AFL-CIO Slapped Back in Effort to Stop Disclosure Reforms

U.S. Dist. Judge Gladys Kessler (D.C., Clinton) upheld the U.S. Dept. of Labor’s improved disclosure forms required of the nation’s largest unions on Jan. 22.  She delayed the implementation of the new LM-2 financial forms until July of this year, provided that the DOL makes available a fully tested version of its electronic reporting software at least ninety days before July.  With this ruling, unions with over $250,000 in annual income will likely have to account for their use of union dues for political activities in the 2nd half of this election yr.

 

Late last yr., Kessler issued a preliminary injunction suspending the new forms for all of 2004.  But on the 22nd, she ruled that when Congress enacted the Labor-Mgmt. Reporting & Disclosure Act (LMRDA) in 1959, it “gave the Secretary [of Labor] broad authority to require the filing of financial reports…[and] that Congress delegated to the Secretary the exclusive authority to determine the level of ‘detail as may be necessary’ for accurate disclosures.” 

 

In its suit to throw out Labor Secy. Elaine Chao’s reforms, AFL-CIO lawyers claimed that the LMRDA’s requirement of “a financial report…in such detail as may be necessary accurately to disclose its financial condition and operations” only required a balance sheet and income statement.  The union lawyers said that the statutory terms, “financial condition” and “operations,” are accounting “terms of art” referring to “balance sheet” and “income statement.”  But Judge Kessler pointed out that the LMRDA requires union officials to file a detailed “financial report,” not two specific statements of financial conditions and operations.  She also concluded that the “plain language” of the LMRDA “shows that Congress delegated to the Secretary the exclusive authority to determine the level of ‘detail as may be necessary’ for accurate disclosures.” [U.S.Dist. Ct., DC: 2004 U.S. Dist. LEXIS 776]