Olms interpretative Manual

PAYMENT RECEIVED FROM ANY EMPLOYEROR CONSULTANT

248.001LMRDA,SECTION202(a)(6)

. . .any payment of money or other thing of value (including reimbursed expenses) which heor his spouse or minor child received directly or indirectly from any employer or any person whoacts as a labor relations consultant to an employer, except payments of the kinds referred to insection302(c) of the Labor Management Relations Act, 1947, as amended.

248.005SCOPEOFSECTION

Section 202(a) (6) is designed for those situations which pose conflict of interest problemswhich are not covered in the previous five sections of 202.The Committee Reports supply thisexample:

Union Officer C accepts a payment from employer K with the understanding that C’s unionwillnot attempt to organize the Kfirm plant.

Normally it would be expected that C’s union would attempt to organize that plant.Thistransaction, which is reportable under 202(a) (6) of LMRDA by the union officer, (and by theemployer under 203(a) (1)), is one that is also indictable under section 302(a) of the Taft-Hartley Act.

A union officer must report under section 202(a) (6), if he receives any payment by way ofdividends or otherwise from a firm which is competitive to one which has collective bargainingagreementswith his own union.

Conflict of interest reporting under section 202(a) (6) does not require an employer whomanufactures sweaters in California to report a wedding gift of $1,000 he has given to his son-in-law who is the Business Agent of a Machinist Union in Pittsburgh for the reason that, in theabsence of any other factors, no conflict of interest situation is posed.The key issue of theproblem lies in whether the payment (received by the union officer) poses a “conflict of interest”in the responsibilities of the union officer to his members to whom he owes fiduciaryresponsibilitiesas a union officer to represent themwithundivided loyalty.
A payment by an employer to an ordinary member of the union who is not an officer wouldnot be reportable.Similarly, if the maker of the payment does not meet the definition ofemployer, no report would be required by the union officer even if the payment he received wasclearlyonethatposesaconflictofinterestsituation.
Exceptions: In 202(a) (6) of the Act note the reference to section 302(c) of Taft-Hartley.Union officers will be particularly concerned with subsections 1 and 3 thereof.Note that thelanguage of those subsections has been incorporated specifically in several of the first fivesubsections of 202(a).By far the most important one is the bona fide regular employeeexception: Where an employer pays a union officer wages for work performed, no report isrequired.Thedifficultiesstemfromthosereleasedorlosttimesituations.Forexample,whereaunionofficer is responsible for handling grievances for theunion in hisplant,thecontract
between the union and the employer may provide in many instances that this officer shall beexcused from his regular work to handle the grievances and shall be paid his regular wages whilehandlingthegrievances. Suchasituationwillnotnormallyrequirereportsfrom theunionofficer or the employer on the theory that the employee officer is being paid for work performedof value to the employer who is interested in seeing to it that grievances are immediatelyadjusted.

248.100TRANSACTIONWITHPRESIDENTOFEMPLOYERACTINGININDIVIDUALCAPACITY

Union Officer A works for a union that represents employees of X Corporation.A sold hisstock interest in X Corporation to Y, President of X Corporation.Y purchased the stock in hisindividual capacity.Y owns 30% of the X Corporation’s stock (the 30% includes the stocksecured from A).The purchase agreement between A and Y calls for an initial payment onexecution of the agreement and the balance payable in five equal annual installments.Underthese circumstances both A and Y are required to file reports of this transaction; A under section202(a) (6), and Y under section 203(a) (1).Notwithstanding the fact that Y purchased stock inhis own individual capacity, he is considered an employer under section 3(a) of the Act. SeeNote1.

At the same time Mrs. B, wife of Union Officer B (who is also an officer of a union thatrepresents employees of X Corporation), also sold her stock interest in X Corporation to Y in hisindividual capacity.Payments are on the same terms as the transaction involving A and Y.Under these circumstances, Union Officer B is required to report pursuant to section 202(a) (6)with regard to the payments received by his wife from Y.On the other hand, Y is not required toreportunder203(a) (1)thepayments madeto thewifeof UnionOfficer B.SeeNote 2.

NOTE1:
A key official of corporation will be considered to be an employer within the meaning ofsection 3(e) of the Act if he has the responsibility for any aspect of the employer-employeerelationship of the corporate employer, albeit he is dealing in his “individual” capacity with aunion officer.

NOTE2:
Under section 202(a) (6) a union officer must report any payments received by his wife orminor child, whereas, under section 203(a) (1) an employer need report only payments madeto a union officer and is not required to report payments to a union officer’s wife unlessthewifeis a mereconduit forthe transmission of fundsto the union officer.

(Revised:Dec.2016)

248.200PAYMENTOFWAGESFORWORKNOTPERFORMED

Members of a local were paid wages by X Department Store for a project on which they didno work but on which they would have been employed had not the store inadvertently employeda non-union contractor.Payment of the funds was made by the store to the union steward fordisbursementto the members of the local.

Section 202(a)(6) requires every "officer" or "employee" of a labor organization to file areport listing any payment of money which he received from any employer except payments ofthe kind referred to in section 302(c) of LMRA. Therefore, the union steward is required toreport the receipt of this payment if he is an "officer" or "employee” of the labor organizationwithin the meaning of those terms as they are defined in sections 3(f) and 3(n) of LMRDA.Further,anyofficer oftheunion whoreceivedpayments fromthestorethroughthe union
stewardwouldberequiredtofileareport.
XDepartmentStoreisrequired toreportthepaymentpursuant tosection203(a)(1).Sincethe payment in question was a payment of wages for work not performed, it cannot be said tocomewithin the regularwageexceptioninsection 302(c) of LMRA.

248.300PAYMENTSTOJOINTAPPRENTICESHIPCOMMITTEE

Payments by employers to a Joint Apprenticeship Training Program, which has been createdunder the conditions set forth in section 302(c)(6) of the Labor Management Relations Act(section 505 of LMRDA) are notrequired to be reported under section 202(a)(6) of LMRDA byaunionofficerservingas the unionrepresentativeonsuchacommittee.

SeealsoManualEntry253.805.

EMPLOYERREPORTINGINGENERAL

1. 
   LMRDA,SECTION203
   

1. 
   Everyemployer whoin any fiscalyear made--
   
   1. 
      any payment or loan, direct or indirect, of money or other thing of value (includingreimbursed expenses), or any promise or agreement therefore, to any labor organization orofficer, agent, shop steward, or other representative of a labor organization, or employee ofany labor organization, except (A) payments or loans made by any national or State bank,creditunion, insurancecompany, savingsand loanassociation orothercreditinstitutionand
      

(B) payments of the kind referred to in section 302(c) of the Labor Management RelationsAct,1947, as amended;

2. 
   any payment (including reimbursed expenses) to any of his employees, or any groupor committee of such employees, for the purpose of causing such employee or group orcommittee of employees to persuade other employees to exercise or not to exercise, or as themannerofexercising,therighttoorganizeandbargaincollectivelythroughrepresentativesof their own choosing unless such payments were contemporaneously or previously disclosedtosuch other employees;
   
3. 
   any expenditure, during the fiscal year, where an object thereof, directly or indirectly,is to interfere with, restrain, or coerce employees in the exercise of the right to organize andbargaincollectivelythroughrepresentativesoftheirownchoosing,oristoobtaininformation concerning the activities of employees or a labor organization in connection witha labor dispute involving such employer, except for use solely in conjunction with anadministrativeor arbitral proceeding or a criminalorciviljudicialproceeding;
   
4. 
   any agreement or arrangement with a labor relations consultant or other independentcontractor or organization pursuant to which such person undertakes activities where anobject thereof, directly or indirectly, is to persuade employees to exercise or not to exercise,or persuade employees as to the manner of exercising, the right to organize and bargaincollectively through representatives of their own choosing, or undertakes to supply suchemployer with information concerning the activities of employees or a labor organization inconnection with a labor dispute involving such employer, except information for use solely inconjunction with an administrative or arbitral proceeding or a criminal or civil judicialproceeding;or
   
5. 
   any payment (including reimbursed expenses) pursuant to an agreement orarrangementdescribedinsubdivision(4);
   

shall file with the Secretary a report, in a form prescribed by him, signed by its president andtreasurer or corresponding principal officers showing in detail the date and amount of each suchpayment, loan, promise, agreement, or arrangement and the name, address, and position, if any,inany firmor labor organization of the person towhomit was made and a full explanation of the
circumstances of all such payments, including the terms of any agreement or understandingpursuanttowhichtheyweremade.
* * * * *

4. 
   Nothing contained in this section shall be construed to require an employer to file a reportunder subsection (a) unless he has made an expenditure, payment, loan, agreement, orarrangement of the kind described therein.Nothing contained in this section shall be construedto require any other person to file a report under subsection (b) unless he was a party to anagreementor arrangement of the kind described therein.
   
5. 
   Nothing contained in this section shall be construed to require any regular officer,supervisor, or employee of an employer to file a report in connection with services rendered tosuch employer nor shall any employer be required to file a report covering expenditures made toany regular officer, supervisor, or employee of an employer as compensation for service as aregularofficer, supervisor,oremployeeof suchemployer.
   

2. 
   REGULATIONSSee29CFRPart405
   

250.010EFFECTIVEDATE

Sections 201, 202, and 203 became effective immediately upon the date of enactment,September 14, 1959.Section 207, which is titled “Effective Date,” specifies the period withinwhichreports required under thosesectionsmustbefiled.

(Revised:Dec.2016)

250.100ATTORNEY

An attorney who meets the definition of employer (see Manual Entry 030.440) and makes aloan of money to a labor organization would be required to file an employer report under section203(a)(1).

250.200CORPORATEOFFICERS

A manager or a president of a corporation may be required to report under section 203payments to a union officer, even if the payment involves an activity “individual” in nature andnot on behalf of the corporate employer, as for example, the sale at half the true and fair marketvalue of his home to a union officer of the union which represents the employees his corporatefirmemploys.

250.300FRANCHISEDAGENTSOFAGVASeeManualEntry030.450.