Olms interpretative Manual

BUSINESS TRANSACTION WITH EMPLOYEROFUNION MEMBERS

247.001LMRDA,SECTION202(a)(5)

. . . any direct or indirect business transaction or arrangement between him or his spouse orminor child and any employer whose employees his organization represents or is activelyseeking to represent, except work performed and payments and benefits received as a bona fideemployee of such employer and except purchases and sales of goods or services in the regularcourseof business at pricesgenerally available to any employeeof suchemployer; and .. .

247.005UNIONOFFICERSASEMPLOYEEOFPENSIONFUND

When a union officer is paid by the employer for services rendered in the capacity of asecretary to a pension fund, both the union officer and the employer are required to report thetransaction.

247.100DISPENSINGMACHINESSeeManualEntry246.100.

247.200OPERATINGASIDEBUSINESS

The business agent of a local union has a side business which consists of repairing motionpicture equipment and selling new equipment to the theater operators who are the employers ofthe members of the union which the business agent represents.The transactions with theemployers are a substantial part of the business agent’s side business.He is required to filereports of his interest in and the income from that business under section 202(a) (3) of the Act(for which there is no statutory exception).On the other hand, the employers need not reportunder section 203(a) (1) since their purchases of equipment and their payments to the businessagentfor repairs are at theprevailing marketpriceintheregularcourseofbusiness.

247.300DISCOUNTSAVAILABLETOALLEMPLOYEES

Section 202(a) (5) is designed to pick up any direct or indirect business transactions betweenthe union officer for his wife or minor child) and the employer whose employees the unionofficer’s organization represents.Here there are two very important statutory exceptions,namely, payments of bona fide wages to the union officer for regular work performed, andpurchases and sales of goods or services in the regular course of business at prices generallyavailabletoanyemployee of the employer.

The second exception to reporting under section 202(a) (5) may be illustrated by thissituation.An automobile manufacturer, in order to promote the sale of its cars to its ownemployees,offersanyregular employeeacar ata20% discount.PresidentAofthelocal that
has collective bargaining relations with this automobile manufacturer buys a car at the 20%discount; President Ais a regular employee on the assembly line.Since President Ais a regularemployee, no report of the discount given to him by the employer need to be made since thesame discount is available to all employees.On the other hand, if President Awere not anemployee,a report would be required.