CEI Leads Coalition Letter to DOL on Intermediate Bodies Rule

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Dear Secretary Acosta:

As free-market and conservative organizations concerned with protecting worker free choice and ensuring labor union officials are accountable to members, we urge the Department of Labor (DOL) to restore the “Labor Organization Annual Financial Reports: Coverage of Intermediate Bodies” rule. The rule extends the coverage of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) to certain state and regional unions that represent only public employees and are a subordinate to an international or national labor union.

The George W. Bush administration promulgated this rule in 2003, and courts have since ruled that the Labor Department has authority to implement it. The DOL could reinstate the Bush administration’s 2003 interpretation of the LMRDA that intermediate unions, which are wholly composed of public sector members, are covered under the statute. This policy interpretation is backed up by a 2007 policy statement that provided analysis on the need and legislative authority for the rule. In 2008, the United States District Court for the District of Columbia issued a decision holding the DOL’s policy statement adequately explained and justified the agency’s interpretation of the LMRDA.

The rule clearly advances the intent of Congress, which passed the underlying statute with broad bi-partisan support to address widespread union corruption. Congress intended the coverage of the LMRDA to be applied broadly in order to promote union democracy and union financial integrity. In addition, labor unions have significantly changed how they are organized and run since 1959. Few small and independent unions exists today, and intermediate unions are interconnected with national and international unions which have the power to charter, affiliate, disaffiliate, or even put these intermediate bodies under trusteeship.

The Labor Department should now begin the process of promulgating the intermediate bodies rule to ensure a greater number of workers can easily assess whether union leadership spends dues payments prudently and in way that represents worker interests. Increasing union financial disclosure appears to be a regulatory priority of the DOL, with the intermediate bodies rule listed in each edition of the Unified Regulatory Agenda since the spring of 2017. 

Under the intermediate bodies rule, state and regional unions representing public employees are required to file union financial disclosure Form LM-2 with the Labor Department. These forms provide union members with information on union “assets, liabilities, receipts, salaries, loans to officers, employees, members or businesses and other disbursements.” Expanding the coverage of the LMRDA allows a private sector local union member to better track disbursements from a national labor union to its state intermediate unions.

Congress was wise to apply the provisions of the LMRDA broadly, because federal and state law lavish unions with monopoly power and other privileges. As such, much of labor unions authority stems from government, not voluntary support of workers. And since union members are the real owners of union finances and property, they should be entitled to an accounting of how union leadership spends their funds. Further, providing union members and the public with annual and detailed recording of union financial transactions can help curb embezzlement by union officers and help union members choose leaders who are fiscally responsible. ​

The below-signed organizations respectfully submit that the DOL promulgate the intermediate bodies rule to better advance the purposes of the LMRDA.

Sincerely,

Trey Kovacs
Labor Policy Analyst
Competitive Enterprise Institute

Bethany Marcum
Executive Director
Alaska Policy Forum

Lisa B. Nelson
CEO
ALEC Action

Phil Kerpen
President
American Commitment

Krisztina Pusok, Ph. D.
Director of Policy and Research
American Consumer Institute

Brent Wm. Gardner
Chief Government Affairs Officer
Americans for Prosperity

Grover Norquist
President
Americans for Tax Reform

Jim Waters
President and CEO
Bluegrass Institute for Public Policy Solutions

Michael Watson
Research Director
Capital Research Center

Jeffrey Mazzella
President
Center for Individual Freedom

Olivia Grady
Senior Fellow
Center for Worker Freedom

Kim Crockett, Esq.
Vice President and Senior Policy Fellow
Center of the American Experiment

Tom Schatz
President
Citizens Against Government Waste

Nathan A. Benefield
Vice President and Chief Operating Officer
Commonwealth Foundation

Brian Minnich
Executive Vice President
Freedom Foundation

Nathan Nascimento
Executive Vice President
Freedom Partners Chamber of Commerce

Jason Pye
Vice President of Legislative Affairs
FreedomWorks

Tim Chapman
Executive Director
Heritage Action for America

Carrie L. Lukas
President
Independent Women’s Forum

Heather R. Higgins
CEO
Independent Women’s Voice

Sal J. Nuzzo
Vice President of Policy
The James Madison Institute

Lindsay B. Killen
Vice President for Strategic Outreach & Communications
Mackinac Center for Public Policy

Harry Alford
President
National Black Chamber of Commerce

Daniel Erspamer
CEO
The Pelican Institute

Paul Gessing
President
Rio Grande Foundation

Tracie Sharp
President and CEO
State Policy Network

David Williams
President
Taxpayers Protection Alliance

Christian N. Braunlich
President
Thomas Jefferson Institute for Public Policy

Dear Secretary Acosta:

As free-market and conservative organizations concerned with protecting worker free choice and ensuring labor union officials are accountable to members, we urge the Department of Labor (DOL) to restore the “Labor Organization Annual Financial Reports: Coverage of Intermediate Bodies” rule. The rule extends the coverage of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) to certain state and regional unions that represent only public employees and are a subordinate to an international or national labor union.