Olms interpretative Manual

EXPENDITURESTOOBTAININFORMATION

256.001LMRDA,SECTION203(a)(3)

. . . or is to obtain information concerning the activities of employees or a labor organizationin connection with a labor dispute involving such employer, except for use solely in conjunctionwithan administrativeorarbitral proceedingoracriminal orciviljudicial proceeding;...

256.005INFORMATIONSOLELYFORLEGALPROCEEDINGS

The instructions for Part X, Part A, Item 8 of the Form LM-10, on page 4, contain anexclusion relating to agreements and arrangements to obtain information solely for use inconjunction with administrative, arbitral, or judicial proceedings.Thus, if the information isobtained and used solely in conjunction with such proceedings (which would include forexample, a representation hearing before the National Labor Relations board) it is not required tobe reported.If the information is obtained or used also for purposes extraneous to suchproceedings,it must be reported.

(TechnicalRevisions:Dec.2016)

256.100LABORSPYING

Instead of hiring a middleman, some employers pay a bonus to one of their regular officers,supervisors, or employees to spy.Here the “spy” may simply sit outside the place where theunionorganizersare meetingwithother employeesofthesamebusinessandrecordthenamesofthe employees who are going in and coming out.He then turns this information over to theemployer.This type of activity is also, reportable, unlessthe information is to be used solelyinconnection with an administrative, arbitral or judicial proceeding.An example of such aproceedingwouldbearepresentation hearing beforethe NLRB.

AGREEMENTWITHCONSULTANT

257.001LMRDA,SECTION203(a)(4)

. . . any agreement or arrangement with a labor relations consultant or other independentcontractor or organization pursuant to which such person undertakes activities where an objectthereof, directly or indirectly, is to persuade employees to exercise or not to exercise, or persuadeemployees as to the manner of exercising, the right to organize and bargain collectively throughrepresentatives of their own choosing, or undertakes to supply such employer with informationconcerning the activities of employees or a labor organization in connection with a labor disputeinvolving such employer, except information for use solely in conjunction with an administrativeorarbitral proceedingor a criminal orcivil judicial proceeding;or . . .

257.002See29CFR 405.5

257.005PERSUASION,EVENTHOUGHLEGAL,MUSTBEREPORTED

The purposes which would make an arrangement subject to the reporting requirements ofsection 203(a) (4) and (b) need not be unfair labor practices otherwise in violation of law.Thesesubsections speak of activities to “persuade” employees in the exercise of their collectivebargaining rights, in significant contrast with section 203(a) (3) which requires reporting byemployers of expenditures where the object is “to interfere with, restrain, or coerce employees inthe exercise of” these rights.The legislative history supports this conclusion.The provisioncorresponding to section 203(a)(4) in the House Bill as reported (section 203 House Bill asreported (section 203(a)(4) of H. R. 8342) would have required reporting only in the case of anagreement to provide an employer with the services of a person or firm engaged in the businessof “interfering with, restrain, or coercing employees in the exercise of rights guaranteed” by theLMRDA, the National Labor Relations Act, or the Railway Labor Act.This provision wasreplacedbythepresentsection 203(a) (4)with itstestofpersuasion.

(TechnicalRevisions:Dec.2016)

257.010 ADVICE TO EMPLOYERSeeManualEntries265ff.

257.100AGREEMENTSBETWEENEMPLOYERSANDEMPLOYERCOUNCIL

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.

257.200 LABOR “SPIES”

The furnishing of persons to perform espionage or reporting work in connection with thestrike, as part of their duties, would have to be reported under section 203(a)(4) and 203(b)(2)covering undertakings to supply the employer with information about the activities of theemployeesor the union in a labor dispute.

(TechnicalRevisions:Dec.2016)

257.205EXAMPLEOFCONSULTANT“SPYING”

Example: A union is trying to organize the employees of an employer.The employer hires a“consultant” to find out for him what the union is promising his employees and which of theemployees are attending the union meetings.This can be done in many ways.In the McClellanCommittee hearings there was testimony showing cases where the consultant had “planted” oneof his employees in the union.This man was able to let the employer know exactly what theunionwasdoingandplanningaswellas itsstrengthandweaknesses.Thistypeof activityon

thepartofemployersandmiddlemenledtotheinclusionofthisreportingprovisionintheAct.

257.210SURVEILLANCEINCONNECTIONWITHLABORDISPUTE

In order to be reportable under sections 203(a)(4) and 203(b)(2) of LMRDA, an agreement orarrangement between an employer and an independent contractor for obtaining information mustbe made “in connection” with an existing labor dispute.Thus, where an employer in the railroadindustry (within which a continuing major dispute over work rules and so-called“featherbedding”existsbetweenthecompaniesandtheunions)hiresadetectiveagencytoobtain information concerning the conduct of his employees and such information is obtained bysurveillance, it must be shown that the surveillance is reasonably connected with that disputebefore a report is required.A later disagreement between the employer and the union as towhether the evidence developed by the surveillance justified disciplinary action against theparticular employeesinvolvedisnot germanesince the disputewas not one existingat the timeof the surveillance.

257.220INFORMATIONONPREVIOUSUNIONACTIVITIES

An employer report on Form LM-10 is required under sections 203(a) (4) and 203(a) (5)whenever an employer enters into an agreement with a labor consultant, or other independentcontractor or organization, to supply him with information about activities of a union or itsofficers where the union involved is engaged in a current labor dispute with the employer.Areport is required even if the information to be supplied concerns activities of the union or itsofficers during a previous organizing drive or a labor dispute involving a different employer inanotherlocation.

257.300 EMPLOYER “AGREEMENTS OR ARRANGEMENTS” WHERE EMPLOYEESARENOT“HISEMPLOYEES”

Some employees of APlant decided to resist an organizing drive by Bunion.They engagedCconsultanttoadvisethem andhelporganizeanti-unionactivities.Csuggestedtheorganization of an employees’ anti-union committee and acted directly to persuade employeesagainst joining the union by making speeches to the employees, preparing and distributing lettersto the employees which were signed by members of the employees’ committee.The activities ofthe committee were financed by X, an auto dealer, and Y, a doctor, under the name of “Citizensof ZTown.”These men had approached Cand offered to pay the costs of the anti-unioncommittee.No evidence was developed to indicate that either had any connection with APlantor any financial interest in it.They attributed their contributions to a desire to promote the bestinterests of their town and their names were never revealed publicly.Likewise, no evidence wasdeveloped that APlant was involved with the activities of the anti-union committee in anymanner.When the organizing drivewas defeated,the committee disbanded.

Section 203(a) (4) of LMRDA requires reports from “every employer” who arranges with alabor relations consultant to persuade “employees” concerning the exercise of their right toorganize.By its terms it is not limited to any particular employees, but applies to all.Therefore,itisnotmaterialthattheemployeeswereemployedbyAPlantandnotbyXandY,sincesection203(a) (4) does not limit the reporting obligation to agreements or arrangements of employerswhose employees are affected by the agreements or arrangements.Section 203(a) (2), incontrast,does limit reporting topayments made by anemployer to “his employees.”
Accordingly, if Xand Yare employers within the meaning of section 3(e) of the Act, theyarerequiredtoreportthe“agreementorarrangement”withCpursuanttosection203(a)(4) and,
asaconsequence,Cwouldberequiredtoreportpursuanttosection203(b)(1).

257.400CO-EXTENSIVEREPORTINGOBLIGATION

The agreements and arrangements covered by section 203(a) (4) and (5) and those coveredby section 203(b) are substantially co-extensive.Also the provisions of section 203(c) areapplicable in equal fashion under section 203(a) and (b).Thus, to the extent that an employer isunder the obligation to file a report under section 203(a) (4) and (5), a labor relations consultantwhoisapartyto thoseactivitieswouldhavetofilethereportsrequiredbysection203(b).

257.500AGREEMENTWITHARTISTTOPREPAREANTI-UNIONCARTOONS

XEmployer was engaged in labor dispute with YUnion.Xcommissioned an artist toprepare a series of cartoons which he (X) adopted as his own and used to express his views inconnection with the labor dispute.These anti-union cartoons appeared as advertisements undertheemployer’s name in local newspapersduringtheperiodofthedispute.
Since the sentiments conveyed by the advertisements are those of the employer, not the artist,no report is required from the employer pursuant to section 203(a) (4) and (5) with respect to theagreementbetween the employer andthe artist.
Similarly, no report is required from the artist pursuant to section 203(b)(1) with respect tosaid agreement because his services are ministerial in nature and represent only a technical stepinthe progress ofthe employer’s message fromhis own mind tothe finished advertisement.