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The country’s key union transparency law, the Labor-Management Reporting and Disclosure Act (LMRDA), will turn 60 years old tomorrow, which deserves a raise of the glass for anyone interested in the integrity of the organized labor movement. Signed into law on September 14, 1959, by President Eisenhower, the LMRDA implemented several disclosure requirements that theretofore were largely absent from American labor law and ensured union democracy and transparency with the goal of making union officers and employees accountable to their members.
The LMRDA passed after an investigation by the United States Senate Select Committee on Improper Activities in the Labor or Management Field revealed “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.”
In particular, the investigation uncovered “examples of large union sums expended for doubtful or improper purposes,” “union officials engaged in private transactions for personal gain which compromised the rights or the position of the members who elected them,” “examples of union officials obtaining large loans from the union treasury as a means of covering illicit transactions … false, inaccurate, or unjustifiable data being included in union financial reports, without penalty, independent audit or public knowledge … [and] union trusteeships unjustifiably established and unduly prolonged as a means of preventing local democratic control, punishing dissenting members, diverting local funds and adding to the power of certain national officers.”
The LMRDA provided a “Bill of Rights” for union members, established a reporting obligation for union financial and administrative practices, imposed on union officers and others a fiduciary duty, defined procedures for the election of union officers, and added criminal penalties, among other things.
Since its passage, the LMRDA has been a crucial resource for union members, the public, and the government to evaluate the internal management of labor organizations. As a result of the LMRDA’s disclosure requirements, scores of union officials have been indicted or convicted of various federal crimes, including embezzlement and racketeering. Indeed, the LMRDA helped uncover malfeasance in well-publicized cases such as the Washington Teachers’ Union scandal and the conviction of former SEIU chapter president Tyrone Freeman.
While the LMRDA greatly improved transparency and accountability, for several decades much of the information union disclosure reports contained still was obscure. However, former Secretary of Labor Elaine L. Chao spearheaded with steely resolve an effort to vastly improve the disclosure forms, which labor unions resisted with lawsuits and public denunciations.
In fact, one element of the improved disclosure—the Form T-1 covering union-related trusts—never took effect due to a prolonged legal challenge that outlasted Chao’s tenure, though the current administration plans to resurrect it. Should the need for that reform be in question, one need only look to the ongoing United Auto Workers training fund scandal for evidence.
All told, for 60 years the LMRDA and the improved disclosure it enabled have fostered integrity in organized labor for union members and businesses alike. The result has been the greater transparency and accountability that the law envisioned, which certainly is something worth celebrating. Sláinte!