

a summary schedule to Form LM–30. 

Other commenters opposed this 

schedule, asserting that the summary 

adds unnecessary burden, without 

adding any ‘‘significant value,’’ and 

creates confusion due to the lack of a 

readily apparent relationship between 

the payer and employer/union on the 

summary. One commenter noted that 

summarizing all payments in this 

manner leads to the conclusion that the 

total value is a ‘‘payment’’ when not all 

of the interests, such as share holdings, 

can be characterized as such. 

This summary enables viewers to 

quickly ascertain the payments and 

interests held in employers and 

businesses that may constitute a 

potential conflict of interest. This 

function is the essence of Form LM–30, 

and thus the summary is a significant 

improvement over the old form. The 

comments express concern over the 

confusion that would ensue from 

aggregating different types of interests 

and payments, and the Department has 

addressed this concern with the creation 

of the categories of ‘‘income or other 

payments’’ and ‘‘assets’’ on the 

summary section of the form. 

Part B—Schedule 1: Employer or 

Business Identifying Information: One 

commenter voiced general support for 

the new schedules and applauded the 

new contact information. Other 

commenters expressed opposition to the 

changes, in particular the business ID 

number and incorporation information. 

One commenter argued that the new 

payer identifying information was 

‘‘unduly burdensome,’’ requiring filers 

to conduct extensive research to 

compile such information, and with 

little value to the members and other 

viewers. Another stated that only the 

payer telephone number was justified, 

along with the payer name and address 

and the transactional information. 

Further, a union commented that it will 

be extremely difficult for a filer to locate 

payer information such as the state of 

incorporation/registration and state 

business ID number. 

This schedule will no longer combine 

data from all ‘‘payers’’ regardless of its 

classification as an employer, labor 

relations consultant, or business. The 

latter terms appear in the Act, unlike 

‘‘payer,’’ and the Department has 

restructured Part II of the instructions to 

detail the reporting requirements with 

these distinctions in mind. 

The Department has also eliminated 

Items K and L (State of Incorporation/ 

Registration and State Business ID 

number) of Schedule 1, as proposed. 

The commenters’ assertions that the 

inclusion of the business ID number and 

incorporation information will add 

significant burden to the reporting 

requirements appear valid. A filer must 

report all transactions in an accurate 

and clear manner, as well as provide 

basic contact and reference information; 

the filer should not also be required to 

perform research on the employer or 

business for information beyond what is 

needed to meet the statutory 

requirements. Further, viewers of these 

forms may be able to acquire such 

information on their own initiative if it 

is of interest to them; they will have the 

employer’s or business’ name and 

contact information to assist them in 

obtaining any desired additional 

information. 

Part B—Schedule 2: A labor educator 

presented some specific suggestions for 

this Schedule. He suggested that the 

form spell out the coding ‘‘O/E/S/C’’

under Item B, Schedule 2, i.e., ‘‘officer,’’

‘‘employee,’’ ‘‘spouse,’’ and ‘‘[minor] 

child.’’ Two other commenters 

expressed a similar concern. The 

Department has modified the form to 

meet these concerns. 

This commenter also suggested that 

the Department could use the 

Itemization Sheets and Schedules 15–19 

in the Form LM–2, with a standardized 

itemization sheet for all reportable 

transactions that roll-up into a singlesummary sheet. The itemization sheets 

for Schedules 15–19 of the Form LM–2 

are not appropriate or necessary for 

purposes of the Form LM–30. A filer 

using the electronic Form LM–30 will 

be able to create as many copies of 

Schedules 2 and 4 and of the additional 

information schedule as needed to 

complete the form. 

Instructions—Categories A1–A6: The 

most critical comments concerned the 

subsection-by-subsection layout of the 

proposed form. One commenter 

described it in hyperbolic terms, as 

‘‘requiring an encyclopedic knowledge 

of the Act.’’ Others simply suggested it 

was more difficult than necessary. The 

Department believed that the 

subsection-by-subsection approach had 

the value of showing the filer, by 

reference to the statutory language, 

exactly what he or she must report. 

While the Department continues to 

believe that this approach has value and 

may have been preferable for use by 

some filers, the Department is 

persuaded that this approach may lead 

to the perception that the Form LM–30 

is unnecessarily difficult to complete. 

Two commenters asserted that the 

proposed form, unlike the old form, 

‘‘fail[s] to collect interests and 

transactions into coherent categories. 

The proposed format, dependent on a 

complicated coding system, adds 

unnecessary complexity for filers.’’

Another commenter, a labor educator, 

generally opposed the use of the 

‘‘codes’’ A1–A6, because in his view it 

is possible to have more than one code 

for a payment. He also stated that he 

had found that potential filers had 

difficulty synchronizing the sections of 

the form with the instructions. For 

example, he stated that filers had to 

continually ‘‘flip back and forth’’ from 

the instructions to the form. He believes 

that this diminishes the effectiveness of 

the instructions. 

The Department has carefully 

considered the concerns expressed 

about the subsection-by-subsection 

approach of the proposed form. In place 

of this approach, the Department has 

decided instead to organize the form in 

a way that requests each filer to identify 

by employer and business the reportable 

interest, payment, loan, or transaction, 

and to identify whether it was held by 

or involved the filer, his or her spouse, 

or minor child. This approach, similar 

to the approach used in the old form, 

adopts the targeted approach used by 

Congress to identify the types of 

relationships from which a conflict 

between a filer’s personal interests and 

his or her duty to the union arises. 

Moreover, the classification of each 

payer as an employer, labor consultant, 

or business provides necessary context 

for a member or other viewer to 

properly analyze the potential conflict. 

Except for this change, the revised 

definitions and examples, the addition 

of some new examples, and the enlarged 

exception for reporting insubstantial 

payments, there have been no 

significant changes to the proposed form 

or instructions. 

The Department has also reduced the 

necessity to ‘‘flip back and forth’’ from 

the instructions to the form by putting 

more instructions and examples on the 

form itself (following the example of 

SF–278 required of Federal employees), 


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and by providing cross references, by 

page number of the instructions, for the 

definition of any terms needed to 

complete a particular section of the 

form. Also, to help alleviate this 

problem, the revised form utilizes Items 

6 and 7 to add clarity for both the filer 

and the reviewer of the form by listing 

the conditions under which 

arrangements, transactions, income or 

other payments, interests, and loans 

must be reported. These items help the 

filer, in particular, by focusing him or 

her on the pertinent provision in the 

instructions. 

Instructions Part II—Who must file 

and what must be reported: One 

commenter suggested that the ‘‘Do I 

have to file the LM–30’’ section of the 

instructions should be revised to allow 

an individual to more easily identify 

himself or herself as a Form LM–30 

filer. The Department has addressed this 

concern by removing the A1–A6 

categories, restructuring Part II of the 

instructions around the reporting 

requirements, exceptions, and examples 

of payments from employers and 

businesses; by revising some of the 

definitions, and by adding page 

citations to the cross-references. 

Another commenter acknowledged that 

the proposed form assisted potential 

filers by highlighting that no union 

official needs to file unless there has 

been reportable activity. The revised 

form contains the same statement. 

A commenter noted that the 

definition of ‘‘substantial’’ should 

include the word ‘‘employer’’ and not 

‘‘labor organization’’ at the end of the 

second sentence of the definition. The 

Department has corrected this error by 

indicating that the end of the second 

sentence of that definition should read 

‘‘employer’’ and not ‘‘labor 

organization,’’ as ‘‘substantial part’’ is 

found in the language of 202(a)(3) (a 

business that deals with the employer) 

and not in 202(a)(4) (a business that 

deals with a labor organization). 

Instructions—Examples and 

Definitions: A commenter opposed some 

of the examples, suggesting that they are 

unreal ‘‘lawyer’’ hypotheticals, better 

used to establish the bounds of the 

Department’s authority than to provide 

practical assistance to filers. Another 

commenter stated that fewer, better 

examples should be developed. He 

provided information to support his 

view that the definitions were 

confusing. He also suggested that the 

form should be redesigned to eliminate 

the need for filers to refer to different 

places in the instructions in order to 

complete the form, and that the 

instructions should include a section 

that brings together all the transaction 

criteria in each of the six subsection 

categories. Another commenter 

characterized the revised instructions as 

an improvement over the old ones, 

describing the examples as ‘‘particularly 

useful.’’

Many of the specific comments 

directed at examples have already been 

addressed in other sections of the 

preamble. The Department believes that 

these examples address typical 

reporting scenarios that will guide filers 

in their effort to comply with the 

reporting requirements. Nevertheless, 

the Department has carefully reviewed 

all the examples, and in several cases 

has added or modified language in an 

effort to clarify or simplify the guidance 

presented in them. Other examples, 

although reflecting a correct statement 

of a filer’s obligations (with the 

exception of example 1, at 70 FR 51217, 

which omitted a key fact), have been 

eliminated as redundant. 

Commenters expressed concern about 

the absence of examples involving 

transactions between, on the one hand, 

union officials and on the other section 

3(l) trusts or service providers to such 

trusts. The Department has added 

Example 3 under ‘‘(2) Payments of 

Money or Other Thing of Value from 

Certain Other Employers or a Labor 

Relations Consultant to Such an 

Employer’’ in Part II of the instructions, 

which relates to payments to a union 

official from a trust in which that 

official’s union is interested. Further, 

Part II of the instructions, ‘‘Reportable 

Payments and Interests from 

Businesses,’’ contains Examples 15 and 

17, which each deals with payments to 

a union official from service providers 

to trusts. 

Instructions—General Stylistic 

Comments: An individual offered 

several specific recommendations in 

regard to the instructions. He proposed 

that the Department utilize a single 

column rather than the double columns 

in the proposed form; the ‘‘Note on 

Definitions’’ should be indented below 

each definition; and the examples 

should be placed within graphic text 

boxes. He also suggested that the 

Department should either include a 

discussion of the Act’s legislative 

history in the instructions or separately 

publish such information to assist filers 

in understanding what is to be reported 

on the form. 

The Department has made several 

minor changes that add some clarity to 

the instructions. As to changing the twocolumn format, the Department 

disagrees. All the old Form LM 

instructions utilize two columns, and no 

other commenter expressed concern 

over this format. The Department 

believes that it is easier for readers to 

process information in a two-column 

format than by alternative presentation. 

The examples already stand out as 

they are numbered in bold type, so 

boxes around them are not needed. The 

Department has also consolidated many 

of the examples, based on its departure 

from the A1–A6 format in the proposed 

form. The Department has indented the 

‘‘Note on the Definitions’’ sections to 

aid the filer; created a new part of the 

instructions for definitions (Part III); 

numbered the definitions; and cited 

them with page number references in 

Part II of the instructions. 

The Department disagrees with the 

suggestion that the instructions should 

include a discussion of the Act’s 

legislative history. The instructions are 

intended to be straightforward and 

directed solely at the completion of the 

form. A discussion of legislative history, 

the language of the statute, and legal 

and policy questions would add 

additional, unnecessary length to the 

instructions. A filer desiring additional 

background information of this nature 

can easily obtain it by reviewing this 

preamble, the preamble to the proposed 

rule as published in the Federal 

Register, or through the Department’s 

own Web site and other governmental 

and publicly-accessible electronic 

information portals. 

The Department acknowledges that 

the revised form, like the proposed 

form, may ‘‘feel less intuitive’’ than the 

old form; however, it believes that the 

revised form will better meet the goals 

of the LMRDA than the old form. 

Moreover, to address the concerns of the 

commenters, the Department has made 

several changes to the form to facilitate 

its completion and use by union 

members and the general public. 

3. Completion of the Revised Form 

The first seven items on the revised 

Form LM–30, as published in today’s 

rule, provide basic information about 

the filer and his or her labor union; the 

number of employers and labor relations 

consultants and the number of 

businesses with which the filer engaged 

in reportable activity; and the total 

reported income and the total reported 

assets of the filer involving those 

employers, labor relations consultants, 

and/or businesses. Item 8 is for the 

signature, date, and telephone number 

of the filer. Items 1–8 have been 

designated as Part A of Form LM–30 for 

ease of reference. 

Both the proposed and revised forms 

provide a plain notice to filers that they 

should carefully review the instructions 

to the form before completing it. The 

revised form contains the notice on the 


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first page: ‘‘You are not required to file 

this report unless you * * * have 

received a payment, engaged in any 

transactions or arrangements, or held an 

interest of the types described in * * * 

the instructions.’’ The revised 

instructions include, on the second 

page, a discussion of the reporting 

exception for insubstantial payments 

and gifts to enable potential filers to 

more quickly determine whether they 

have a reporting obligation. To simplify 

the form’s completion, the instructions 

identify particular terms that must be 

understood for completing particular 

items. Page references are provided for 

these terms, which are now defined near 

the end of the instructions. By 

relocating the terms, a filer is able to 

more quickly start completing the form 

and focus only on those terms that affect 

the filer’s circumstances. 

The remainder of the form consists of 

Schedules 1 through 4 and is designated 

as Part B. The filer must complete a 

separate Part B in accordance with the 

instructions for each of the employers, 

labor relations consultants, or 

businesses with which the filer engaged 

in reportable activity. 

Item 1—File Number: No changes 

were proposed for this item, which is 

included in the old and revised forms. 

Item 2—Period Covered: No changes 

were proposed for this item, which is 

included in the old and revised forms. 

Item 3—Contact Information of 

Reporting Person: The addition of the 

filer’s e-mail address was proposed. 

However, the Department has decided 

to allow filers the option to disclose or 

not disclose his or her e-mail address. 

Item 4—Labor Organization 

Identifying Information: Both the 

proposed form and today’s form 

combine two items of the old form. 

Items 4F, 4G, and 4H on the revised 

form ask for information about the filer’s 

position in the union, whether it is an 

officer or employee position, and 

whether the filer held this position at 

the end of the reporting period. As 

noted in the NPRM, it is important as an 

enforcement matter to know whether 

the filer can still be reached at the 

union, and whether the filer may need 

to file Form LM–30 the following year. 

Item 5—Summary: The revised form 

adopted the concept of a summary 

schedule of reported payments and 

interests contained in the proposed 

form, but the proposed summary has 

been simplified in response to 

comments. The revised summary (now 

Item 5) shows total reported income or 

other payments and total reported 

assets. The summary no longer requires 

the filer to list each individual payer 

(employers, businesses, and labor 

relations consultants) and give a total 

value of all dealings with that payer as 

had been proposed. As discussed herein 

in greater detail, the aggregation of all 

types of dealings such as payments, 

share holdings, loans, and so forth was 

determined to be confusing. Instead, the 

filer now totals the amounts in Schedule 

2, Item F, Column (1) (value of income 

or other payments) of all the Part Bs and 

enters the total in Item 5A. The filer 

likewise totals the amounts in Schedule 

2, Item F, Column (2) (value of asset) of 

all the Part Bs and enters the total in 

Item 5B. 

Items 6 and 7—Employer 

Relationships and Business 

Relationships: To simplify reporting, 

Item 6 on the revised form identifies the 

relationships between, on the one hand, 

a filer’s union and, on the other hand, 

an employer or a labor relations 

consultant to an employer that will 

trigger a reporting requirement. Its 

counterpart, Item 7, identifies the types 

of relationships, direct and indirect, 

between a business and the filer’s union 

that will trigger a reporting requirement. 

These relationships are culled from the 

provisions of sections 202(a)(1) through 

202(a)(5), supplemented by particular 

relationships that trigger a report under 

section 202(a)(6). Filers no longer have 

to extract these relationships from the 

statutory language. If the filer has 

received a payment from or held an 

interest in such an employer or 

business, the language on the form 

directs the filer to review Part II of the 

instructions to determine whether or not 

any of the exemptions apply to the 

filer’s situation. Items 6(a) and 7(a) each 

contain a box for the filer to indicate 

whether or not he or she had any of the 

listed relationships. If the filer answers 

‘‘Yes’’ to Item 6(a) or 7(a), Items 6(b) and 

7(b) ask for the number of employers 

(and consultants) or the number of 

businesses with which the filer had a 

listed relationship. Items 6 and 7 clarify 

for both the filer and the reviewer of the 

form the entities from which payments 

and interests must be reported. 

Item 8—Signature: The signature box 

has been renumbered as Item 8, but it 

has not otherwise changed from the old 

or proposed forms. 

Part B: The ‘‘Payer Detail Page’’ from 

the proposed form is now called Part B 

and has four schedules. Schedules 1 and 

2 will be completed for both employers 

and businesses. Schedule 3 will be 

completed for employers only and 

Schedule 4 will be completed for 

businesses only, so only three schedules 

will be completed on each Part B, just 

as in the NPRM. Instructions and 

examples have been added to the 

schedules on the form to enable the filer 

to more easily complete the form. A 

separate Part B must be completed for 

each employer, business, or labor 

relations consultant from which the filer 

received a reportable payment or in 

which he or she had a reportable 

interest. 

Part B—Schedule 1: Employer or 

Business Identifying Information: All 

filers must complete this schedule. The 

schedule’s title has been changed from 

the proposed form’s ‘‘Payer Identifying 

Information.’’ The proposed form 

combined three items on the old form 

(Items 6, 8, and 13) that helped identify 

the source of a payment or the specific 

interest held by the filer, his or her 

spouse, or minor child. The proposed 

form also required the filer to provide 

contact information for each ‘‘payer,’’

including the telephone number, Web 

site address, state of incorporation or 

registration, and state business 

identification number. As noted in the 

NPRM, the additional contact 

information would make it easier for a 

person reviewing the report to identify 

the payer. The filer also would have to 

indicate whether he or she was 

associated with the payer at the end of 

the reporting period, information that 

would be helpful to the Department in 

determining whether the filer may be 

required to file a report the following 

year, thereby allowing the Department 

to conduct effective compliance 

assistance. The revised form no longer 

requests the filer to provide for each 

payer the state of incorporation/ 

registration or state business 

identification number. The Department 

has determined that filers may not have 

this information at hand and that asking 

them to obtain such information would 

impose an unnecessary burden. The 

Department has retained new items 

such as the entity’s telephone number 

(Item I) and Web site address (Item J). 

The schedule also requires the 

information that would be found in the 

old form. The Department has also 

preserved the proposed form’s 

requirement for the filers to indicate 

whether the union official (or spouse or 

minor child) had a continuing 

relationship with the employer, 

business, or labor relations consultant at 

the end of the reporting period. 

Part B—Schedule 2: Interests in, 

Payments From, Loans to or From, and 

Transactions or Arrangements with 

Employer or Business and Payments 

from a Labor Relations Consultant: All 

filers must complete this schedule. This 

schedule replaces and renames 

Schedule 2 on the ‘‘Payer Detail Page’’

of the proposed form. The term ‘‘payer,’’

as noted in the NPRM, was an awkward 

phrase; it is no longer needed in the 


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revised form. The proposed form 

required filers to identify reportable 

interests, payments, loans, transactions, 

and arrangements by the specific 

provisions of section 202 of the LMRDA. 

As in the proposed form, the revised 

Schedule 2 requires the reporting of the 

date of each reportable payment and 

interest and whether it was received or 

held by the filer, his or her spouse, or 

his or her minor child; this information 

was not always reported on the old 

form. Language on this schedule 

clarifies the information that must be 

reported, the format in which the 

information must be reported, and 

references the instructions for further 

review of filing criteria. The layout of 

the schedule itself remains largely 

unchanged from the proposal, which in 

turn is derived from Items 7, 12, and 14 

of the old form. The most significant 

change in the revised form’s Schedule 2 

is the deletion of Item C of the proposed 

form, which required the filer to 

indicate the subsection of section 202 of 

the LMRDA (A1–A6) that required the 

disclosure of each reported payment or 

interest. As explained in greater detail 

elsewhere in this preamble, this 

requirement was deleted in response to 

comments. Item C ‘‘Description of 

Interest, Payment, Loan, Transaction, or 

Arrangement’’ on the revised form is 

identical to Item D on the proposed 

form. Item D, ‘‘Value’’ on the revised 

form (Item E on the proposed form), has 

been divided to include separate 

columns for ‘‘Value of Income or Other 

Payments’’ and ‘‘Value of Asset.’’ The 

instructions for this item in Part IX 

clarify what must be reported in each 

column of Item D. The filer must add 

the data in the income column and in 

the asset column, and record these totals 

in Item F. 

Part B—Schedule 3: Employer’s 

Relationship with Your Labor 

Organization: This schedule must be 

completed only by filers who are 

completing Part B for payments from, or 

interests in, an employer (or a labor 

relations consultant to an employer). It 

replaces Schedule 3 from the proposed 

form, ‘‘Payer’s Dealings with Union(s), 

Trust(s), or Employer(s)’’ with respect to 

employers. This schedule, unlike the 

old or proposed forms, provides a 

checklist of relationships between the 

filer’s union and employers and 

businesses that will trigger a reportable 

interest. The relationships are culled 

from the language of sections 202(a)(1) 

through (a)(5) and from the 

Department’s interpretation of section 

202(a)(6). 

In Item A the filer will check the 

appropriate box(s) describing the 

relationship between the employer and 

the filer’s labor organization. This will 

clarify the exact nature of the 

relationship for both the filer and the 

reviewer of the form. Item B of the 

schedule asks for a detailed description 

of the dealings between the two entities. 

Item B(1) requests a dollar value of the 

transactions between the entities. If the 

employer’s relationship with the filer’s 

labor organization is based on the labor 

organization’s representation of the 

employer’s employees or actively 

seeking to represent the employees or if 

the relationship cannot otherwise be 

readily assigned a monetary value, the 

filer should enter ‘‘N/A.’’ The need for 

this schedule derives from the changes 

in the Department’s interpretation and 

implementation of section 202(a)(6) as 

discussed elsewhere in this preamble. 

Together with Schedule 4 that 

compiles similar information for 

reportable interests that arise from 

business relationships with a filer’s 

union, this schedule, like the proposed 

Schedule 2, combines and simplifies 

information that is now collected in 

multiple items of the old form. Both the 

proposed form and the revision in 

today’s rule asks filers to provide for 

each reportable matter the source of the 

payment or the specific interest, its 

recipient or holder (filer, spouse, or 

minor child), a description of the 

reportable matter, and its value. The 

schedule, as revised, also includes 

examples of reportable items, which 

should assist filers in determining the 

manner and detail in which reportable 

items should be identified and 

described. 

Part B—Schedule 4: Business’s 

Dealings with Union(s), Trust(s), or 

Employer(s): This schedule must be 

completed only by filers who are 

completing Part B for payments from, or 

interests in, a business that deals with 

the filer’s labor organization, a trust in 

which the filer’s labor organization is 

interested, or an employer whose 

employees the filer’s labor organization 

represents or is actively seeking to 

represent. This schedule replaces the 

proposed Schedule 3, ‘‘Payer’s Dealings 

with Unions(s), Trusts(s), or 

Employer(s),’’ with respect to 

businesses. The new Schedule 4 largely 

resembles its predecessor Schedule 3 in 

the proposed form, which combined 

and simplified information reported in 

Items 9, 10, and 11 of the old form. Item 

B now reads ‘‘Union/Trust/Employer,’’

rather than ‘‘U/T/E.’’ Filers are no 

longer required to compute and enter a 

total on the form for the value reported. 

As noted above, this schedule, 

combined with Schedule 3 that 

compiles similar information for 

reportable interests and payments from 

employers, asks filers to identify for 

each reportable matter the source of the 

payment or the specific interest, its 

recipient or holder (filer, spouse, or 

minor child), a description of the 

reportable matter, and its value. 

Although the proposed form asked the 

filer to designate for each reportable 

matter the subsection under which the 

report was triggered, the revised form 

does not ask for such information. The 

schedule, as revised, also includes 

examples of reportable items, which 

should assist filers in determining the 

manner and detail in which reportable 

items should be identified and 

described. 

Labor Organizations in Which the 

Reporting Person is an Officer or 

Employee—Continuation Page: This 

page is a continuation of, and is 

identical to, Item 4 on the revised Form 

LM–30. It is for use by a filer who is an 

officer or employee of more than one 

labor organization. 

Additional Information Schedule: 

This schedule is identical in both the 

proposed and revised forms. It allows 

filers to provide additional information 

or explanations about other items in the 

form. This is similar to additional 

information items found on other OLMS 

forms, but the old Form LM–30 does not 

contain such an item. 

Summary Schedule Continuation 

Page: The Department has eliminated 

this continuation page that was part of 

the proposed form, as the revisions to 

Item 5, the Summary, have removed the 

necessity for it. 

Schedule 2 Continuation Page: The 

Department has retained a continuation 

page for the new Schedule 2. 

Schedule 4 Continuation Page: The 

Department has added a continuation 

page for the new Schedule 4. 

Instructions Part I, Why File: This part 

of the instructions is largely unchanged 

from the old and proposed forms. 

Instructions Part II, Who Must File 

and What Must Be Reported and Part III, 

Definitions: Part II of the instructions 

has been amended in several significant 

ways from the proposed form. The 

Department has abandoned the layout of 

the instructions in the ‘‘A1–A6’’ format, 

and it has adopted an arrangement in 

which the instructions guide the filer 

according to the reporting requirements 

for payments from and interests in 

employers (and labor relations 

consultants) and businesses. Further, 

the Department has removed the 

definitions from Part II of the 

instructions, numbered them, and 

placed them in a new Part III. The 

reporting requirements in Part II cite the 

number and page of each of the 

definitions in Part III. Finally, the 


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Department has modified some of the 

definitions as earlier discussed in the 

preamble. 

Instructions Part IV, When to File: 

This part has been renumbered from the 

old form, but no substantive changes 

have been made. 

Instructions Part V, Where to File: 

This part has been renumbered from the 

old form, but no substantive changes 

have been made. 

Instructions Part VI, Public 

Disclosure: This part has been 

renumbered from the old form and 

updated information, including the 

Internet Public Disclosure Room, has 

been added. 

Instructions Part VII, Officer or 

Employee Responsibilities and 

Penalties: This part has been 

renumbered from the old form, but it is 

identical to the proposed form. 

Instructions Part VIII, Recordkeeping: 

This part has been renumbered from the 

old form and a reference has been added 

to retaining electronic documents. A 

similarly worded statement is adopted 

as section 404.7 of the Department’s 

regulations (to be codified at 29 CFR 

404.7)). This represents a clarification of 

existing recordkeeping requirements, 

and is not intended as any change in the 

law governing the maintenance and 

retention of records. 

Instructions Part IX, Completing Form 

LM–30: The Department has modified 

this part of the instructions, the former 

Part VIII of the proposed instructions, to 

correspond to the changes made to the 

revised Form LM–30. 

III. Regulatory Procedures 

A. Executive Order 12866 

This final rule has been drafted and 

reviewed in accordance with Executive 

Order 12866. The Department has 

determined that this rule is not an 

‘‘economically significant’’ regulatory 

action under section 3(f)(1) of Executive 

Order 12866. Because compliance with 

the rule can be achieved at a reasonable 

cost to covered union officers and 

employees, the rule is not likely to meet 

the 3(f)(1) definition of having an 

annual effect on the economy of $100 

million or more or adversely affect in a 

material way the economy, a sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local or tribal 

governments or communities. As a 

result, the Department has concluded 

that a full economic impact and cost/ 

benefit analysis is not required for the 

rule under Section 6(a)(3) of the Order. 

However, the Department determined 

because of its importance to the public 

that this final rule is a significant 

regulatory action under the Executive 

Order and therefore, it was reviewed by 

the Office of Management and Budget. 

The burden imposed by the revision 

of the Form LM–30 is addressed in the 

Paperwork Reduction Act section, 

below. 

The Department believes that 

increased transparency for union 

officers and employees will provide 

substantial benefits to union members 

and the union itself, as well as to 

outside academic researchers, members 

of the public, and other stakeholders. 

Transparency promotes the unions’ own 

interests as democratic institutions. By 

these improvements, union members 

will obtain a more accurate picture of 

the personal financial interests of their 

union’s officers and employees, as those 

interests may bear upon their actions on 

behalf of the union and its members. 

With this information, union members 

will be better able to understand any 

financial incentives or disincentives 

faced by their union’s officers and 

employees and to make more informed 

choices about the leadership of their 

union and its management of its affairs. 

Through these actions, the Department 

effectuates the reporting obligation 

established by section 202 of the 

LMRDA and advances the Act’s 

declared purpose ‘‘that labor 

organizations, employers, and their 

officials adhere to the highest standards 

of responsibility and ethical conduct in 

administering the affairs of their 

organizations.’’ Section 2(a) of the 

LMRDA, 29 U.S.C. 401. 

B. Small Business Regulatory 

Enforcement Fairness Act 

For similar reasons as those discussed 

in section A, the Department has 

concluded that this final rule is not a 

‘‘major’’ rule under the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (5 U.S.C. 801 et seq.). It will not 

likely result in (1) An annual effect on 

the economy of $100 million or more; 

(2) a major increase in costs or prices for 

consumers, individual industries, 

Federal, State or local government 

agencies, or geographic regions; or (3) 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic or export 

markets. 

C. Unfunded Mandates Reform 

For purposes of the Unfunded 

Mandates Reform Act of 1995, this rule 

does not include a Federal mandate that 

might result in increased expenditures 

by State, local, and tribal governments, 

or increased expenditures by the private 

sector of more than $100 million 

(adjusted for inflation) in any one year. 

D. Executive Order 13132 (Federalism) 

The Department has reviewed this 

rule in accordance with Executive Order 

13132 regarding federalism and has 

determined that the rule does not have 

‘‘federalism implications.’’ The 

economic effects of the rule are not 

substantial and the rule does not have 

‘‘substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government.’’

E. Regulatory Flexibility Act 

The Regulatory Flexibility Act of 

1980, 5 U.S.C. 601–612, requires 

agencies to prepare regulatory flexibility 

analyses, and to develop alternatives 

wherever possible, in drafting 

regulations that will have a significant 

impact on a substantial number of small 

entities, including ‘‘small businesses,’’

‘‘small organizations,’’ and ‘‘small 

governmental jurisdictions.’’ Today’s 

rule revises the reporting obligations of 

union officers and employees, who, as 

individuals, do not constitute small 

business entities. Accordingly, the final 

rule will not have a significant 

economic impact on a substantial 

number of small business entities. 

Therefore, under the Regulatory 

Flexibility Act, 5 U.S.C. 605(b), a 

regulatory flexibility analysis is not 

required. 

F. Paperwork Reduction Act 

This statement is prepared in 

accordance with the Paperwork 

Reduction Act of 1995, 44 U.S.C. 3501 

(‘‘PRA’’). See 5 CFR 1320.9. As 

discussed in the preamble to this final 

rule and the analysis that follows below, 

the rule implements an information 

collection that meets the requirements 

of the PRA in that: (1) The information 

collection has practical utility to labor 

organizations, their members, other 

members of the public, and the 

Department; (2) the rule does not 

require the collection of information 

that is duplicative of other reasonably 

accessible information to the extent 

practicable; (3) the provisions reduce to 

the extent practicable and appropriate 

the burden on union officials who must 

provide the information; (4) the form, 

instructions, and explanatory 

information in the eamble are written in 

plain language that will be 

understandable by reporting officials; 

(5) the disclosure requirements are 

implemented in ways consistent and 


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compatible, to the maximum extent 

practicable, with the existing reporting 

and recordkeeping practices of union 

officials who must comply with them; 

(6) the preamble and the instructions to 

the Form LM–30 inform union officials 

of the reasons that the information will 

be collected, the way in which it will be 

used, the Department’s estimate of the 

average burden of compliance, which is 

mandatory for officials with reportable 

interests, the fact that all information 

collected will be made public, and the 

fact that officials need not respond 

unless the form displays a currently 

valid OMB control number; (7) the 

Department has explained its plans for 

the efficient and effective management 

and use of the information to be 

collected, to enhance its utility to the 

Department and the public; (8) the 

Department has explained why the 

method of collecting information is 

‘‘appropriate to the purpose for which 

the information is to be collected’’; and 

(9) the changes implemented by this 

rule make extensive, appropriate use of 

information technology ‘‘to reduce 

burden and improve data quality, 

agency efficiency and responsiveness to 

the public.’’ See 5 CFR 1320.9; 44 U.S.C. 

3506(c). 

As discussed throughout the 

preamble, today’s rule provides various 

benefits to unions, union members, this 

Department, and the public. The 

information has obvious utility for these 

groups, among other reasons, by 

ensuring more complete compliance by 

labor union officials with the LMRDA’s 

reporting obligations. The rule provides 

for the collection of information in a 

way that is compatible with electronic 

reporting and the dissemination of this 

information to the interested 

community of users. In so doing, it 

better achieves the public disclosure 

purposes served by the Act’s reporting 

provisions than the existing rule. 

Although the effectiveness of today’s 

rule depends, in large part, on a set of 

instructions for the Form LM–30 that is 

longer than the instructions for the old 

form, the additional length is largely the 

result of the inclusion of numerous 

definitions and examples, designed to 

assist filers in understanding their 

reporting obligations. The absence of 

this information in the instructions to 

the old form was a significant 

impediment to compliance by filers and 

the utility of reported data. The 

inclusion of this information in today’s 

rule benefits filers and the public; any 

additional time required to read the 

instructions is a small burden in 

comparison to the knowledge provided 

filers and the predicted gains in the 

numbers and completeness of the forms 

submitted to the Department. 

The final rule more closely resembles 

the format of the old form than the form 

proposed by the Department. Unlike the 

proposed form, the form embodied in 

today’s rule may be completed without 

need for the filer to identify the 

statutory provision that triggers a 

reportable interest. This change 

eliminates a concern by many 

commenters that the proposed form 

imposed unnecessary burdens on filers. 

Various other changes have been made 

to the form that was proposed and its 

accompanying instructions. The 

Department has achieved its goal of 

designing a rule that meets the 

disclosure purposes intended by 

Congress—the complete and meaningful 

reporting of information about actual or 

potential conflicts of interest between a 

union official’s personal financial 

interests and the official’s duty to his or 

her union and its members. Moreover, 

this goal has been achieved without 

imposing any unnecessary burden on 

union officials. While the Department 

believes that the form and instructions 

provide ready answers to typical 

questions that may rise in completing 

the form, the Department has a robust 

compliance assistance program in place 

to assist filers in timely and correctly 

fulfilling their reporting obligations. 

Most of the information collected by 

the form is unavailable in any other 

public document; to the extent there 

may be some overlap with reports 

required by fiduciaries under other 

laws, the duplication, albeit minimal, is 

unavoidable. The rule’s recordkeeping 

requirements are identical to the old 

rule with the exception of the 

requirement that filers preserve any 

electronic information used to complete 

the form. This requirement is consistent 

with contemporary recordkeeping 

standards and elicited no unfavorable 

comment. 

The Department’s NPRM in this 

rulemaking contained initial Regulatory 

Flexibility Act and PRA analyses, which 

were submitted to and reviewed by 

OMB. Based upon careful consideration 

of the comments and the changes made 

to the Department’s proposal in this 

final rule, the Department has made 

significant adjustments to its burden 

estimates. The costs to the Department 

for administering the reporting 

requirements of the LMRDA also were 

adjusted. 

Pursuant to the PRA, the information 

collection requirements contained in 

this final rule have been submitted to 

OMB for approval. Within 30 days of 

the date of publication of this final rule, 

you may direct comments by fax (202–

395–6974) to: Desk Officer for the 

Department of Labor/ESA, Office of 

Management and Budget. 

Summary: This final rule modifies the 

public financial disclosure reports that 

section 202 of the LMRDA requires to be 

filed by labor union officers and 

employees for any fiscal year in which 

they have certain holdings, receive 

certain payments or income, or engage 

in certain financial transactions or 

arrangements. The revised paperwork 

requirements are necessary to reduce 

the errors and deficiencies in the 

reports, raise the number of union 

officials that comply with the reporting 

requirements, and increase the 

transparency of the financial practices 

of such officials. More accurate reports 

and increased transparency will allow 

union members to view the information 

needed by them to monitor their union’s 

affairs and to make informed choices 

about the leadership of their union and 

its direction. Such improvements 

promote the unions’ own interests as 

democratic institutions and the interests 

of the public and the government. 

Financial disclosure deters fraud and 

self-dealing, and facilitates the 

discovery of such misconduct when it 

does occur. Increased compliance will 

be achieved by clarifying the form and 

instructions, offering numerous 

examples to guide filers, deleting or 

limiting exceptions that allowed some 

financial matters that posed conflicts of 

interest to go unreported, and 

organizing the information in a more 

useful format. For a more detailed 

discussion of the purposes served, and 

benefits achieved, by the changes to the 

Form LM–30, its instructions, and 

related Department regulations, see the 

discussion above at Section I.C.1. 

The revised Form LM–30 and 

instructions that will implement the 

new reporting requirements are 

published as an appendix to today’s 

final rule. The electronic versions of the 

revised Form LM–30 and instructions 

are now available on the OLMS Web site 

at http://www.olms.dol.gov. 

Background: The Form LM–30 is used 

by officials of labor unions to comply 

with the Act’s requirement that such a 

union official annually disclose 

specified payments or other financial 

benefits received by the official, his or 

her spouse, or minor children from 

employers and businesses where such 

payments or other financial benefits 

pose actual or potential conflicts 

between an official’s personal financial 

interests and the interests of the 

official’s union and its members. 

Subject to specified exceptions, the 

interests, incomes, transactions, and 

arrangements subject to reporting 


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1Through increased compliance assistance efforts 

explaining that a report need only be filed to report 

certain transactions and that filing blank forms is 

unnecessary, the Department intends to eliminate 

or minimize the filing of blank reports. 

2Both figures have been obtained from the 

Department’s Electronic Labor Organization 

Reporting System database (‘‘eLORS’’), which stores 

and automatically culls certain information, such as 

union officer and employee salaries, from annual 

reports submitted by labor organizations. The total 

number of labor organizations has been used in the 

Department’s submission to OMB for continuing 

PRA approval of OLMS forms. This information is 

based on FY 2005 data. The number of union 

officials was based on a query of applicable data in 

the eLORS system. This same figure was used in the 

NPRM’s PRA analysis. See 70 FR 51199. 

comprise: (1) Payments or benefits from, 

or interests in, an employer whose 

employees the filer’s union represents 

or is actively seeking to represent; (2) 

transactions involving interests in, or 

loans to or from, an employer whose 

employees the filer’s union represents 

or is actively seeking to represent; (3) 

interests in, income from, or 

transactions with a business a 

substantial part of which consists of 

dealing with an employer whose 

employees the filer’s union represents 

or is actively seeking to represent; (4) 

interests in, income from, or 

transactions with a business that deals 

with the filer’s union or a trust in which 

the filer’s union is interested; (5) 

transactions or arrangements with an 

employer whose employees the filer’s 

union represents or is actively seeking 

to represent; and (6) payments from an 

employer or labor relations consultant. 

See section 202(a)(1)–(6). 

Overview of Changes to Form LM–30 

and Summary of the Need for the Rule: 

The revised Form LM–30 and 

instructions define terms used in the 

form, provide examples to assist the 

filer in identifying reportable financial 

events, and remove or limit certain 

exceptions that allowed financial 

matters of interest to union members to 

go unreported under the current 

reporting scheme. A detailed discussion 

of the proposed and revised forms and 

instructions is set forth at Section II.N. 

herein. 

Estimated Universe of Filers: The 

Department initially estimated that it 

would receive 2,046 Form LM–30 

reports per year as a result of the final 

rule. This figure was based on the then 

current estimated filing rate of 0.03% of 

all union officers and employees plus an 

expected increase in the Form LM–30 

filing rate to 1% as a result of the 

proposal. See 70 FR 51199. For the final 

rule, a revised estimate, based on the 

public comment and the number of 

Form LM–30s filed with the Department 

during fiscal year 2006 has been used. 

During fiscal year 2006, the Department 

received 4,348 Form LM–30 reports, 882 

of which did not contain information on 

any transaction or interest, i.e., blank 

reports, resulting in a total of 3,466 

valid Form LM–30 reports filed during 

fiscal year 2006.1 As explained in the 

following paragraphs, the Department 

considered key aspects of the final rule 

and assessed the impact of the revised 

reporting provisions by estimating the 

relative frequency that such provisions 

would result in filings. In making these 

estimates, the Department relied upon 

information it has previously used in 

determining paperwork estimates: the 

number of unions filing annual financial 

reports (21,792) and the number of 

officials (204,634) serving these 

unions.2 See 70 FR 51171. Applying this 

methodology as discussed below, the 

Department estimates that under today’s 

rule, it will receive 3,450 additional 

Form LM–30 reports. Thus, the 

Department estimates that a total of 

6,916 revised Form LM–30 reports will 

be filed annually. 

In the NPRM, the Department 

estimated that the clarification of the 

Form LM–30, the defined terms, the 

addition of examples that illustrate 

reportable and nonreportable 

transactions, and the removal of 

administrative filing exemptions would 

increase the number of individuals who 

file the Form LM–30. See 70 FR 51199. 

Using the best data available, the 

Department estimated that there are 

204,634 union officers and employees. 

Further, based on the Department’s 

receipt of approximately 61 reports 

annually (the annual average for fiscal 

years 2001–2005), the Department 

estimated a current filing rate of 0.03% 

(61/204,634 × 100 = 0.03%). Due to the 

proposed reforms, as well as increased 

compliance assistance and enforcement 

initiatives, the Department estimated 

that the filing rate would increase to 

approximately 1%, or 2,046 reports filed 

annually. The NPRM estimate was 

based on the opinion of some 

stakeholders that relatively few union 

officers and employees would be 

engaged in covered transactions. Id. The 

Department acknowledged the 

considerable uncertainty in this 

estimate and requested comment on the 

number of reports that should be filed 

under the old requirements and that 

may be filed as a result of the new 

requirements. Id. The comments 

received on the proposed rule have 

proven only marginally helpful in 

predicting how today’s rule will affect 

the future number of Forms LM–30 filed 

annually. 

Review of Public Comments on the 

Estimated Universe of Filers and 

Resulting Changes: 

One commenter questioned the 

Department’s estimate of the proposed 

universe of filers, arguing that the 

Department does not have relevant 

historic data on which to base its 

estimates, but is rather basing its 

expectations on the limited study 

discussed in the NPRM. Both for the 

proposed rule and today’s rule, the 

Department has forecast the number of 

expected filers as accurately as possible 

based on available data. The Department 

has revised its initial estimates of the 

number of expected filers by using data 

on the number of reports filed with 

OLMS during fiscal year 2006. During 

that time, the Department received 

4,348 Form LM–30 reports, 882 of 

which were blank. As demonstrated 

below, the Department has adjusted its 

estimated universe of filers based on 

this figure and input received from 

commenters. 

A number of commenters argued that 

the proposed universe of filers and the 

corresponding reporting and 

recordkeeping burdens, as discussed in 

the NPRM, were too low given that the 

proposed de minimis exception, i.e., the 

threshold below which a payment 

would not be reportable, was limited to 

payments of $25 or less. Commenters 

suggested that a de minimis level set at 

that amount would lead to a much 

higher incidence of filings than 

anticipated by the Department. One 

commenter pointed out that a $250 de 

minimis level, especially with a twotiered approach, would result in a 

reduced compliance burden. In 

response to comments received on this 

point, the Department has replaced the 

proposed $25 de minimis test with a 

two-tiered approach. Under this 

approach, a filer must report aggregated 

payments or other financial benefits 

received from a single source that 

exceed $250. Payments of $20 or less are 

excluded from this computation. 

Further, union officials will not have to 

report hospitality benefits received 

while attending certain widely attended 

gatherings. As noted herein at Section 

II.C of the preamble, after the comment 

period for this rule closed, the 

Department issued guidance alerting 

filers, in effect, that they need report 

only payments that exceeded $250. This 

guidance was posted on the OLMS Web 

site on November 7, 2005 and 

disseminated through the OLMS e-mail 

listserv. Consequently, the Department 

has had a full year to gauge the impact 

of a $250 filing threshold. Not 

surprisingly, as a result of the 

implementation of the $250 de minimis 


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approach, there have been fewer filers 

reporting payments between $25 and 

$250. Thus, contrary to the suggestion of 

some commenters, no upward 

adjustment to the recordkeeping and 

reporting burden need be made for 

reasons associated with the de minimis 

level, as proposed. Moreover, the $250 

threshold and the exclusion of 

payments of $20 or less from this 

threshold will lead to fewer filings than 

expected by commenters. 

In the NPRM, the Department 

proposed that union officials must 

report all payments received from any 

employer or vendor with a relationship 

with any level of his or her union or 

with any trust in which any level of his 

or her union is interested. This would 

require, for example, that a local union 

president report payments received 

from a vendor that does business with 

the official’s parent or intermediate 

union. The rule proposed to achieve this 

result by defining the term ‘‘labor 

organization’’ broadly. Several 

commenters submitted that the 

ramifications of implementing the 

proposed definition of ‘‘labor 

organization’’ could lead to requiring 

filers to account for transactions vastly 

exceeding the estimated burden in the 

NPRM. One of these commenters 

presented a hypothetical scenario that 

would result in a union official having 

to account for possible transactions with 

over 10,000 employers or businesses for 

not only himself or herself, but for a 

spouse and minor children as well. 

This comment appeared to be 

premised on the belief that all 

businesses and employers associated 

with any entity within a union’s 

hierarchy will need to be tracked by the 

officer or employee. This is not the case. 

The union official does not need to 

research and maintain records with all 

involved businesses or employers, but 

only those with which he or she is in 

a reportable relationship or from which 

he or she has received a reportable 

payment. The maximum burden on an 

officer or employee, in this regard, is to 

check the identity of these employers 

and businesses. Further, some 

commenters submitted that compliance 

burdens would be substantially lessened 

by modifying the proposed definition of 

‘‘labor organization’’ to eliminate the 

language ‘‘and any parent or 

subordinate labor organization of the 

filer’s labor organization.’’ In response 

to comments received on this issue, the 

final rule has reduced the reporting 

obligations from that proposed. The rule 

requires that a local union official track 

and report payments from only 

businesses that deal with their local 

union, trusts of their local union, and 

employers represented by, or actively 

being organized by, their local union. 

This tracks the reporting obligations 

under the old rule, and does not 

increase the reporting burden based on 

a broader definition of ‘‘labor 

organization.’’ See discussion at Section 

II.F of the preamble. 

Officers of international unions and 

intermediate unions (but not employees) 

will also have to report any payments 

they receive from (1) An employer 

whose employees any subordinate labor 

union represents or is actively seeking 

to represent; (2) a business that buys 

from, sells to, or otherwise deals with 

any subordinate labor union; and (3) a 

business that buys from, sells to, or 

otherwise deals with a trust in which 

any subordinate labor union is 

interested, such as a pension or welfare 

plan or training fund. Employees of 

national, international, and intermediate 

labor unions do not have to track and 

report payments resulting from actions 

involving subordinate levels of the 

union. 

As for the reporting impact of this 

provision, the Department estimates a 

slight increase in the number of reports. 

The largest portion of this increase is 

most likely to come from officers of 

intermediate labor unions. For these 

officers, the rule is new. Since 1962 

international officers have been required 

to report on Form LM–30 income from 

businesses dealing with subordinate 

unions of that international. Therefore, 

increased filing under this provision by 

officers of international unions will be 

attributable to increased compliance 

assistance and enforcement efforts, and 

not to the final rule. 

Many of the same commenters 

asserted that the NPRM did not address 

compliance costs and time for 

businesses to enact internal controls, 

which could entail substantial costs. 

Employers, including service providers, 

have been under the same reporting 

requirements since 1963 and no changes 

are being made to these requirements. 

Employer reporting requirements are 

governed by section 203 of the LMRDA. 

This rulemaking adjusts union officer 

and employee reporting under section 

202 of the LMRDA. Therefore, not only 

is there no need to raise PRA estimates 

for employer recordkeeping, such 

estimates are not within the scope of 

this rulemaking. 

One commenter submits that 

compliance burdens will be 

substantially lessened by determining 

that trusts are not ‘‘businesses’’ or 

‘‘employers.’’ As explained in the 

preamble, trusts with employees are 

considered to be employers. The 

Department’s views on whether the 

LMRDA requires disclosure of payments 

from trusts to union officials have 

evolved over time. In correspondence 

issued in 1967, a high ranking 

Department official responded to an 

inquiry concerning whether reporting is 

required of officers of labor unions who 

receive payments from union and 

employer established pension and 

welfare plans. The letter concluded that 

no report was required. On June 27, 

2005, OLMS placed on its Web site a 

document titled ‘‘Trusts and Form LM–

30 and Form LM–10.’’ In this guidance, 

OLMS indicated that payments from 

trusts to union officers and employees 

are reportable on Form LM–30 if the 

trust is an employer or business. As part 

of this rulemaking, the Department 

sought comments on whether a trust is, 

or can constitute, an ‘‘employer’’ or a 

‘‘business,’’ making such payments 

reportable on the Form LM–30. These 

comments, and the determination that a 

trust or similar entity with employees is 

an employer for purposes of the Act, are 

addressed in depth in the preamble at 

section II.K. 

No commenters provided estimates 

for the number of trusts that constitute 

‘‘employers’’ and make reportable 

payments. Although the comments 

provided some anecdotal information 

particular to some unions, no 

information was provided that would 

allow the Department to estimate the 

total number of trusts that would be 

employers and none that would allow 

an estimate of the numbers of union 

officials now receiving payments from 

such entities. For example, one 

international union stated that there are 

‘‘380 Local or Council * * * Pension, 

Annuity, Health and Welfare, and 

training trusts in the U.S.’’ Another 

commenter identified four trusts it cosponsored. Another international union 

indicated that ‘‘although some large 

trust funds happen to have employees, 

many do not.’’ Finally, yet another 

international union explained that it 

and its affiliated district councils and 

local unions participate in ‘‘numerous 

benefit funds.’’ There is no basis to 

believe that other unions have trusts in 

the same proportion as theses unions. 

Moreover, no information was received 

that would enable an estimate as to 

what fraction of these trusts have 

employees or the number of union 

officials to whom reportable payments 

are made. 

Payments received by an officer or 

employee of a labor union from the 

employer of the union’s members for 

work performed by the union officer or 

union employee for the union will now 

be reportable unless they are made 

pursuant to a collective bargaining 


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agreement and total 250 hours or less 

per year. For the proposition that such 

provisions are common, a federation of 

labor organizations submitted a study, 

Major Collective Bargaining 

Agreements: Employer Pay and Leave 

for Union Business, U.S. Dept. of Labor, 

Bureau of Labor Statistics (October 

1980) (‘‘BLS Study’’). Notwithstanding 

the significant period of time that has 

passed since the study’s publication, it 

represents the most recent compilation 

of data on the union-leave/no-docking 

question. Furthermore, more recent 

papers on this issue focus on public 

sector unions, which, as previously 

noted, are generally not subject to the 

LMRDA, and thus such information is 

not readily transferable to the particular 

circumstances addressed by today’s 

rule. The BLS Study (at pages indicated 

in parentheses) provides the following 

information: 

• Of 1,765 agreements reviewed, 803, 

or 45 percent, granted pay for grievance 

time (6) 

• Of 430 sample agreements 

examined in detail, 206 established pay 

for at least some grievance work (6) 

• Of 206 sample clauses, 188 limited 

pay to either specific union 

representatives or to a fixed number of 

representatives (7) 

• A substantial number of the 206 

sample pay clauses limited the amount 

of paid time available for grievance 

activity by type of activity or eligible 

personnel (7) or by the amount of time 

one could spend on union work (7–9) 

• Of the 1,765 agreements in the 

study, arbitration provisions appeared 

in 95 percent, but pay to union 

representatives for time spent appeared 

in only 3% (11) 

• Of 1,765 agreements, 139 

established time off with pay for union 

negotiators (7.8%) (12) 

• Of 618 safety and health committee 

provisions reviewed, 281 referred to 

paid time for the activity (45%) (13) 

• Of 1,765 agreements, 93 referred to 

training related to union business; half 

of these provide company pay (93/2 = 

46.5) (46.5/1,765 = 2.6%) (17) 

While it is clear from the BLS Study 

that the collective bargaining 

agreements under review contained a 

high number of union-leave/no-docking 

provisions, neither the study nor the 

comments provide a basis for estimating 

how many of these agreements will 

result in the filing of a Form LM–30. 

The study demonstrates that 45% of 

these collective bargaining agreements 

grant union leave in at least one 

category (as outlined, 45% of provisions 

provided union leave for grievances and 

health and safety). However, a 

substantial but unspecified number of 

the clauses reviewed in 1980 by BLS 

limited the amount of paid time 

available (Id., at 7–9). The BLS Study, 

however, does not discuss provisions 

representative of such limitations or 

otherwise indicate typical limits on the 

amount of time allowed for these 

purposes. As there was no information 

in the study or from commenters 

pertaining to the average amount of time 

that an individual would be engaged in 

union-leave or no-docking activity, the 

Department has no benchmark to gauge 

the number of filers that will submit 

reports under today’s rule, i.e., those 

who receive employer compensation for 

more than 250 hours of union activity 

under a collective bargaining agreement 

or who receive compensation, in any 

amount, for such activity, where it is not 

authorized by such agreement. It is the 

Department’s belief that with this 

reporting threshold only a small fraction 

of union officials receiving such 

payments will have to file reports. Such 

officials likely will be serving in local or 

intermediate union positions; again, 

however, the Department lacks data to 

predict a percentage of such officials 

that receive such compensation or the 

smaller number that will receive 

compensation in excess of 250 hours. 

Similarly, as discussed in the 

preamble, union members who receive 

payments from an employer for work 

performed on behalf of the union will 

now be considered union employees for 

Form LM–30 reporting purposes. A 

federation of labor organizations 

submitted that 100,000 union stewards 

out of 5.5 million members belonging to 

affiliated unions currently receive 

union-leave or no-docking payments. 

This comment appears to have 

overstated the number of affected 

stewards as it included unions 

representing state and local government 

employees that are not subject to the 

LMRDA. Another federation of labor 

organizations, while not directly 

commenting on the potential universe of 

filers, stated that this provision could 

result in ‘‘tens of thousands’’ of reports. 

Further, while both federations submit 

that there are many stewards who 

receive payments for union activity, the 

Department is unable to deduce from 

these comments how many stewards 

would already be subject to Form LM–

30 reporting requirements because they 

currently meet the definition of union 

officer or employee. Therefore, the 

Department is unable to use information 

provided in these comments to derive 

an estimate of the number of individuals 

who will now be union employees 

because they receive union-leave or nodocking payments, much less how many 

of these payments are made outside of 

a collective bargaining agreement or 

total more than 250 hours per year. 

As discussed in the preamble, certain 

exceptions are no longer applicable to 

all provisions of the revised Form LM–

30; specifically, the ‘‘bona fide 

employee’’ exception for reports due 

under section 202(a)(2) and the 

‘‘employee discount-regular course of 

business’’ exception for reports due 

under sections 202(a)(1) and (2). Based 

on the low number of comments 

received on the removal of these 

exceptions, which are addressed above, 

and the absence of any comments 

estimating the number of reports this 

change would result in, the Department 

does not foresee a substantial increase 

resulting from the removal of these 

exceptions. As explained in the 

preamble, sales and purchases of 

ownership interest in the employer, in 

particular, are unlikely to constitute 

payments received as a bona fide 

employee and thus the exception in the 

current form for reports filed under 

section 202(a)(1) is all but superfluous 

in the context of ownership interests. 

See Section II. D.2. Bona fide employees 

typically do not routinely engage in 

transactions involving holdings or loans 

that could be characterized as a 

payment or benefit received as a bona 

fide employee of the employer, and, as 

a result, the filing burden will not be 

onerous. The lack of comments 

objecting to this change seems to 

support these points. 

Similarly, only three comments were 

received on the proposed removal of the 

‘‘employee discount-regular course of 

business’’ exception, for reports due 

under sections 202(a)(1) and (2), one of 

which was supportive of the removal. 

As discussed earlier in the preamble, 

section 202(a)(5) of the LMRDA requires 

union officers and employees to report 

any ‘‘business transaction or 

arrangement’’ with an employer whose 

employees the union represents or is 

actively seeking to represent. This 

section exempts from reporting two 

categories of transactions and 

arrangements: (1) Payments and benefits 

received as a bona fide employee of an 

employer whose employees are 

represented by the official’s union or the 

union actively seeks to represent; and 

(2) ‘‘purchases and sales of goods or 

services in the regular course of 

business at prices generally available to 

any employee of such employer.’’ The 

current instructions apply this 

‘‘employee discount—regular course of 

business’’ exception to the requirement 

that union officers and employees report 

(1) Holdings, (2) transactions in 

holdings, (3) loans, and (4) income or 


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3These figures assume that a filer will choose to 

use an electronic form, which provides greater 

efficiency than completion by hand. The 

Department estimates that a filer who chooses to 

file by hand will need about ten additional minutes 

to complete the form. 

any other benefit with monetary value 

(including reimbursed expenses). In so 

doing, the instructions exempt from 

reporting certain matters that otherwise 

would be reported under section 

202(a)(1) or 202(a)(2). These sections do 

not contain this ‘‘regular course of 

business’’ exception, but the prior 

instructions made it applicable. Again, 

given the lack of comments regarding 

these changes, the Department 

anticipates only a slight increase in the 

number of reports received as a result of 

this revision. 

In summary, as discussed previously, 

in the NPRM the Department estimated 

a then current filing rate of .03% based 

on the receipt of 61 Form LM–30 reports 

(the average for fiscal years 2001 to 

2004) per 204,634 union officers and 

employees. Due to the proposed reforms 

as well as increased compliance 

assistance and enforcement initiatives, 

the Department estimated that the filing 

rate would increase to approximately 

1%, or 2,046 reports filed annually. 

Subsequent to the NPRM, the 

Department engaged in increased 

compliance assistance and enforcement, 

and the number of valid reports 

received in fiscal year 2006 reached 

3,466. This results in an estimated 

current filing rate of 1.69% (3,466 / 

204,634 × 100 = 1.69%). 

Taking the concerns of commenters 

into account in regard to the 

implementation of substantive reporting 

requirements which were not previously 

applicable, specifically union-leave/nodocking, expanded obligations for 

intermediate officers, removal of the two 

administrative exceptions, reporting by 

union stewards paid by employers for 

union work, and considering trusts, 

labor organizations, and other groups as 

employers in certain circumstances, the 

Department estimates that the Form 

LM–30 filing rate will increase to as 

much as 3.38%, or 6,916 reports filed 

annually, double the current filing rate. 

It is worth noting that the 

implementation of the $20 tiered de 

minimis threshold, under which no 

transaction, including aggregated 

transactions (subject only to the 

exception for a tacit or express 

agreement for the transfer of money, as 

discussed in section II.C of the 

preamble), militates against an even 

higher estimated number of overall 

filers. 

Review of Public Comments 

Regarding the Hour and Cost Burden 

Estimates for the Revised Form and 

Resulting Changes: 

In the NPRM, the Department 

proposed five minutes as the estimated 

amount of time for filers to report the 

employer’s or business’s name, address, 

name of contact at the employer or 

business, telephone number, Web site 

address, State of incorporation or 

registration, State business ID number, 

and whether the filer had an association 

with the business, employer, or labor 

relations consultant at the end of the 

reporting period. A number of 

commenters submitted that it would be 

especially burdensome, and possibly 

needless, to obtain the State of 

incorporation and State employer 

identification number. As such, these 

commenters suggested that the time 

allotted to gather the required 

information on an employer or business 

was insufficient. One commenter 

submitted that providing a telephone 

number and Web site address would not 

add any substantial reporting burden. 

Based on comments received on this 

issue, the Department has removed the 

requirement that filers report an 

employer’s or business’s State of 

incorporation and State employer 

identification number. With these items 

removed, there is no need to provide for 

corresponding additional recordkeeping 

and reporting time. 

One commenter submitted that 90 

minutes for completion of the Form 

LM–30 is not an accurate estimate. 

Another submitted that allowing 45 

minutes for reading the instructions is 

insufficient time as the filer must refer 

back to earlier provisions in the 

instructions and the instructions have 

increased from 9 pages to 17. While this 

commenter argued that the proposed 

burden hour estimates were too low for 

the proposed requirements, no 

alternative burden hour estimates were 

submitted for any area of the 

rulemaking. The Department has 

changed the Form LM–30 from the 

NPRM proposal to add more 

instructions to the form itself. Because 

the form itself will be clearer, the 

amount of time a filer must spend 

studying the separate instructions will 

be reduced. Prior to this final rule, Form 

LM–30 was estimated to take filers 

roughly 30 minutes while the proposed 

revised form was estimated to require 90 

minutes for completion, which is a 

300% increase in the allotted time. 

One commenter submitted that 

expanding the form to provide for six 

categories instead of three would add 

compliance burdens that are not 

accounted for in the NPRM. The 

Department has not implemented this 

proposed change; the six categories have 

been eliminated from the form itself. 

Rather, the Form LM–30 will utilize one 

schedule, Schedule 2, to detail 

‘‘interests in, payments from, loans to or 

from, and transactions or arrangements 

with an employer or business and 

payments from a labor relations 

consultant.’’ No new information is 

required as a result of the format 

change; instead of reporting information 

in one of three categories, filers will 

report the same information in one 

schedule, but with greater clarity as to 

the nature of the transaction. Therefore, 

there is no corresponding additional 

burden. 

It is also worth noting the 

implementation of the $20 tiered de 

minimis threshold, under which records 

need not be maintained for holdings or 

transactions, including aggregated 

transactions, of $20 and under. While 

this provision did not appear in the 

NPRM, commenters, as discussed above, 

nearly universally suggested that a 

tiered de minimis threshold would 

reduce the recordkeeping burden, or 

alternatively, prevent the need for 

increased recordkeeping estimates. The 

Department agrees with the latter 

opinion. 

The following table describes the 

information sought by the revised form 

and instructions and the amount of time 

estimated for completion of each item of 

information. The time estimates include 

the additional time burdens associated 

with the Department’s curtailment of 

administrative exceptions, and the 

implementation of the revised 

definitions.3


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4This estimate is for all filers, including first time 

filers and subsequent filers. While the Department 

considered reducing this estimate by about onethird for filers submitting reports in subsequent 

years following a first-time filing, the nature of 

Form LM–30 reporting militated against such a 

decision. Where the Department has previously 

made reductions for subsequent year filings, it 

generally applied to organizational reporting and 

not individual reporting. LMRDA organizational 

reporting, such as the Form LM–2 or Form LM–3, 

is a required annual event whereas an individual 

may not necessarily engage in Form LM–30 

reportable transactions on an annual basis. Where 

an organization files required annual reports, a 

certain amount of ‘‘institutional memory’’ is present 

which may not be applicable to a filer who is only 

required to file a report when certain criteria are 

met. 

5See preceding note 4. 

Burden description Time 

Maintaining and gathering records ....................................................................................................................................................... 20 minutes. 

Reading the instructions to determine whether filer must complete the form ...................................................................................... 15 minutes.4

Additional reading of the instructions to determine how to complete the form .................................................................................... 40 minutes.5

Reporting filer’s file number in Item 1 ................................................................................................................................................... 30 seconds. 

Reporting filer’s fiscal year in Item 2 .................................................................................................................................................... 30 seconds. 

Reporting filer’s name, address, and contact information in Item 3 (A–I) ............................................................................................ 2 minutes. 

Reporting name, file number, and address of filer’s union or unions as well as filer’s current position in the union in Item 4 (A–H) 2 minutes. 

Adding the total value of all assets and the value of all income or other payments in all Schedules 2 (as described below) and 

reporting the two totals in Item 5, Summary.

2 minutes. 

Indicating whether there was a reportable involvement with an employer or labor relations consultant during the fiscal year, and 

if so, recording the number of employer(s) and consultant(s), in Item 6.

2 minutes. 

Indicating whether there was a reportable involvement with a business during the fiscal year, and if so, recording the number of 

businesses in Item 7.

2 minutes. 

Reporting name and address of the employer or business which the filer received a payment from or held an interest in, providing the contact name, telephone number, Web site address, and whether filer has an association with the business, employer, or labor relations consultant at the end of the reporting period in Schedule 1.5 minutes. 

Reporting the nature and value of interests in, payments from, loans to or from, and transactions with an employer or business 

and payments from a labor relations consultant (includes date, whether the party to the transaction is a union officer or employee or spouse or minor child thereof, and a description and value of the interest or payment) in Schedule 2.

5 minutes. 

Completing either Schedule 3 if an employer or labor relations consultant is reported in Schedule 1, providing details of the employer’s relationship with the filer’s labor union; or Schedule 4 if a business is reported in Schedule 1, providing details regarding the entity the business dealt with (union, trust, or employer) and a description of those dealings.8 minutes. 

Filer’s signature, date and telephone number in Item 8 ....................................................................................................................... 1 minute. 

Checking responses .............................................................................................................................................................................. 5 minutes. 

Total Burden Hour Estimate Per Filer .................................................................................................................................................. 120 minutes. 

The recordkeeping estimate of 20 

minutes reflects that the majority of 

financial books and records required to 

complete the report are those that filers 

would maintain in the normal course of 

conducting business, personal, and 

union affairs, and thus should only take 

five minutes to maintain and gather. 

The other 15 minutes have been 

estimated to be necessary to maintain 

and gather the books and records that 

would not ordinarily be maintained, 

including those concerning the dealings 

between a business and the filer’s 

union, a trust in which the filer’s union 

is interested, or an employer whose 

employees the union represents or is 

actively seeking to represent. The 

estimated times are for the average filer: 

the Department assumes that an 

individual who partially owns or 

receives income from a company will 

know that company’s Web address. 

Where a filer does not have a web 

address immediately accessible, the 

Department estimates that a filer will 

need to obtain this information either by 

telephone or Internet search; however if 

a union officer receives a gift like 

sporting event tickets, the gift is likely 

an effort to obtain business, therefore, 

the giver will likely make his or her 

business known to the recipient through 

a business card, e-mail, etc. 

The resulting annualized reporting 

and recordkeeping burden for all Form 

LM–30 filings is 829,920 minutes (6,916 

× 120) or 13,832 hours (829,920/60). 

While annual salary information for 

labor union officers and employees is 

available on annual financial reports 

filed with the Department (Forms LM–

2, LM–3, and LM–4), hourly rates are 

not reported. Further, officers and 

employees receiving less than $10,000 

do not appear on every form; therefore, 

only the roughest estimates could be 

made using these forms to determine the 

average hourly rate for covered officers 

and employees. Instead, the Department 

used the $22.34 mean hourly earnings of 

those engaged in white collar 

occupations as defined and published in 

the National Compensation Survey: 

Occupational Wages in the United 

States (July 2004, Bureau of Labor 

Statistics, U.S. Department of Labor, 

August 2005). Using this figure, the 

Department estimates that the annual 

reporting and recordkeeping cost 

burden for all filers will be $309,007 

(10,374 × $22.34), or $44.68 per filer 

(309,007/6,916). 

In addition, the Department estimates 

that all union officers and employees 

will spend 15 minutes reading the 

revised form and instructions to 

determine whether they are required to 

file a report and 25 minutes reviewing 

any applicable receipts and determining 

that aggregated payments from an 

employer or business did not exceed the 

$250 de minimis threshold. By 

deducting the 6,916 estimated filers 

whose preliminary review of the form 

has already been counted from the 

estimated 204,634 union officers and 

employees, 197,718 officers and 

employees remain who will review the 

form and their records but determine 

that they are not required to file a 

report. The annual reporting and 

recordkeeping hour burden for these 

officers and employees will be 

5,931,540 minutes (30 × 197,718) or 

98,859 hours (5,931,540/60). Using the 

$22.34 hourly wage, the Department 

estimates that the annual reporting and 

recordkeeping cost burden for non-filing 

union officers and employees will be 

$2,208,510 (98,859 × $22.34), or $11.17 

per non-filing union officer or employee 

($2,208,510/197,718). 

The resulting total annual reporting 

and recordkeeping hour burden for both 

filers and those who review the form 

and determine that a report need not be 

filed will be 112,691 hours (13,832 

(hours for filers) + 98,859 (hours for 

non-filers)). The total annual reporting 

and recordkeeping cost burden will be 

$2,517,517 (112.69 × $22.34). 

Federal Costs Associated with the 

Rule: 

The estimated annualized Federal 

cost of the Form LM–30 is $1,025,837. 

This represents estimated operational 

expenses such as equipment, overhead, 


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and printing as well as salaries and 

benefits for the OLMS staff in the 

National Office and field offices who are 

involved with reporting and disclosure 

activities. These estimates include time 

devoted to: (a) Receipt and processing of 

reports; (b) disclosing reports to the 

public; (c) obtaining delinquent reports; 

(d) obtaining amended reports if reports 

are determined to be deficient; (e) 

auditing reports; and (f) providing 

compliance assistance training on 

recordkeeping and reporting 

requirements. 

G. Executive Order 13045 (Protection of 

Children From Environmental Health 

Risks and Safety Risks) 

In accordance with Executive Order 

13045, the Department has evaluated 

the environmental safety and health 

effects of the final rule on children. The 

Department has determined that the 

final rule will have no effect on 

children. 

H. Executive Order 13175 (Consultation 

and Coordination With Indian Tribal 

Governments) 

The Department has reviewed this 

final rule in accordance with Executive 

Order 13175, and has determined that it 

does not have ‘‘tribal implications.’’ The 

rule does not ‘‘have substantial direct 

effects on one or more Indian tribes, on 

the relationship between the Federal 

government and Indian tribes, or on the 

distribution of power and 

responsibilities between the Federal 

government and Indian tribes.’’

I. Executive Order 12630 (Governmental 

Actions and Interference With 

Constitutionally Protected Property 

Rights) 

This final rule is not subject to 

Executive Order 12630, Governmental 

Actions and Interference with 

Constitutionally Protected Property 

Rights, because it does not involve 

implementation of a policy with takings 

implications. 

J. Executive Order 12988 (Civil Justice 

Reform) 

This regulation has been drafted and 

reviewed in accordance with Executive 

Order 12988, Civil Justice Reform, and 

will not unduly burden the Federal 

court system. The regulation has been 

written so as to minimize litigation and 

provide a clear legal standard for 

affected conduct, and has been reviewed 

carefully to eliminate drafting errors and 

ambiguities. 

K. Environmental Impact Assessment 

The Department has reviewed the 

final rule in accordance with the 

requirements of the National 

Environmental Policy Act (‘‘NEPA’’) of 

1969 (42 U.S.C. 4321 et seq.), the 

regulations of the Council on 

Environmental Quality (40 U.S.C. part 

1500), and the Department’s NEPA 

procedures (29 CFR part 11). The final 

rule will not have a significant impact 

on the quality of the human 

environment, and, thus, the Department 

has not conducted an environmental 

assessment or an environmental impact 

statement. 

L. Executive Order 13211 (Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use) 

This final rule is not subject to 

Executive Order 13211, because it will 

not have a significant adverse effect on 

the supply, distribution, or use of 

energy. 

List of Subjects in 29 CFR Part 404 

Labor union officer and employees, 

Recordkeeping and reporting. 

IV. Text of Final Rule 

■ In consideration of the foregoing, the 

Office of Labor-Management Standards, 

Employment Standards Administration, 

Department of Labor hereby amends 

part 404 of title 29 of the Code of 

Federal Regulations as set forth below. 

PART 404—LABOR ORGANIZATION 

OFFICER AND EMPLOYEE REPORTS 

■ 1. The authority citation for part 404 

is revised to read as follows: 

Authority: Secs. 202, 207, 208, 73 Stat. 

525, 529 (29 U.S.C. 432, 437, 438); 

Secretary’s Order No. 4–2001, 66 FR 29656 

(May 31, 2001). 

§ 404.1 [Amended] 

■ 2. Section 404.1 is amended by: 

■ a. Redesignating existing paragraph 

(b) as new paragraph (h) and adding the 

phrase ‘‘An officer is:’’ at the end 

thereof; 

■ b. Adding new paragraphs (h)(1) 

through (h)(4) to read as set forth below; 

■ c. Adding a new paragraph (b) to read 

as set forth below; 

■ d. Redesignating existing paragraph 

(c) as new paragraph (g) and adding the 

phrase ‘‘within the meaning of any law 

of the United States relating to the 

employment of employees’’ to the end 

of newly designated paragraph (g); 

■ e. Redesignating existing paragraph 

(d) as new paragraph (c); 

■ f. Redesignating existing paragraph (a) 

as new paragraph (d); 

■ g. Adding a new paragraph (a) to read 

as set forth below; 

■ h. Adding new paragraphs (e), (f), (i) 

and (j) to read as set forth below. 

The additions and revision read as 

follows: 

§ 404.1 Definitions. 

(a) Benefit with monetary value 

means anything of value, tangible or 

intangible, including any interest in 

personal or real property, gift, 

insurance, retirement, pension, license, 

copyright, forbearance, bequest or other 

form of inheritance, office, options, 

agreement for employment or property, 

or property of any kind. For reporting 

purposes, the following are excepted: 

pension, health, or other benefit 

payments from a trust that are provided 

pursuant to a written specific agreement 

covering such payments. 

(b) Dealing means to engage in a 

transaction (bargain, sell, purchase, 

agree, contract) or to in any way traffic 

or trade, including solicitation of 

business. 

* * * * * 

(e) Income means all income from 

whatever source derived, including, but 

not limited to, compensation for 

services, fees, commissions, wages, 

salaries, interest, rents, royalties, 

copyrights, licenses, dividends, 

annuities, honorarium, income and 

interest from insurance and endowment 

contracts, capital gains, discharge of 

indebtedness, share of partnership 

income, bequests or other forms of 

inheritance, and gifts, prizes or awards. 

(f) Labor organization means the local, 

intermediate, or national or 

international labor organization that 

employed the filer of the Form LM–30, 

or in which the filer held office, during 

the reporting period, and, in the case of 

a national or international union officer 

or an intermediate union officer, any 

subordinate labor organization of the 

officer’s labor organization. 

* * * * * 

(h) * * * 

(1) A person identified as an officer by 

the constitution and bylaws of the labor 

organization; 

(2) Any person authorized to perform 

the functions of president, vice 

president, secretary, or treasurer; 

(3) Any person who in fact has 

executive or policy-making authority or 

responsibility; and 

(4) A member of a group identified as 

an executive board or a body which is 

vested with functions normally 

performed by an executive board. 

(i) Minor child means a son, daughter, 

stepson, or stepdaughter under 21 years 

of age. 

(j) Trust in which a labor organization 

is interested means a trust or other fund 

or organization: 

(1) Which was created or established 

by a labor organization, or one or more 


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of the trustees or one or more members 

of the governing body of which is 

selected or appointed by a labor 

organization, and 

(2) A primary purpose of which is to 

provide benefits for the members of 

such labor organization or their 

beneficiaries. 

§ 404.4 [Removed and reserved] 

■ 3. Section 404.4 is removed and 

reserved. 

§ 404.7 [Amended] 

■ 4. Section 404.7 is revised to read as 

follows: 

§ 404.7 Maintenance and retention of 

records. 

Every person required to file any 

report under this part shall maintain 

records on the matters required to be 

reported which will provide in 

sufficient detail the necessary basic 

information and data from which the 

documents filed with the Office of 

Labor-Management Standards may be 

verified, explained or clarified, and 

checked for accuracy and completeness, 

and shall include vouchers, worksheets, 

receipts, financial and investment 

statements, contracts, correspondence, 

and applicable resolutions, in their 

original electronic and paper formats, 

and any electronic programs by which 

they are maintained, available for 

examination for a period of not less than 

five years after the filing of the 

documents based on the information 

which they contain. 

Signed at Washington, DC, this 22nd day 

of June, 2007. 

Victoria A. Lipnic, 

Assistant Secretary for Employment 

Standards. 

Signed at Washington, DC, this 22nd day 

of June, 2007. 

Don Todd, 

Deputy Assistant Secretary for LaborManagement Programs. 

Note: The following appendix will not 

appear in the Code of Federal Regulations: 

Appendix—Form LM–30 and 

Instructions 

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[FR Doc. 07–3155 Filed 6–29–07; 8:45 am] 

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