DoL Scraps Beefed Up Union Reporting Mandate

October 14, 2009 ( - Saying that a Bush Administration-proposed disclosure rule for annual union financial reports was too onerous, the Department of Labor (DoL) has scrapped the mandate entirely.

The DoL Office of Labor-Management Standards (OLMS) on Tuesday issued a notice that rescinded the final rule on union annual financial reports first released January 21 (see DoL Puts out Union Disclosure Final Rule ).

The now-scrapped rule would have beefed up Form LM-2, a large-union annual financial report, by adding required disclosures about parties buying or selling union assets and the benefits and compensation of union officers and employees. The rule also provided that the Secretary of Labor could revoke the authorization of a small union to file the simpler Form LM-3 after being delinquent or deficient in its filings.

The Obama Administration first delayed the rule’s effective date until April 21 and then October 19 with the mandate to be applicable January 1, 2010. On April 21, OLMS first proposed to drop the rule.

“The department fully recognizes and supports the importance of union reporting and disclosure to the union members and to the public, but it also believes that the LMRDA (Labor-Management Reporting and Disclosure Act) requires a balancing of transparency with the need to maintain union autonomy without overburdening unions with reporting requirements,” the notice explained. “The Form LM-2, as established by the January 21 rule, did not adequately consider this balance.”

The DoL added: “The Department does not believe that this necessary balancing is possible without a review of the 2003 changes to the Form LM-2, which the rulemaking process that culminated in the January 21 rule did not undertake.”

The agency said the rule also did not properly consider the limits constraining small unions to comply.

According to the notice, the DoL received 27 comments on an earlier proposal to scrap the rule, in which four unions and a federation of unions supported the rule’s withdrawal and the remaining 22 commenters supported its implementation.

The latest DoL release is available here .