Olms interpretative Manual

CONSULTANTREPORTSINGENERAL

1. 
   LMRDA,SECTION203
   

2. 
   Every person who pursuant to any agreement or arrangement with an employer undertakesactivitieswhere an object thereofis, directly or indirectly--
   

1. 
   to persuade employees to exercise or not to exercise or persuade employees as to themanner of exercising, the right to organize and bargain collectively throughrepresentativesof their own choosing; or
   
2. 
   to supply an employer with information concerning the activities of employees or a labororganization in connection with a labor dispute involving such employer, except informationfor use solely in conjunction with an administrative or arbitral proceeding or a criminal orciviljudicial proceeding;
   

shall file within thirty days after entering into such agreement or arrangement a report with theSecretary, signed by its president and treasurer or corresponding principal officers, containingthe name under which such person is engaged in doing business and the address of its principaloffice,andadetailedstatement ofthetermsandconditionsofsuchagreementor arrangement.

Every such person shall file annually, with respect to each fiscal year during which paymentswere made as a result of such an agreement or arrangement, a report with the Secretary, signedby its president and treasurer or corresponding principal officers, containing a statement (A) ofits receipts of any kind from employers on account of labor relations advice or services,designating the sources thereof, and (B) of its disbursements of any kind, in connection withsuch services and the purposes thereof.In each such case such information shall be set forth insuchcategoriesastheSecretary may prescribe.

2. 
   REGULATIONS
   

Asprovidedin29CFR406.1(c),

“Undertake” means not only the performing of activities, but also the agreeing toperformthem or to have themperformed.

Asprovidedin29CFR406.1(d),

“A direct or indirect party to an agreement or arrangement” includes persons who havesecured the services ofanotheror of others in connection with an agreement or arrangementof the type referred to in 406.2, as well as, persons who have undertaken activities at thebehest of anotheror of others with knowledge or reason to believe that they are undertakenasaresultofanagreementorarrangementbetweenanemployerandanyotherperson,except bona fide regular officers, supervisors or employees of their employer to the extent towhich they undertook to perform services as such bona fide regular officers, supervisors oremployeesof their employer.

(TechnicalRevisions:Dec. 2016)

260.005CONSULTANTFORLABORORGANIZATION

Activities of an attorney on behalf of a labor organization (and not for an employer)would not be required to be reported, even though the attorney meets the definition of “laborrelations consultant” under section 3(m), because the only section of the Act which requiresreports from labor relations consultants is section 203(b), which provides for reports from everypersonwho has an agreement with an employerfor certain purposes.

260.100ACTIVITIESTOIMPROVEEMPLOYER-EMPLOYEERELATIONS

The development or performance of certain services intended to improve employee-employerrelationsmaynot,aloneandinitself,bringthoseservicesunder thereportingrequirementsof

section 203; however, if the purpose of the services was in fact--directly or indirectly--topersuade employees in relation to collective bargaining, then they would fall within the reportingrequirementsof this section.

260.200AGREEMENTSPRIORTOTHEACT

When a person (a labor consultant, attorney, etc.) entered into a contract to undertakeactivities specified in section 203(b) of the Act prior tothe effective date thereof, no 30-dayreport is required from that person.On the other hand if, subsequent to the effective date of theAct, that same person receives or makes any payments pursuant to the agreement, he isrequiredto file the annual report called for in the second sentence of section 203(b) notwithstanding thefactthataninitialreportofthe agreement was not required.

260.300SCOPEOFANNUALREPORT

Where a person “undertakes activities” of the type referred to in section 203(b) of the Actand Part 406 of the Regulations and as a result thereof is required to file the LM-20 report(Agreement and Activities Report), he is also required to file the LM-21 report (Receipts andDisbursements Report) within 90 days after the end of his fiscal year provided any receipt ordisbursement was made pursuant to the agreement reported in the LM-20 report.There mustbeincluded in the Receipts and Disbursements Report allreceipts and disbursements from anyemployers for whom “labor relations advice and services” have been rendered includingpayments received for such services and advice which would not in and of themselves haverequiredtheLM-20reportinthe firstinstance. (29CFR406.3)

For example, Consultant A, an attorney whose practice is limited to “labor law,” has 20clients (including B) on retainer.He renders labor relations advice and services (i.e.,representation, bargaining, etc.) to all of them.During the course of his year’s practice, Aundertakes to deliver a persuasive speech for one of his clients, B, in connection with a unionorganizationdriveinB’splant.

Asaresultofthisactivity,Aisrequiredtoreport:

1. 
   Thepersuasion activity heundertook for B(on FormLM-20);
   

2. 
   Receipts and disbursements from all 20 of his clients to whom he has rendered labor relationsadviceandservicesduringhisfiscalyear(onFormLM-21).
   

It should be noted that if A had not delivered the “persuasive” speech, noreports would havebeenrequiredofhim.

However, since April 2016, OLMS has applied a Special Enforcement Policy to consultants’annual Receipts and Disbursements Report, Parts B and C, which provides that filers need notreport any receipts for “labor relations advice and services” and also need not reportdisbursements for such services except where the object of the disbursement is one or both ofthose described in LMRDA §203(b)(1) and (2).Seewww.dol.gov/olms/regs/compliance/ecr/lm21_specialenforce.htmandManualEntry§260.001.

Douglasv.Wirtz,353F.2d30,32,60LRRM2264(4thCir.1965),cert.denied,383U.S.909
(1966).
(Revised:Dec.2016)

260.400TRAININGORSURVEYS

A person would not be required to file reports as a labor relations consultant on the basisof either the supervisory training or the employee-attitude surveys he conducts, unless any ofthese activities has, directly or indirectly, an objective described in section 203(b)(1) and (2) ofthe Act.

260.500WRITTENAGREEMENTNOTNECESSARY

It is not necessary that an agreement or arrangement be formal or in writing in order to bewithin the scope of section 203(b).There may be no more than an understanding between anemployer and an employer council that reportable services will be performed as necessary by thecouncil.For example, both parties may understand perfectly that if an attempt is made toorganize the employees of the employer, the council will provide material assistance (beyond themere giving of advice) in persuading employees as to the manner of exercising their collectivebargaining rights.Where such an understanding exists, both parties are required to report theterms of their arrangement or agreement, the employer’s report being required by section203(a)(4) of the Act.If periodic membership dues are paid by the employer to the association,annual reports would be required from each party for as long as the understanding continued toexist.

260.600ASSOCIATIONSASCONSULTANTS

Reports must be filed by an employers council which provides, as a regular service to itsmembers, discussion meetings with the employees of the member employers which are intendedtopersuadesuchemployeesintheexerciseoftheirbargainingrights.Areportmustbesubmitted by the council within 30 days after each employer entered into membership with thecouncil, since the discussion meeting service is part of the membership agreements of thecouncil.In addition the council would have to file an annual financial report within 90 days afterthe end of the council’s fiscal year.The employers who are members of the council would alsoberequiredtoreportthearrangement under section 203(a)(4).

WHOMUSTREPORT

261.003SEEINSTRUCTIONS,FORMSLM-20,LM-21

261.005EXISTENCEOFALABORDISPUTE

FordefinitionofLaborDispute,seeManualEntry040.701.

Any agreement or arrangement a labor relations consultant has with an employer inwhich he agrees to undertake activities with either of the objectives described in sections203(b)(1) or (2) of the Act, should be reported.The existence of a labor dispute is pertinent onlyto section 203(b)(2).In the context of that section, however, the labor dispute need notnecessarily be in progress at the time a consultant supplies an employer with informationconcerning the activities of his employees or a labor organization in connection with suchdispute.Agreements withan employer topersuadehisemployeesastotheirrightstobargain

collectivelyshouldbereportedirrespectiveofwhetherthereis alabordispute.

261.010COEXTENSIVENESSOFREPORTINGOBLIGATION

Theagreementsandarrangementscoveredbysection203(a)(4)and(5)andthosecovered by section 203(b) are substantially coextensive.Also, the provisions of section 203(c)are applicable in equal faction under section 203(a) and (b).Thus, to the extent that an employeris under the obligation to file a report under section 203(a)(4) and (5), a labor relations consultantwhoisaparty tothoseactivitieswould havetofilethereportsrequiredbysection203(b).

261.120MANAGEMENTCONSULTINGSERVICE

While the fact that a management consulting service is engaged in the development of“CompanyPolicyManuals”and“JobEvaluationandClassification”and“WageAdministrationPlans” intended to improve employee-employer relations does not, alone and in itself, bring thatservice within the reporting requirements of section 203(b), if the purpose of the service were infact, directly or indirectly, to persuade employees in relation to collective bargaining, then itwouldfallwithinthereportingrequirements of section 203(b)of the Act.

261.200ARBITRATING,BARGAINING,ANDADVISINGACTIVITIES

Under ordinary circumstance, acting as an arbitrator would not result in any reportableactivity.Neither would engagement in collective bargaining on behalf of an employer, nor thegiving of advice to industrial management regarding job evaluation, wage and salaryadministration, personnel administrator or similar fields ordinarily require a report.The lawspecifically requires reports from persons including labor consultants, only when the activitiestheyundertakehaveasanobjectthereof,eitherdirectlyorindirectly,“topersuadeemployeestoexercise or not to exercise, or persuade employees as to the manner of exercising, the right toorganize and bargain collectively through representatives of their own choosing; or to supply anemployer 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.”

261.300ORALORSUPPLEMENTARYAGREEMENTORARRANGEMENT

Any decision or mutual accord between a firm and its attorney that the attorney was torender services which are described by section 203(b) of the Act would be reportable.Such anarrangement may be oral and may supplement a previous arrangement establishing the attorney’srelationshipwithhisclient.