In February 2006, Baker & Daniels LLP reported a new enforcement initiative announced by the U.S. Department of Labor (DOL) aimed at the Form LM-10 reports of various union-related expenditures that employers are required to file under the Labor Management Reporting and Disclosure Act (LMRDA). In essence, the DOL announced that it would begin actively monitoring the required employer reports after years of what was perceived by some as near non-existent review/enforcement measures. Around the same time, the DOL announced a similar initiative regarding the Form LM-30 reports that unions are required to file under the LMRDA. The transactions that unions must report on the LM-30 are largely the same in nature as those that employers must report on the LM-10, providing DOL with the ability to readily cross-check employer and union reports for accuracy.
In July 2007, the DOL issued its final rule (Final Rule), governing Form LM-30 reports, which included numerous significant changes to prior (and longstanding) DOL policy. According to the DOL's Office of Labor-Management Standards, it issued the new rule to clarify reporting requirements and increase union transparency. The Final Rule only covered required union reports, but DOL indicated that the changes made by the Final Rule would likely be reflected in revised guidance governing the required LM-10 employer reports. Employers and their counsel have been watching and waiting for the new LM-10 guidance ever since. The AFL-CIO, on the other hand, filed a federal lawsuit in January 2008 challenging the Final Rule.
However, rather than turning to the employer LM-10 reports, the DOL (under the new Obama Administration) recently announced that it would revisit the new standards governing union LM-30s. According to the DOL, under its own 2007 Final Rule, "fundamental questions regarding the scope and extent of the reporting obligations are unanswered, and litigation challenging some aspects of the form remains pending." Consequently, the DOL has determined that it would "not be a good use of resources" to bring enforcement actions for failure to comply with the Final Rule, as long as unions make an effort to meet their 2009 filing obligations "in some manner." The AFL-CIO has agreed to stay proceedings in its lawsuit challenging the Final Rule pending the outcome of the DOL's review.
Though the DOL has not explicitly addressed whether any changes to their LM-10 regulations are forthcoming, its decision to revisit its LM-30 guidance signals that it may be some time before the long-awaited new standards governing employers' required reports are issued. As a result, employers may wish to ensure compliance with the LMRDA by adhering to its reporting requirements and periodically checking the DOL's online informal LM-10 guidance (primarily contained in DOL's LM-10 "FAQs").
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