Labor Organization Officer and Employee Reports, 48416-48455 [2010-19250]

Agencies

• DEPARTMENT OF LABOR
• Office of Labor-Management Standards

[Federal Register Volume 75, Number 153 (Tuesday, August 10, 2010)]
[Proposed Rules]
[Pages 48416-48455]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-19250]



[[Page 48415]]

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Part II





Department of Labor





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Office of Labor-Management Standards



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29 CFR Part 404



Labor Organization Officer and Employee Reports; Proposed Rule

Federal Register / Vol. 75 , No. 153 / Tuesday, August 10, 2010 / 
Proposed Rules

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DEPARTMENT OF LABOR

Office of Labor-Management Standards

29 CFR Part 404

RIN 1215-AB74
RIN 1245-AA01


Labor Organization Officer and Employee Reports

AGENCY: Office of Labor-Management Standards, Department of Labor.

ACTION: Notice of proposed rulemaking; request for comments.

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SUMMARY: The Office of Labor-Management Standards of the Department of 
Labor (Department) is proposing to revise the Form LM-30 and its 
instructions. The Form LM-30 implements section 202 of the Labor-
Management Reporting and Disclosure Act of 1959 (LMRDA or Act), 29 
U.S.C. 432, the purpose of which is to require officers and employees 
of labor organizations to publicly disclose possible conflicts between 
their personal financial interests and their duty to the labor union 
and its members. The proposed rule would revise the Form LM-30 and its 
instructions, based on an examination of the policy and legal 
justifications for, and utility of, changes enacted in the Form LM-30 
Final Rule (2007 rule), published on July 2, 2007. 72 FR 36105. 
Following promulgation of the 2007 rule, fundamental questions remain 
regarding the complexity of the form and its instructions, as well as 
the scope and extent of the LM-30 reporting obligations. These 
questions include the coverage of union stewards and others 
representing the union in similar positions; the reporting of certain 
loans and union leave and ``no docking'' payments; the reporting of 
payments from certain trusts, unions, and employers in competition with 
employers whose employees are represented by an official's union; and 
the reporting of certain interests held and payments received by higher 
level union officials. The Department proposes revisions to the 2007 
form, its instructions, and the regulatory text concerning such 
reporting obligations. The Department invites general and specific 
comment on any aspect of this proposed rule.

DATES: Comments must be received on or before October 12, 2010.

ADDRESSES: You may submit comments, identified by RIN 1215-AB74 or RIN 
1245-AA01. (The Regulatory Information Number (RIN) identified for this 
rulemaking changed with publication of the Spring Regulatory Agenda due 
to an organizational restructuring. The old RIN (1215-AB74) was 
assigned to the Employment Standards Administration, which no longer 
exists; a new RIN (1245-AB01) has been assigned to the Office of Labor-
Management Standards.) The comments can be submitted only by the 
following methods:
    Internet: Federal eRulemaking Portal. Electronic comments may be 
submitted through https://www.regulations.gov. To locate the proposed 
rule, use the RIN numbers shown above. Follow the instructions for 
submitting comments.
    Delivery: Comments should be sent to: Denise M. Boucher, Director 
of the Office of Policy, Reports and Disclosure, Office of Labor-
Management Standards, U.S. Department of Labor, 200 Constitution 
Avenue, NW., Room N-5609, Washington, DC 20210. Because of security 
precautions the Department continues to experience delays in U.S. mail 
delivery. You should take this into consideration when preparing to 
meet the deadline for submitting comments.
    The Office of Labor-Management Standards (OLMS) recommends that you 
confirm receipt of your delivered comments by contacting (202) 693-0123 
(this is not a toll-free number). Individuals with hearing impairments 
may call (800) 877-8339 (TTY/TDD). Only those comments submitted 
through https://www.regulations.gov, hand-delivered, or mailed will be 
accepted. Comments will be available for public inspection at https://www.regulations.gov and during normal business hours at the above 
address.
    The Department will post all comments received on https://www.regulations.gov without making any change to the comments, 
including any personal information provided. The https://www.regulations.gov Web site is the Federal e-rulemaking portal and all 
comments posted there are available and accessible to the public. The 
Department cautions commenters not to include their personal 
information such as Social Security numbers, personal addresses, 
telephone numbers, and e-mail addresses in their comments as such 
submitted information will become viewable by the public via the https://www.regulations.gov Web site. It is the responsibility of the 
commenter to safeguard his or her information. Comments submitted 
through https://www.regulations.gov will not include the commenter's e-
mail address unless the commenter chooses to include that information 
as part of his or her comment.

FOR FURTHER INFORMATION CONTACT: Denise M. Boucher, Director of the 
Office of Policy, Reports and Disclosure, Office of Labor-Management 
Standards, U.S. Department of Labor, 200 Constitution Avenue, NW., Room 
N-5609, Washington, DC 20210, olms-public@dol.gov, (202) 693-0123 (this 
is not a toll-free number), (800) 877-8339 (TTY/TDD).

SUPPLEMENTARY INFORMATION:

I. Background

A. Introduction

    The proposal to revise the Form LM-30 and its instructions is part 
of the Department's continuing effort to effectively administer the 
reporting requirements of the LMRDA. The LMRDA's various reporting 
provisions are designed to empower labor organizations, their members, 
and the public by providing certain information about the finances of 
labor organizations and union officers and employees. A fair and 
transparent government regulatory regime must consider and balance the 
interests of labor organizations, their members, and the public, 
including the benefits served by disclosure, the burden placed on 
reporting entities, and preserving the independence of unions and their 
officials from unnecessary government regulation.
    The Form LM-30 implements section 202 of the LMRDA, 29 U.S.C. 432. 
Under section 202,\1\ union officers and employees are required to file 
reports if they, or their spouses or minor children, engage in certain 
transactions, or have financial holdings, which may constitute a 
conflict of interest with their union responsibilities. The Act 
requires public disclosure of certain financial interests held, 
transactions engaged in, and income received. Subject to certain 
exclusions, these interests, transactions, and incomes include:
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    \1\ Unless otherwise stated all references to statutory 
provisions, e.g., ``section 202,'' are to provisions in the LMRDA.
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    1. Payments or benefits with monetary value from, or interests in, 
an employer whose employees the filer's union represents or is actively 
seeking to represent;
    2. Transactions involving any stock, bond, security or loan to or 
from, or other interest in, an employer whose employees the filer's 
union represents or is actively seeking to represent;
    3. Business transactions or arrangements with an employer whose 
employees the filer's union represents or is actively seeking to 
represent;

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    4. Income or any other benefit with monetary value from, or other 
interest in, a business a substantial part of which consists of buying 
from, selling or leasing to, or otherwise dealing with an employer 
whose employees the filer's union represents or is actively seeking to 
represent;
    5. Income or any other benefit with monetary value from, or other 
interest in, a business any part of which consists of buying from, or 
selling or leasing directly or indirectly to, or otherwise dealing with 
the filer's union or a trust in which the filer's union is interested; 
and
    6. Payment of money or other thing of value from any employer not 
covered under the above categories, or payment of money or other thing 
of value from a person who acts as a labor relations consultant to an 
employer.
    The Form LM-30 had remained essentially unchanged from 1963 until 
2007. In 2005 the Department published a Notice of Proposed Rulemaking 
(NPRM) that proposed far-reaching changes to the form. 70 FR 51165 
(Aug. 29, 2005). After a notice and comment period, the Department 
issued the 2007 final rule. 72 FR 36105 (July 2, 2007). The 2007 rule 
brought significant changes to the LM-30 and its instructions and 
represented, in some instances, a sharp departure from the Department's 
previous interpretations of section 202. The rule completely revised 
the layout and overall structure of the Form LM-30, lengthening the 
form from two to nine pages with the creation of five schedules, 
continuation pages, and various sections consisting of instructions and 
examples. (The 2007 form and instructions are available at https://www.dol.gov/olms.) Upon review of the 2007 rule, and input from the 
regulated community, the Department believes that many of the 
objectives sought to be met by the 2007 rule--including simplification 
of the reporting requirements and adherence to the reporting scheme 
intended by Congress--were not accomplished. The 2007 rule left 
unresolved fundamental questions about the reporting obligations of 
union officials, questions raising policy and legal issues warranting 
reexamination by the Department. These fundamental questions regarding 
the Form LM-30 reporting requirements include--the coverage of stewards 
and other union representatives serving in similar positions; the 
reporting of certain loans and union leave and ``no docking'' payments; 
the reporting of payments from certain trusts and unions; the reporting 
of payments from businesses that compete with an employer whose 
employees are represented by an official's union or whose employees the 
union is actively seeking to represent; and reporting by higher level 
union officials about relationships with businesses and employers that 
pose conflicts concerning subordinate affiliates of their union. In 
addition, there are questions as to whether the layout of the 2007 Form 
LM-30 and instructions provides useful and adequate assistance to 
filers.
    As further discussed in later sections of this notice, these 
questions prompted the Department, on March 19, 2009, to issue a non-
enforcement policy regarding the 2007 Form LM-30 reporting 
requirements, allowing filers to use either the pre-2007 or 2007 Form 
LM-30 report. Further, the Department held a stakeholder meeting on 
July 21, 2009 to solicit comments regarding the 2007 Form LM-30 and 
potential revisions to the Form LM-30. The Department invites comment 
on the proposed changes with respect to their benefits, the ease or 
difficulty with which labor organization officers and employees will be 
able to comply with these changes, and whether the changes would better 
implement the LMRDA. Information about specific union provisions 
relating to conflict of interest standards for union officials is also 
invited. Interested parties and the public are invited to draw upon 
their experience with similar conflict and disclosure standards in 
other settings such as government employment, accounting, corporate 
governance, legal and judicial practice, medicine, and journalism. The 
Department invites general and specific comments on any aspect of this 
proposal; it also invites comment on specific points, as noted 
throughout the text of this notice.

B. History of the LMRDA's Reporting Requirements

    In enacting the LMRDA in 1959, a bipartisan Congress expressed the 
conclusion that in the labor and management fields ``there 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(b), 29 U.S.C. 401(b).
    The LMRDA 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. The 
LMRDA addressed various ills through a set of integrated provisions 
aimed at labor-management relations governance and management. These 
provisions include financial reporting and disclosure requirements for 
labor organizations, their officers and employees, employers, labor 
relations consultants, and surety companies. See 29 U.S.C. 431-36, 441.
    To highlight the potential conflicts of interest to which union 
officers and employees could be susceptible, the Senate Committee 
Report presented the following illumination of section 202:

    [This section] requires a union officer or employee to disclose 
any securities or other interest which he has in a business whose 
employees his labor union represents or ``seeks to represent'' in 
collective bargaining. When a prominent union official has an 
interest in the business with which the union is bargaining, he sits 
on both sides of the table. He is under temptation to negotiate a 
soft contract or to refrain from enforcing working rules so as to 
increase the company's profits. This is unfair to both union members 
and competing businesses.

Senate Report No. 187 (1959) (Senate Report) at 15, reprinted in NLRB 
Legislative History of the Labor-Management Reporting and Disclosure 
Act of 1959 (2 volumes) (Leg. History), 1 Leg. History, at 411.

    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 can be summarized 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 the 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:

    The committee bill attacks the problem [of conflicts of 
interest] by requiring union officers and employees to file reports 
with

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the Secretary of Labor disclosing to union members and the general 
public any investments or transactions in which their personal 
financial interests may conflict with their duties to the members. 
The bill requires only the disclosure of conflicts of interest as 
defined therein. The other investments of union officials and their 
other sources of income are left private because they are not 
matters of public concern. No union officer or employee is obliged 
to file a report unless he holds a questionable interest in 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.

    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 No. 741 (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'').

    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.''

House Report, at 10-11, reprinted at 1 Leg. History, at 768-69. Senate 
Report, at 14, reprinted in 1 Leg. History, at 410. See generally 
Restatement (Second) of Trusts (1959) Sec. Sec.  170, 173; Restatement 
(Second) of Agency (1958) Sec. Sec.  381, 387-98.

    The reporting provisions of the Act represent, in part, an effort 
to codify various requirements 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 Archibald Cox, Internal Affairs of 
Labor Unions Under the Labor Reform Act of 1959, 58 Mich. L. Rev. 819, 
824-29 (1960). 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 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 1407-08. See also Ethical Practices Code II: Health and 
Welfare Funds, id., 2 Leg. History, at 1406-07.

    The Act was crafted with particular regard for the unique function 
and status of labor unions. Then Senator John F. Kennedy, who was the 
chief sponsor of the Senate bill, S. 505, which served as the 
foundation for the LMRDA, stated that the legislation was ``designed to 
permit responsible unionism to operate without being undermined by 
either racketeering tactics or bureaucratic controls. It is designed to 
strike a balance between the dangers of to [sic] much and too little 
legislation in this field.'' 105 Cong. Rec. S816 (daily ed. Jan. 20, 
1959), reprinted in 1 Leg. History, at 969.
    As noted by Senator Kennedy above, a balance of these interests was 
central to the bipartisan enactment of the LMRDA. Congress sought to 
address legitimate concerns about illegal and undemocratic behaviors 
without permitting that concern to be used as an excuse for undermining 
organized labor. Further, Congress sought to address the importance of 
balancing necessary disclosure and regulation with undue intrusion on 
union operations and the protection of union officer's privacy 
interests. As stated in the Senate Report, ``[t]he committee recognized 
the desirability of minimum interference by Government in the internal 
affairs of any private organization * * * in establishing and enforcing 
statutory standards great care should be taken not to undermine union 
self-government or weaken unions in their role as collective-bargaining 
agents.'' Senate Report, at p. 7, reprinted in 2 Leg. History, at 403. 
Professor Archibald Cox played a pivotal role in drafting the 
legislation that ultimately became the LMRDA. His testimony before the 
Senate subcommittee that was considering this legislation presaged the 
language in the Senate Report, describing the reporting obligation as a 
limited one. He testified: ``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.'' Hearings on S. 505 before the Subcommittee on Labor 
of the Senate Committee on Labor and Public Welfare (1959) (Senate 
Hearings), at 123; see Senate Report, at 15, reprinted in 1 Leg. 
History, at 411. Professor Cox additionally noted that because the 
reporting requirements were based, in part, upon the Ethical Practices 
Code formulated by the AFL-CIO, union officials who adhered to this 
code would have ``virtually nothing to disclose in his report to the 
public.'' Senate Hearings, at 123.

C. Statutory Language

    Section 202 provides in its entirety:
    SEC. 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--

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    (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. 29 
U.S.C. 432.

D. Rationale for Proposing Rulemaking on Form LM-30

    The Department is proposing modifications to the Form LM-30 for the 
following reasons:
    (1) The 2007 Form LM-30 rule continues to create uncertainty for 
the regulated community, which continues to have questions regarding 
the rule's reporting requirements and has raised strong objections to 
key aspects of the rule, such as the reporting of certain loans, 
including mortgages and student loans, the reporting of union leave and 
``no docking'' payments (i.e., payments made by a represented employer 
to employees engaged in union representational or other activities), 
and reporting by individuals serving as union stewards or in similar 
positions representing the union.
    (2) Upon review, we now believe that the revisions we are proposing 
better balance the disclosure of information and the burden imposed on 
union officials.
    (3) Upon review, we now believe that the revisions we are proposing 
better clarify the form and instructions, and organize the information 
in a useful format.
    The Department fully recognizes and supports the importance of 
union officer and employee reporting and the disclosure of pertinent 
financial information to union members and the public. However, the 
LMRDA requires a balancing of transparency with the need to maintain 
union autonomy and to avoid overburdening unions and their officials 
with unnecessary reporting requirements. Because the 2007 rule did not 
adequately consider this balance, it did not succeed in properly 
implementing the LMRDA.
    Following promulgation of the 2007 Form LM-30, the Department 
received numerous comments from the regulated public regarding the 
difficulty entailed in reading and understanding the 2007 form and 
instructions. Many commenters asserted that the 2007 rule was legally 
flawed and some aspects of the rule have been challenged in a lawsuit, 
AFL-CIO v. Chao, No. 1:08-cv-0069 (CKK) (D.D.C.) (stayed on March 26, 
2009). In the Department's view, the following issues warranted 
particular attention: the reporting of union leave and ``no docking'' 
payments, the coverage of union stewards as officials required to file 
the Form LM-30, and the reporting of loans. In an effort to clarify the 
reporting requirements associated with the 2007 Form LM-30, the 
Department created a Frequently Asked Questions (FAQs) section on its 
Web site (https://www.dol.gov/olms/regs/compliance/RevisedLM30_FAQ.htm). The confusion about the new reporting requirements also 
prompted the Department to issue written guidance on its Web site, on 
March 19, 2009, announcing a non-enforcement policy under which it will 
accept either the pre-2007 Form LM-30 or the 2007 Form LM-30 (https://www.dol.gov/olms/regs/compliance/GPEA_Forms/blanklmforms.htm). The 
Department there announced its intention to revise the Form LM-30 in 
order to review questions of policy and law surrounding these reporting 
requirements. The Department explained that the 2007 rule left 
unanswered fundamental questions regarding the scope and extent of the 
reporting obligations and that litigation challenging some aspects of 
the form remained pending. Given these considerations, the Department 
determined that it would not be a good use of resources to bring 
enforcement actions based upon a failure to use a specific form to 
comply with the statutory reporting obligation. Accordingly, the 
Department has refrained from initiating enforcement actions against 
union officers and union employees based solely on the failure to file 
the report prescribed by the 2007 rule, as long as individuals meet 
their statutorily-required filing obligation in some manner. This non-
enforcement posture remains in effect.
    On July 21, 2009, OLMS held a stakeholder meeting to solicit 
comments regarding the 2007 rule. OLMS received a number of comments on 
several significant issues. These comments included the following --
     The Department should revert to the old (pre-2007) Form 
LM-30 and instructions because they were less confusing than the new 
(2007) form and instructions, which are ``overwhelmingly complicated.''
     The current interpretations of ``labor organization 
employee'' and the ``bona fide employee exception,'' which require 
reporting by union stewards and others of ``no docking'' and union 
leave payments, are beyond the Department's

[[Page 48420]]

statutory authority, are overly burdensome, and capture transactions 
that do not pose conflicts of interest; they also discourage union 
members from serving as union stewards.
     The reporting of bona fide loans is not beneficial to the 
public and requiring the reporting of home mortgages is invasive.
     While the reporting of extra-market loans from businesses 
is defensible, the reporting of market-term loans is unreasonable and 
overbearing.
     The Department should not have required union officials to 
report payments and interests from employers or businesses with 
relationships to other levels of the union hierarchy other than the 
official's own. If there is any ``look down'' reporting, it should be 
restricted to officials with oversight authority.
     The Department should retain the $250 de minimis threshold 
for reporting, as well as the related $20 threshold for recordkeeping 
and the ``widely-attended gathering'' exception.
     The Department should not have required officials to 
report payments by trusts, unions, and others; reports should have been 
limited to payments by entities that are organizing targets of the 
official's union.
    The Department has considered the comments received at the 
stakeholder meeting in reviewing the 2007 rule and proposing changes to 
that rule.

II. Authority

A. Legal Authority

    The legal authority for the notice of proposed rulemaking is set 
forth in sections 202 and 208 of the LMRDA, 29 U.S.C. 432, 438. Section 
208 of the LMRDA provides that the Secretary of Labor shall have 
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. 29 U.S.C. 438.

B. Departmental Authorization

    Secretary's Order 08-2009, issued November 6, 2009, contains the 
delegation of authority and assignment of responsibility for the 
Secretary's functions under the LMRDA to the Director of the Office of 
Labor-Management Standards and permits re-delegation of such authority. 
See 74 FR 58835 (Nov. 13, 2009).

III. Reasons for Proposed Revisions to the 2007 Form LM-30 Reporting 
Requirements

    The Department proposes changes to five areas of the Form LM-30 
reporting requirements: (1) The reporting of union leave and ``no 
docking'' payments, and, more broadly, the bona fide employee 
exception; (2) the coverage of individuals serving as union stewards or 
in similar positions representing the union, such as a member of a 
safety committee or a bargaining committee; (3) the reporting of bona 
fide loans; (4) the reporting of payments from employers competitive to 
the represented employer, certain trusts, and unions; and (5) the 
reporting by national, international, and intermediate union officers 
and employees.
    First, the Department proposes to return to the historical practice 
whereby union officers and employees were not required to report 
compensation they received under union leave and ``no docking'' 
policies established under collective bargaining agreements or by 
custom and practice of the workplace. The requirement in the 2007 rule 
that union officials must report ``no docking'' and union leave 
payments has been strongly criticized as unduly burdensome. The 
Department agrees that this reporting requirement imposes undue burden 
and may impede individuals from running for union office and otherwise 
serving in important union roles. The 2007 rule was based on the 
premise that such payments are for work performed on the union's 
behalf, rather than the employer's, and thus not payments made under 
the ``bona fide employee'' exception of section 202 of the LMRDA. The 
Department now believes that the term ``bona fide employee,'' as used 
in that section, is most naturally read to distinguish between, on the 
one hand, payments that are made to a union official by virtue of his 
or her employment by the company making the payment, and, on the other 
hand, payments that are made to union officials without regard to such 
employment. This interpretation better accords with the purposes of the 
statute than the interpretation embodied in the 2007 rule that focuses 
on whether the union or the employer making the payment exercises 
primary control over an individual's discrete, temporal activities as a 
union official.
    Second, the Department proposes to return to the historical 
practice of excluding union stewards and similar union representatives 
from Form LM-30 reporting. The Department believes that this practice 
comports with the language of section 202 and better effectuates labor-
management relations than the interpretation embodied in the 2007 rule.
    Third, the Department also proposes an administrative exemption 
whereby union officials generally need only report loans from bona fide 
credit institutions if the terms of such loans are on terms more 
favorable than those available to the public. The 2007 rule required 
more extensive reporting and made distinctions among various 
relationships and credit institutions that were difficult to understand 
and apply. The proposed rule also incorporates the Department's 
clarification, as set forth in Frequently Asked Questions (FAQs), that 
union officials as a general rule are not required to report on savings 
accounts, CD, credit cards, etc. where such instruments contain the 
same terms offered to other customers without regard to an individual's 
status as a union official.
    Fourth, the Department also proposes to limit the reporting 
obligation with respect to interests in and payments from employers 
that compete against employers represented by the official's union or 
that the union actively seeks to represent. It is the Department's view 
that disclosure of such payments is important, but only where an 
official is involved with the organizing, collective bargaining, or 
contract administration activities related to a particular represented 
employer or possesses significant authority or influence over such 
activities. This ensures that meaningful information will be provided 
to union members without imposing undue burden on officials who do not 
occupy positions of influence over the union's organizing, collective 
bargaining, or contract administration activities related to the 
represented employer. Similarly, the Department proposes to modify the 
scope of reporting insofar as payments from certain trusts and unions 
are concerned. The Department proposes to return to its historical 
practice of not requiring officials to report on payments they receive 
from trusts or, as a general rule, from unions. The Department, 
however, will continue to require officials of a staff union to report 
any payments they receive from the union-employer whose employees the 
staff union represents.
    Finally, the Department is proposing to revise and clarify the 
scope of reporting for officials of international, national, and 
intermediate unions. The proposed rule states that officers and 
employees of these higher level unions must look at payments they 
receive from employers and businesses with

[[Page 48421]]

relationships with lower levels of the official's union (e.g., a local 
or other subordinate body), as well as with the official's own level of 
the union, when applying the Form LM-30 reporting requirements. The 
2007 rule excepted employees, as distinct from officers, from this 
``top-down'' reporting obligation. In the Department's view, the LMRDA 
does not support that distinction for LM-30 reporting purposes. 
Officers and employees of the union are held to the same reporting 
obligations under the Act. The 2007 rule also established confusing 
exceptions to the ``top-down'' reporting obligations for officers. 
Payments from businesses that dealt with represented employers were 
exempt, while the instructions did not specify the reportability of 
payments from businesses that dealt with lower level unions. Further, 
union officers were not required to report any payments or other 
financial benefits received by their spouses and minor children from 
employers and businesses involved with a lower level union. The 
Department is proposing to remove these exceptions.
    In developing the proposed changes, the Department has reviewed the 
reporting examples utilized in the 2007 rule and the substantial 
guidance issued after the rule's publication as answers to FAQs in 
order to identify the extent to which, if at all, reporting will be 
changed under the Department's proposals if adopted in a final rule. A 
final rule will supersede any inconsistent interpretation or other 
guidance. The Department identifies in the margin those instances where 
the proposed rule, if adopted, would not change the reporting 
obligations under the examples and FAQs.\2\ As discussed later in the 
text, examples will generally not be included in the proposed 
instructions.
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    \2\ Most of the examples in the 2007 instructions will continue 
to accurately reflect reporting requirements if the Department's 
proposal is adopted in a final rule. Thus, the following will 
continue to accurately reflect reporting requirements: examples 2-
15, at pp. 3-4 of the instructions; examples 1-5, at p. 6 of the 
instructions; examples 1 and 2, at p. 7 of the instructions; and 
examples 1, 3-15, and 17, at pp. 8-9 of the instructions. Several of 
the FAQs are based on requirements that the Department proposes to 
change. The following FAQs, however, will continue to accurately 
reflect reporting requirements if the Department's proposal is 
adopted in a final rule: 2-10, 12-26, 28, 30-37, 39, 44, 47, 49-50, 
54, 56-69, 72-76, and 79-88. It should be noted, however, that some 
of the comments and FAQs, such as FAQs 49 and 73, while remaining 
accurate, were intended to illustrate issues that are less likely to 
arise under the proposed rule. Others, such as FAQs 1 and 77, while 
largely accurate, contain some statements that are based on or refer 
to interpretations that will be superseded if the Department's 
proposal is adopted in a final rule.
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A. The Bona Fide Employee Reporting Exception Under Section 202

    Sections 202(a)(1) and (5) of the LMRDA require a labor 
organization officer or employee to report payments that the official, 
his or her spouse, or minor children receive from an employer whose 
employees the labor organization represents or is actively seeking to 
represent, ``except payments and other benefits received as a bona fide 
employee of such employer.'' 29 U.S.C. 432(a)(1) & (5) (Emphasis 
added).
    The 2007 revisions to the Form LM-30 narrowed the Department's 
longstanding reading of this ``bona fide employee'' exception, 
significantly extending the reporting requirements of section 202 
beyond union officers and employees to union stewards and others. The 
2007 rule required them to report compensation paid to them by their 
employers for time spent representing the union on labor-management 
relations matters in accordance with a union leave or ``no docking'' 
policy. Under a union leave policy, the employer continues the pay and 
benefits of an individual who works full time on such matters. Under a 
``no docking'' policy, the employer permits individuals to devote 
portions of their work day or work week to labor-management relations 
business, such as processing grievances, with no loss of pay.
    Until regulatory changes to the Form LM-30 were adopted in 2007, 
the Department's policy, as established in 1963 to implement Form LM-30 
reporting (28 FR 14384 (Dec. 27, 1963)), excepted from reporting 
payments and other benefits received for certain activities other than 
productive work directed by the employer making the payment. 
Specifically, the instructions to the 1963 Form LM-30 stated that the 
following payments and benefits were exempt from Form LM-30 reporting:

    [p]ayments and benefits received as a bona fide employee of the 
employer for past or present services, including wages, payments or 
benefits received under a bona fide health, welfare, pension, 
vacation, training or other benefit plan; and payments for periods 
in which such employee engaged in activities other than productive 
work, if the payments for such period of time are: (a) Required by 
law or a bona-fide collective bargaining agreement, or (b) made 
pursuant to a custom or practice under such collective bargaining 
agreement, or (c) made pursuant to a policy, custom or practice 
which the employer has adopted without regard to any holding by such 
employee of a position with a labor organization.

Pre-2007 Form LM-30 Instructions, Part A (Items 6 and 7) at (iv).

    Thus, before the 2007 rule, persons receiving payments for service 
under a union leave or ``no docking'' policy were not required to 
report such payments. For example, where a union officer was excused 
from his regular work to handle grievances and was paid his regular 
wages while doing so, the payments were exempted from reporting. 
Similarly, union officers or employees who continued to participate in 
employer group insurance and pension plans while they served the union 
were not required to report such benefits. The Department explained the 
basis of the policy in the LMRDA Interpretive Manual: ``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 Interpretative Manual, section 248.005. This 
reporting exception was based on the presumption that union leave and 
``no docking'' arrangements operating either pursuant to a collective 
bargaining agreement or in accordance with custom or practice are 
ordinary and transparent, not requiring their reporting under section 
202.
    Based largely on the policy choice, evident in the 2007 rule, to 
promote fuller disclosure to union members and the public, even where 
there might be considerable burden associated with such reporting, the 
Department determined to require union officials, including stewards, 
to report ``no docking'' and union leave payments. As stated in the 
preamble to the rule:

    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.

72 FR at 36109. To achieve this result, the Department utilized a new 
definition of ``bona fide employee,'' a term not defined in the pre-
2007 Form LM-30 or its instructions. This new definition is 
incorporated in the 2007 Form LM-30 Instructions (Definition D4, page 
10).\3\ 72 FR at 36125.
---------------------------------------------------------------------------

    \3\ The instructions provide:
    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 ``union-leave,'' 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 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.

---------------------------------------------------------------------------

[[Page 48422]]

    The Department justified this new reporting requirement upon its 
reading of section 202(a)(1). 72 FR at 36126. This section establishes 
a general obligation to report payments received by a union officer or 
employee whose employees are represented by the official's union or the 
union actively seeks to represent. This section, however, also excepts 
from this requirement ``payments received as a bona fide employee of 
such employer.'' In the 2007 rule, the Department interpreted this 
exception to apply only where the payment was made for time expended 
solely on the employer's behalf. 72 FR at 36109, 36124, 36126. Thus, 
under the reasoning of the 2007 rule, where a union official serving as 
an officer or as a steward was performing work on behalf of the union, 
he or she was not being paid for services rendered as a ``bona fide 
employee'' of the employer making the payment. Because the individual 
was acting on behalf of the union and thus subject to its control while 
performing these union-related activities, the Department reasoned that 
the official was not a bona fide employee of the employer during the 
time for which such remuneration was paid. See 72 FR at 36126; see also 
70 FR at 51183 (proposed rule).
    The Department proposes to return to its longstanding 
interpretation of the ``bona fide employee'' reporting exception. Under 
this prior interpretation, payments made by an employer under a union 
leave or ``no docking'' policy to a union official are payments 
received as a ``bona fide employee'' of the employer and, as such, not 
required to be reported on Form LM-30. We are proposing this change for 
several reasons. First, the approach taken in the 2007 rule does not 
comport with what the Department considers to be the best reading of 
the language of section 202. Second, it creates substantial burden for 
union officials on matters unlikely to pose conflicts of interest, thus 
unduly interfering with the internal workings of labor unions and 
labor-management relations. Third, as a matter of policy, there is no 
persuasive reason why union officials must report such payments, while 
employers making such payments are under no similar obligation.
    Section 202 applies to ``every officer * * * and every employee of 
a labor organization,'' requiring as a general rule the reporting of 
any payments received from a represented employer ``except payments and 
other benefits received as a bona fide employee of such employer,'' 
emphasis added. An individual's status as an employee is based on the 
various factors articulated in the common law. See Nationwide Mutual 
Ins. v. Darden, 503 U.S. 318 (1992). ``Bona fide'' is synonymous with 
``good faith'' or ``genuine,'' i.e., without fraud or deceit.\4\ Thus, 
section 202(a)(1) is most naturally read to except from reporting 
payments to a current or former employee of the company making the 
payment unless made under the guise of employment, such as where 
payment was for a no show job with the company, in an amount that 
unreasonably exceeds the value or amount of the work performed, or the 
payment is made on terms inconsistent with the parties' negotiated 
agreement or the workplace custom and practice. Where a payment made to 
an individual working on behalf of the union by his current or past 
employer is sanctioned by a collective bargaining agreement or custom 
or practice of the workplace, the legitimacy or ``bona fides'' of the 
payment is established.
---------------------------------------------------------------------------

    \4\ See Black's Law Dictionary (8th ed. 2004), which defines the 
term as: ``1. Made in good faith; without fraud or deceit. 2. 
sincere; genuine''; The Random House Dictionary of the English 
Language, Unabridged (2d ed. 1987), which defines the term as: ``1. 
made, presented, etc. in good faith; without deception or fraud. * * 
* 2. genuine.--syn. 1. honest, sincere, lawful, legal. 2. genuine.--
ant. spurious, deceitful, false.'' See also Black's ``bona fide 
operation,'' defined as ``[a] real, ongoing business''; and ``bona 
fides,'' defined as ``1. Good faith. 2. Roman law. The standard of 
conduct expected of a reasonable person, esp. in making contracts 
ands similar actions; acting without fraudulent intent or malice.''
---------------------------------------------------------------------------

    Further, as noted in the 2007 rule, union leave and ``no docking'' 
payments were common at the time the LMRDA was enacted. 72 FR at 36126. 
Yet, the Department is unaware of any concerns about conflicts of 
interest presented by such payments, unlike other payments such as for 
no show work, featherbedding, or similar practices, raised in the 
hearings before the McClellan Committee or in any of the legislative 
materials relating to the LMRDA. As noted in the 2007 rule, the 
legislative history does not shed light on whether Congress had a 
specific intention to require or not the reporting of such payments by 
union officials. See 72 FR at 36126. While, as noted in the 2007 rule, 
legislative silence is not generally a conclusive guide to interpreting 
statutory text, it is notable that Congress did not identify union 
leave or ``no docking'' payments as requiring disclosure to union 
members and the public as a matter of course. See 72 FR at 36126. 
Equally significant, such payments were not in any way proscribed by 
the AFL-CIO codes of ethics that strongly influenced the reporting 
provisions of the LMRDA. See 72 FR at 36112-13. Employers have 
historically agreed to compensate stewards, safety and health committee 
representatives and others for such work because they see it as adding 
value to their organization. A number of States such as Oregon and 
Washington require the establishment of joint labor-management safety 
and health committees. See https://www.cbs.state.or.us/external/osha/pdf/rules/division_1/437-001-0765.pdf; https://www.lni.wa.gov/wisha/rules/corerules/HTML/296-800-130.htm. See also Emily A. Spieler, 
Perpetuating Risk? Workers' Compensation and the Persistence of 
Occupational Injuries, 31 Hous. L. Rev. 119, n. 505, 514, 518, 520 
(1994) (identifying States requiring such committees). Having employees 
serve on employee assistance programs and wellness committees is also 
seen as a cost effective business decision by many employers. See 
Edward Cohen-Rosenthal and Cynthia E. Burton, Mutual Gains: A Guide to 
Union-Management Cooperation 80-83 (1993) (Mutual Gains).
    Moreover, such payments, where established by a collective 
bargaining agreement or custom or practice of the workplace, do not 
present the sort of conflict of interests presented by other payments 
to union officers and employees. Rather, they serve the mutual goals of 
employers and unions. They help ensure that individuals with first-hand 
knowledge of an employer's workplace will be able to take a position 
with the union, a benefit not only to the union and employer but also 
the represented employees. Such payments are voluntary; without the 
assent of both

[[Page 48423]]

management and labor, the payments cannot be made. They are not kept 
secret from employees; they must be in writing or reflect the custom 
and practices in the workplace. Additionally, these payments are 
usually made under the terms of a collective bargaining agreement and 
tied to the same rate of pay that the union official would have 
received under the agreement for time worked at his or her trade. 
Further, a potential consequence of requiring the reporting of payments 
received under union leave or ``no docking'' policies is that union 
members will be discouraged from running for union office and others 
from serving as stewards or in other voluntary positions--an 
unnecessary yet significant increase in burden. As a matter of policy, 
the Department believes that its historical position to except union 
leave and ``no docking'' payments from reporting promotes the purposes 
of the LMRDA and is consistent with the Congressional plan that the 
government avoid unnecessary intrusion into internal union affairs. Cf. 
Wirtz v. Local 153, Glass Bottle Blowers Assn., 389 U.S. 463, 470-71 
(1968).
    Finally, the Department proposes to modify the interpretation of 
``bona fide employee'' with respect to its application to union leave 
and ``no docking'' payments because it creates a significant 
inconsistency between the application of reporting exceptions and the 
reporting burden on union officers and employees compared with the 
corresponding exceptions and burden on employers through the Form LM-
10, which effectuates the reporting requirements under section 203.
    Section 203(a)(1) requires the reporting of certain payments, 
transactions, arrangements, and agreements with officers, agents, shop 
stewards, other representatives, and employees of labor organizations. 
This section exempts from employer reporting, ``payments of the kind 
referred to in section 302(c) of the Labor Management Relations Act 
[LMRA],'' which includes any payment of money or other thing of value 
from an employer to, ``any representative of his employees, or to any 
officer or employee of a labor organization, who is also an employee or 
former employee of such employer, as compensation for, or by reason of, 
his service as an employee of such employer.'' LMRA Section 302(c)(1), 
29 U.S.C. 186(c)(1).
    Courts have held that ``no docking'' and union leave payments meet 
the requirements of the section 302(c)(1) exemption.\5\ Thus, the 
Department has historically exempted such payments from Form LM-10 
reporting. See Exception (c) to Item 8.a. of the Form LM-10 
Instructions; LMRDA Interpretative Manual, at sections 253.305, 
253.320, 253.321, 253.322, and 253.323. The 2007 rule requires union 
officials to report union leave and ``no docking'' payments on the Form 
LM-30, but employers are not similarly required to report such payments 
to their employees on a corresponding Form LM-10 report. The Department 
has reexamined the policy underlying the current requirement and has 
concluded it is unreasonable to impose these reporting requirements on 
union officers and employees, while employers, due to a statutory 
exemption (by reference to LMRA section 302), are not required to 
report such payments on the Form LM-10.\6\
---------------------------------------------------------------------------

    \5\ See Caterpillar v. UAW, 107 F.3d 1052, 1055 (3d Cir. 1997), 
citing NLRB v. BASF Wyandotte Corp., 798 F.2d 849, 854-56 (5th Cir. 
1986); BASF Wyandotte Corp. v. Local 227, 791 F.2d 1046 (2d Cir. 
1986); Herrera v. International Union, UAW, 73 F.3d 1056 (10th Cir. 
1996), aff'g 858 F.Supp. 1529, 1546 (D. Kan. 1994); Communications 
Workers v. Bell Atlantic Network Servs., Inc., 670 F.Supp. 416, 423-
24 (D.D.C. 1987); Employees' Independent Union v. Wyman Gordon Co., 
314 F.Supp. 458, 461 (N.D. Ill. 1970).
    \6\ See LMRDA Interpretative Manual, at section 241.600. This 
section states that the reporting exceptions in section 203 do not 
affect the reporting by union officers and employees in section 202, 
``where the applicable provision of section 202 does not provide a 
pertinent exception.'' (Emphasis added.) Section 202, however, 
contains a pertinent exception: the bona fide employee exception, 
which, as noted in the text, has historically been interpreted as 
applying the regular wage exception of LMRA section 302(c) to 
various subsections of section 202. See LMRDA Interpretative Manual, 
section 248.005.
---------------------------------------------------------------------------

    For the foregoing reasons, the Department proposes to rescind the 
2007 requirement to report union leave and ``no docking'' payments on 
the Form LM-30 and invites comment on this proposal.

B. Form LM-30 Reporting by Union Stewards

    The 2007 rule extended the union officer and employee reporting 
obligation to union stewards, treating them as employees of the union 
by virtue of their receipt of ``no docking,'' union leave, or ``lost 
time'' payments. The Department now proposes to return to its 
longstanding position that union stewards are not covered by the Form 
LM-30 reporting requirements. The Department articulated this position 
in the Form LM-30 instructions issued in 1963, and this position had 
remained essentially unchanged for over 40 years. The 1963 regulation, 
28 FR 14384 (Dec. 27, 1963), establishing the pre-2007 form and 
instructions did not anywhere suggest that union stewards were union 
employees.\7\ See pre-2007 Form LM-30 Instructions.
---------------------------------------------------------------------------

    \7\ In the unusual situations where the position of steward is a 
constitutional office in the union, or an individual, although 
serving as a steward, is an employee of the union under 
circumstances distinct from his or her status as steward, or is an 
employee of the union because the steward position is a paid union 
position, such individuals, both historically and under the 
Department's proposal, are subject to the reporting requirements of 
the Form LM-30.
---------------------------------------------------------------------------

    In extending the union officer and employee reporting obligation to 
union stewards in the 2007 rule, the Department determined that a union 
steward receiving ``no docking,'' union leave or ``lost time'' payments 
would be considered to be a labor organization employee within the 
meaning of the Form LM-30. As stated in the preamble to that rule: ``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.'' 72 FR at 36109. Stewards were deemed to be ``labor 
organization employees'' by virtue of their receiving either ``lost 
time payments'' from the union or union leave or ``no docking'' 
payments from an employer. (See the definition of ``bona fide 
employee'' and ``labor organization employee'' in sections D4 and D11, 
respectively, of the LM-30 instructions, see 72 FR at 36178, 36180.)
    Generally, a union steward is responsible for informing employees 
of their rights under the collective bargaining agreement and 
applicable law, investigating grievances filed by union members, 
representing union members in presenting those grievances to 
management, and otherwise enforcing the collective bargaining 
agreement. See generally Herman Erickson, The Steward's Role in the 
Union 29-54 (1971). Often, these individuals continue to receive pay 
from their employers while performing these functions for the union, in 
the form of union leave or ``no docking'' pay. In other instances, the 
stewards perform these functions on their own time (e.g., breaks, meal 
periods, and before or after working hours). As a general rule, 
stewards continue to perform their regular jobs for an employer while 
serving in this role. As a need arises, consistent with a collective 
bargaining agreement or custom and practice, they will temporarily 
interrupt their work at their trade to help resolve grievances that 
arise in the workplace. Union members who volunteer on safety 
committees and the like engage in similar functions, often receiving 
payments from their employer while

[[Page 48424]]

they are engaged in such duties