Olms interpretative Manual

parties.

253.070ADVERTISINGINUNIONLITERATURE

Expenditures for employee advertisements in union souvenir journals paid to a labororganizationshouldbetreatedas“sporadicandinsubstantial.”Where suchpaymentsaremadeto a banquet group or committee composed of employees of the employer, such payments neednot be reported unless the purpose is to persuade the employees in relation to their collectivebargaining rights.See also Form LM-10 FAQ 31(A) (noting that this is not a blanket rule andreportingalso depends on the frequencyandamountoftheexpenditures).

An employer pays a labor organization $1,000 for a full-page advertisement in acommemorative booklet that is given to all of the officers of local unions attending a unionconference. The same employer also pays $2,000 to conduct marketing activities from a tradebooth at the conference. The employer must file a Form LM-10 reporting the $1,000 paid for theadvertisementinthecommemorativebooklet,and the $2,000for the conference tradebooth.

Under section 203(a), and subject to multiple exceptions, employers must report payments tolabor organizations and their officials. 29 U.S.C. § 433(a)(1). Section 203(a)(1)(B) exemptspayments of the kind referred to in section 302(c) of the Labor Management Relations Act(LMRA). 29 U.S.C. § 433(a)(1)(B). Section 302(c) covers payments "with respect to the sale orpurchase of an article or commodity at the prevailing market price in the regular course ofbusiness." 29 U.S.C. § 186(c)(3). The purchase of "advertising" in a journal or use of a boothmight be considered to be comparable to the purchase of an "article or commodity" within themeaning of the exception set forth in section 302(c)(3) of the LMRA, but the transactions, by allappearances, are not made in the "regular course of business." Unions are not in the business ofproducing and selling periodicals for advertising revenue or hosting trade shows. Thus, thepayment is not in the regular course of business. In addition, the purpose of a commemorativejournal is to raise funds for the union, and purchasers of space do so, at least in part, to supportthe union, and not merely for advertising purposes. Thus, there is no reliable way to assess a"prevailing market price" for journal entries or rental of a booth at a union conference; thereforethisexemption is not applicable.

(Revised:Dec.2016)

253.071

29 CFR 405.5 by reference to Form LM-10 specifically excludes from the reportingrequirements certain sporadic or occasional gifts, gratuities or favors of insubstantial value.Advertisement in a testimonial booklet would not need to be reported unless its purpose, directlyor indirectly, is to influence employees in relation to their collective bargaining rights.See alsoFormLM-10 FAQ 31(A).

(Revised:Dec.2016)

253.072SOLICITINGPAIDADVERTISEMENTSFROMEMPLOYER

There is nothing in the LMRDA (of 1959) which would affect the legality of a union’scontinuation of its practice of soliciting paid advertisements from employers for insertion in asouvenirjournalinconnectionwithitsannualdinner.

80. 
    CONTRIBUTIONSTOUNIONAPPRENTICESHIPPROGRAM
    

The furnishing by an employer of less than $250 worth of steel every three or four years onthe request of the union for use in the union’s apprenticeship training program can be considereda “sporadic or occasional gift... of insubstantial value” within the meaning of exception (e) of theexclusions listed in the instructions for Question 8A, Part A, of Form LM-10.Therefore, noreportofsuchagiftisrequired.

(Revised:Dec.2016)

80. 
    TOIMPROVELABOR-MANAGEMENTRELATIONS
    

Occasional acts of hospitality which are designed solely to further sound labor-managementrelations, which involve an insubstantial cost for each person invited, and which the companyextends in similar fashion to other groups with which it meets on matters of mutual interest neednot be reported.

80. 
    EMPLOYEERECREATION
    

Employer payments to a fund for the purposes of conducting a bowling league, picnic,clambake or Christmas party is not prohibited under the Act.Neither is a report required fromthe employer; such payments fall within exception (e) of the exclusions listed in the instructionsfor Question 8A, Part A, of Form LM-10 which states that “sporadic or occasional gifts,gratuities, or favors of insubstantial value, given under circumstances and terms unrelated to therecipients’statusinalabororganization(e.g.,traditionalChristmasgifts),”neednotbereported.

(TechnicalRevisions:Dec.2016)

80. 
    EMPLOYEEPICNIC
    

For many years it had been the custom of Company Xto sponsor an annual picnic for itsemployees.After the company was organized by Union Y, the union decided that it would co-sponsor the picnic and share the expenses equally with the company.The cost of the picnic forthe200 employees of the company was $3,000.

Underthesecircumstancesnoreportisrequiredfromthecompanypursuanttosection203ofLMRDAundereitherthepastorthepresentpracticebecause the paymentinvolved (atmost
$15.00 per employee and his family) is, in effect, a gift or additional wages of insubstantial valuegiven under circumstances unrelated to the recipient’s status in a labor organization.This is oneof the administrative exceptions to the reporting requirements of LMRDA granted by theSecretaryof Labor.

253.090DIVIDENDSTOLABORORGANIZATION

Payments of dividends to labor organizations which are stockholders of the corporation neednot be reported, notwithstanding the fact that the corporation is on notice that the dividendpaymentis to a labor organization.

*253.091PAYMENTSTOSUBSIDIARYOFALABORORGANIZATION

An employer made a payment to a Building Corporation which was a subsidiary of a locallabor organization as reparation for a violation of the collective bargaining agreement.Theviolation involved the employer’s breach of a contract provision prohibiting the use ofprefabricated materials.Since the reparation payment made to the subsidiary of the local did notfallwithintheexceptionssetforthinsection302(c),LaborManagementRelationsAct,1947,as

amended,itisrequiredtobereportedbytheemployerundersection203(a)(1)oftheLMRDA.

However, if the payments had been made as the result of a valid settlement, arbitration, orcourt decision, they might have been allowed by Section 302(c)(2)’s exception for “payment ordelivery of any money or other thing of value in satisfaction of a judgment of any court or adecision or award of an arbitrator or impartial chairman or in compromise, adjustment,settlement, or release of any claim, complaint, grievance, or dispute in the absence of fraud orduress . . . . .”See Flynnv. Dick Corp.,481 F.3d 824, 181 LRRM 2673 (D.C. Cir. 2007)(orderfor employer to make payments to union trust funds would not violate §302 because would bemade after decision finding breach of “traveling contractor” clause); Toyota Landscaping Co. v.S. Cal. Dist. Council of Laborers, 11 F.3d 114, 119 & n. 4, 144 LRRM 2824, 2828 & n. 4 (9thCir.1993)(employer payments in settlement of grievance over breach of subcontracting clause).When this exception applies, reporting is not required by employers under LMRDA §203(a)(1).Seealso ManualEntry 253.401.

(Revised:Dec.2016)