AAUP and the Federal LMRDA: A Compliance Kit for Conferences and Chapters

Federal law requires labor unions to operate with internal democracy and fiscal integrity. In particular, the law sets standards for elections, financial soundness, and reporting. Since some AAUP entities are labor organizations under the Department of Labor’s definition, it is important to understand the federal standards. The AAUP’s Legal Department offers this compliance kit to help guide AAUP leaders through the requirements. The legal staff welcomes feedback regarding this kit.

What is the LMRDA?

In 1959, Congress enacted the Labor-Management Reporting and Disclosure Act, known as the LMRDA. The LMRDA requires unions to meet strong standards of responsibility and ethical conduct, and it protects members against abuse by union officials. The main focus of the LMRDA is unions in the private sector, including unions at private colleges and universities. Entities affiliated with private-sector unions may also have responsibilities under the statute. A fact sheet about the LMRDA is here: http://www.dol.gov/olms/regs/compliance/lmrda-factsheet.htm.

How is the LMRDA enforced?

The United States Department of Labor (DOL) enforces the LMRDA. DOL may conduct audits, receive and investigate complaints from union members, and refer cases for litigation to the United States Department of Justice. Individuals may also file lawsuits directly against unions to enforce their rights.

What does the LMRDA require unions to do?

In brief, the LMRDA imposes obligations in three main areas:

Bonding. Entities covered by the LMRDA must obtain a bond to protect the union’s assets in case of embezzlement or other internal crimes. However, unions with less than $5,000 in total annual receipts are exempt from bonding.

Elections. LMRDA standards cover nominations, ballot secrecy, and other election procedures. The standards apply to union officer elections. They also apply to elections for delegates to conventions at which union officers are elected or dues are voted on. In the AAUP’s case, this currently includes business meetings of the Collective Bargaining Congress at which the chair is elected. (The business meeting of the Assembly of State Conferences is no longer covered because the chair is elected directly by the membership of the state conferences.)1

Reporting. Covered AAUP components, as described below, and their officers and staff members, must file certain reports with the US Department of Labor. They need to keep records necessary to substantiate those reports.

What parts of the AAUP does the LMRDA cover?

AAUP operates at three main levels: local chapters, state conferences, and the national organization.  Local chapters exist at public and private higher education institutions. Some local chapters engage in collective bargaining, while others do not. Two or more chapters in a state may join together to form a state conference. 

The LMRDA protects union members in the private sector. For AAUP, this plainly includes faculty unions at private colleges and universities.

After this point LMRDA coverage starts to get a bit complicated. As we noted above, the LMRDA also covers meetings of the Collective Bargaining Congress at which the CBC chair is elected.  National AAUP has voluntarily complied with the LMRDA for more than twenty years. The legal status of AAUP state conferences under the LMRDA is currently in flux. We address that further in a separate question near the end of the Compliance Kit.

Tell me more about the AAUP-related entities covered by the LMRDA.

See our chart  (.pdf) reflecting our understanding of the LMRDA obligations of all levels of AAUP. The bonding, election, and reporting requirements are each discussed below. 

What effect will AAUP’s restructuring have on all this?

After the pending Association restructuring is completed, the Collective Bargaining Congress will face some new obligations under the LMRDA. The new AAUP-CBC, which will be a separate entity after restructuring, will need to satisfy LMRDA obligations in all areas: bonding, elections, entity reports, and individual reports. In other respects, the Association restructuring should not alter the LMRDA obligations of its constituent bodies.

What are the LMRDA bonding requirements?

The LMRDA requires officers and employees of unions with property and annual receipts of more than $5,000 to be bonded if they handle union funds or property.  The bond is to protect the organization’s assets in case of embezzlement or other internal crimes.  The minimum bonding amount for each covered officer or employee is 10 percent of the funds handled by the official and his or her predecessor, if any, during the preceding fiscal year.  A union with assets of over $5,000 that has not purchased a bond in the previous year must be bonded for at least $1,000.

The LMRDA limits its bonding requirement to protection against financial loss arising from fraudulent or dishonest acts.

How can we obtain a bond?

The Department of the Treasury maintains a list of companies approved to issue union crime bonds. They are listed here:  www.fms.treas.gov/c570/c570.html.  The Department of Labor provides information on the bonding requirements of the LMRDA here: http://www.dol.gov/olms/regs/compliance/bonding.htm.

You may obtain a bond from any company on the Treasury list above, through any insurance broker of your choice. Two brokers experienced in working with AAUP entities are:

Margretta (Gretta) Palya
Novick Group
1 Church Street
Rockville MD 20850
(301) 917-6550
mpalya@novickgroup.com
www.novickgroup.com

Kathryn D. Jacobson, CPCU, CIC
Senior Vice President
Seabury & Smith
1255 23rd Street NW
Suite 300
Washington, DC  20037
202 367-5035  phone
515 365-0552  direct fax
202 375-4018  mobile
800 978-6273 ext 75035 toll free

What are the LMRDA election requirements?

The core LMRDA principles ensuring democratic union elections are:

  • The union must remain fair and impartial, not showing favoritism, or even the appearance of favoritism, toward any candidate.
  • Every member in good standing has the right to nominate candidates, run for office, and vote by secret ballot.
  • The union needs to follow its own election rules, provided they meet federal standards.

The union may not furnish any resources to support or oppose a candidate. It must allow all candidates an equal opportunity to campaign at their own expense. If a union distributes information about one candidate, it must distribute the same information about all candidates. A chapter could, for example, allow every candidate the opportunity to send two emails using the chapter’s email list.

Elections may be conducted in person or by mail ballot. Candidates have the right to inspect voter lists and to have an observer present at the polls (for in-person elections) and at the ballot counting. Ballots and election records must be retained for at least one year.

Under the LMRDA, AAUP chapters that engage in collective bargaining at private colleges or universities must elect officers at least once every three years. These chapters must hold elections by secret ballot among the general membership. At higher levels, such as the Collective Bargaining Congress, the rules are slightly more flexible. The LMRDA provides that “intermediate bodies”–those between local chapters and national Council--may elect officers by delegates who were themselves elected by secret ballot.

Although the AAUP Legal Department is counsel to the national Association and not to individual chapters or conferences, the office can provide general guidance about compliance with the LMRDA’s election requirements. AAUP entities may also wish to consult with their own attorneys regarding compliance issues.

A link to information about LMRDA election compliance, including detailed guidelines on electing local union officials, is here: http://www.dol.gov/compliance/topics/unions-elections.htm

What reports does the LMRDA require a union to file? 

The LMRDA requires private-sector labor organizations to file certain reports with the DOL to document governance and financial integrity.  General information on these reporting requirements and on fiscal controls for unions is here: http://www.dol.gov/compliance/topics/unions-reporting.htm. There are three categories of documents that a LMRDA-covered entity is required to file:  

Information Report. A “Labor Organization Information Report” needs to be filed only one time – ideally at the formation of the entity. An amended version should be filed whenever the governing documents are changed. The form is known as the LM-1. You can find the LM-1 here:  (http://www.dol.gov/olms/regs/compliance/GPEA_Forms/blanklmforms.htm):

Annual Reports. Entities covered by the LMRDA must file certain financial reports annually. The forms are known as the LM-2, LM-3, and LM-4. The report your organization should use depends upon its total annual receipts.  Organizations with $250,000 or more in total annual receipts use the LM-2.  Organizations with $10,000 or more but less than $250,000 in total annual receipts use the LM-3.  Organizations with less than $10,000 in total annual receipts use the LM-4. 

LM-2: http://www.dol.gov/olms/regs/compliance/revisedlm2.htm
LM-3: http://www.dol.gov/olms/regs/compliance/lm3_downloadpg.htm
LM-4:  http://www.dol.gov/olms/regs/compliance/lm4_downloadpg.htm

The reports are public information and the DOL posts them (as well as a variety of other union information) on its website at http://www.dol.gov/olms/regs/compliance/rrlo/lmrda.htm.

What reports does the LMRDA require officers and staff to file?

The officers and staff of your organization may be required to submit an LM-30 on an annual basis. The LM-30 is an annual report that must be filed with the DOL by individual union officers and non-clerical staff who receive anything of value over $250.00 (beyond regular business transactions) from an employer/vendor/business. In addition, disclosure is required if the spouse or minor child of an officer or non-clerical employee receives anything of value from, had a financial interest in, or received income from these entities.  

You don’t need to file an LM-30 to report your regular faculty salary or normal business transactions, such as the travel reimbursement you receive for attending a disciplinary society meeting. If the institution provides you with something that is available only to union officers, however, then that benefit must be reported if its value exceeds $250.00.

If you have any financial connection, other than an employment relationship, with an employer of AAUP members or a vendor to the AAUP, we encourage you to review the DOL’s publications on the individual officer and staff LM-30 requirements or to contact the AAUP’s Legal Department. The AAUP’s Legal Department cannot provide legal advice but can provide general guidance on the LM-30 obligations.

The AAUP’s Legal Department has developed answers to faculty members’ Frequently Asked Questions about the LM-30:
http://www.aaup.org/AAUP/about/bus/faqlm30.htm

More information about LM-30’s may be found here: 
http://www.dol.gov/olms/regs/compliance/GPEA_Forms/revisedlm-30_Instructions.htm
http://www.dol.gov/olms/regs/compliance/RevisedLM30factsheet.htm
http://www.dol.gov/olms/regs/compliance/RevisedLM30_FAQ.htm

A fillable version of the LM-30 itself can be found here:
http://www.dol.gov/olms/regs/compliance/GPEA_Forms/RevisedLM30.pdf.

General information about the LMRDA reporting requirements can be found here: http://www.dol.gov/compliance/topics/unions-reporting.htm.

What are the LMRDA recordkeeping requirements?

Entities covered by the LMRDA must maintain for 5 years the records on which their annual LM-2,-3, or -4 reports are based. Examples of these records include:

  • Credit card statements and itemized receipts for each credit card charge
  • Copies of bank deposit slips and bank credit and debit memos 
  • Vouchers for union expenditures
  • Internal union financial reports and statements
  • Minutes of all membership and executive board meetings
  • Fixed assets inventory

Election ballots and materials must be kept for 1 year.

A link to the DOL advice on recordkeeping requirements is here:  http://www.dol.gov/compliance/topics/unions-reporting.htm#recordkeeping

Does the LMRDA cover AAUP state conferences?

On the basis of the DOL’s response to a complaint, it appears that the department may consider state conferences that include private-sector collective bargaining chapters to be labor organizations covered by the LMRDA, although the AAUP has contested such coverage.  Thus, those state conferences that include collective bargaining chapters at private-sector colleges or universities should carefully consider ensuring that their election, bonding, and financial reporting processes are in compliance with the requirements of the LMRDA.

With respect to state conferences that include only public-sector collective bargaining chapters, the news is rosier.  In November 2010, the Department of Labor issued guidance stating that the LMRDA did not cover “intermediate bodies that are wholly composed of public sector labor organizations.”  Accordingly, for the time being at least, those state conferences may consider themselves out of the jurisdiction of the LMRDA.  Of course, a DOL under a new administration could revise that interpretation.

With respect to state conferences with no chapters that engage in collective bargaining, the guidance above from the DOL strongly suggests that they are not covered by the LMRDA either. 

As a general matter, we invite state conference officers to seek independent legal advice and to check with the national AAUP Legal Department about further developments.

Are there other requirements for public-sector collective bargaining chapters?

As we discussed at the outset, the LMRDA, a federal law, does not cover collective bargaining chapters at public colleges and universities. State laws, though, may create obligations for those chapters concerning fiscal integrity, elections, reporting, and recordkeeping. In addition, as noted above, public-sector collective-bargaining chapters may have some obligations with respect to their elections of delegates to larger AAUP bodies.2 For further information about state requirements, leaders of AAUP public-sector bargaining chapters might: seek advice from an attorney in your state; read your public employee bargaining act; or consult the website or staff of your state labor board.

Footnotes:

1.  After Restructuring, election of chapter delegates to all AAUP-CBC June meetings will need to comply with the LMRDA. The AAUP-CBC will be a labor organization in its own right after restructuring, and therefore all AAUP-CBC officers elected at the meeting will be union officers; currently the only CBC union officer is the CBC chair, because the chair serves on the AAUP Council and Executive Committee. Back to Text

2.  As noted, the LMRDA requires that chapter delegates to CBC meetings at which the Chair is elected (and at which all officers are elected after restructuring) must be elected by secret ballot. Back to Text

(updated 2/11)