Olms interpretative Manual

TRANSACTIONWITHEMPLOYEROFUNIONMEMBERS

244.001LMRDA,SECTION202(a)(2)

. . . any transaction in which he or his spouse or minor child engaged, directly or indirectly,involving any stock, bond, security, or loan to or form other legal or equitable interest in thebusiness of an employer whose employees such labor organization represents or is activelyseekingtorepresent;...

244.100 LOANS

It is clear that loans in excess of a minimal amount must be reported by an officer oremployee of a union which represents, or is actively seeking to represent, the employees of theemployer who makes the loan.Although subsections (1) and (6) of section 202(a) containexceptions which mightbe construed to apply to such loans, subsection (2) of section 202(a)specifically covers such loans and does not contain any exceptions; there appears to be no basisforthe exclusion ofsuch loans fromthe reportingrequirementscontained in thatparagraph.

244.120“DEMINIMIS”LOANS

Congressintendedthatunionofficersreportloanarrangementswiththeiremployersthatpose conflicts of interest - for example, a 40 year, 2 percent loan in the amount of $20,000 so thattheofficer could buy a home, wouldposeareportableconflict.

(Revised:Dec.2016)

244.150CASHADVANCES

A cash advance would not be considered a loan if at the time the advance is made to theemployeeunionofficer,hehadalreadyrenderedservicestotheemployerthevalueofwhichexceeded the amount of the cash advance.It would seem that the employee was equitablyentitledto the moneyadvanced and consequentlyhad not, infact, receivedaloan.

244.170EMPLOYERASAGUARANTOROFLOANSeeManualEntry253.041.

BENEFIT FROM BUSINESS WHICH DEALS WITH EMPLOYER OFUNIONMEMBERS

245.001LMRDA,SECTION202(a)(3)

. . . any stock, bond, security, or other interest, legal or equitable, which he or his spouse orminor child directly or indirectly held in, and any income or any other benefit with monetaryvalue (including reimbursed expenses) which he or his spouse or minor child directly orindirectly derived from, any business a substantial part of which consists of buying from, sellingor leasing to, or otherwise dealing with, the business of an employer whose employees suchlabororganizationrepresentsorisactively seekingto represent...

245.005STOCKHOLDERINMUSICPUBLISHINGFIRM

When an officer of a musician’s union holds stock and is an officer in music publishing firmswhose income is derived from record companies which engage in collective bargaining with themusician’s union, reports may be required if a substantial part of the business of the musicpublishing firms consists of dealing with record companies whose employees the unionrepresentsor isactivelyseekingtorepresent.

245.100 LEASING TRUCKS TO EMPLOYER

Where a collective bargaining agreement between a local of newspaper truck drivers and theemployer provides that each member-employee of the union may lease a truck to the employer atX dollars per day of use, and an officer of the union who is a regular driver-employee of theemployer leases his truck to the employer, no report under section 202(a)(3) of the Act isrequired for the reason that the leasing arrangement amounts to an incidental benefit of theemployment relationship.

245.200SUBSTANTIALITYOFDEALING

Union Officers Aand Bof a local union are co-owners of a building corporation.Thecorporation, through intermediaries who are regular meat wholesalers, sold meat to employerswho bargain with the local union.In 1962, some 80% of the corporation’s business ofapproximately $100,000 was with such employers.Both A and Bowe reports for the year 1962with regard to their interest in and their income from the building corporation pursuant to section202(a)(3), since both the interest and the income are “derived from, any business a substantialpart of which consists of buying from, selling or leasing to, or otherwise dealing with, thebusiness of an employer whose employees such labor organization represents or is activelyseeking to represent.”See Form LM-30 Instructions, Section X, Part B (Items 8-12) Business,Definitionof “substantial part.”

(Revised:Dec.2016)

245.300BUSINESSAGENT-SIDEEMPLOYMENT

If a union business agent were to take a job with an employer (and thereby receive income),andtheemployer’s businessconsisted insubstantial partofbuying from,sellingto,orotherwisedealing with other employers whose employees the labor organization with which the businessagent is affiliated represents or is actively seeking to represent, a report would be required fromthebusinessagent.Thiswouldbesoeventhough the primary employer doesnot himself

employ anyone who is a member of the labor organization with which the business agent isaffiliated and the labor organization does not represent and is not actively seeking to representemployees of the primary employer, and even though the business agent’s job with the primaryemployer would not put him into contact with employees of any of the companies with which theprimaryemployerdealsandhewillhavenoresponsibilityforactivitiesinlaborrelationsmatters.
245.400 EQUIPMENT RENTING

If an officer or employee of UnionXrents theatrical equipment to groups staging amateurplays, and such groups employ persons represented by Union X, the officer or employee rentingthe equipment must file a report pursuant to section 202(a)(3).The amateur group is theemployer, and the renting of equipment is a business, a substantial part of which is carried onwithemployers whoseemployees UnionXrepresents.

Opinion9/16/60

245.500 REPAIR BUSINESS

Mr. A,Secretary-Treasurer and Business Agent of a union, is also the owner, along with hiswife and minor child, of a small corporation whose major business activity is the repair ofmotion picture projection equipment used in theaters and the sale of new equipment to thesesame theaters.He is considered one of the most competent repairmen in the area where heresides.Certain members of his union alleged that he had been delinquent in getting wage raisesfor them for the reason that he was more concerned with having good personal business relationswith the theaters with which he would have to bargain to secure wage raises for the members ofhis union.This union official is required to file a full report of his income from the corporationaswellasthatofhis wifeandminorchild.