Olms interpretative Manual

PRIVATEDISCLOSURE:UNIONSTOMEMBERS

270.001LMRDA,SECTION201(c)

Every labor organization required to submit a report under this title shall make availablethe information required to be contained in such report to all of its members, and every suchlabororganizationandits officersshallbeunderadutyenforceableatthesuitofanymemberofsuch organization in any State court of competent jurisdiction or in the district court of theUnited States for the district in which such labor organization maintains its principal office, topermit such member for just cause to examine any books, records, and accounts necessary toverifysuchreport...

270.002See29 CFR402.10, 403.8, 408.11

*270.003RIGHTSONLYFORMEMBERS

The rights under section 201(c) are granted only to members of the labor organization,notto employers or others who are not members.

(TechnicalRevisions:Dec.2016)

270.005DEFINITIONOF“VERIFY”

As used in section 201(c), “verify” means to check generally on the accuracy orcompletenessof a statement or statements.

Rekantv.Rabinowitz, 194F.Supp. 194,195(E.D. Pa.1961), 48LRRM2157.

(TechnicalRevisions:Dec.2016)

WHATUNIONMUSTMAKEAVAILABLETOMEMBERS

*272.005INSPECTIONOFCONSTITUTIONANDBYLAWS

Section 201(a) of the LMRDA requires every labor organization covered by the Act toadopt a constitution and bylaws and to file a copy thereof with the Secretary of Labor togetherwithareportcontainingspecifiedinformation.Section402.2oftheregulations(29CFR402.2)requires that this information be submitted on Form LM-1, Labor Organization InformationReport,andmakestheconstitutionandbylawsa partofthis report.

The information contained in this report is required to be made available to all membersof the labor organization pursuant to section 201(c) of the LMRDA.Since the constitution andbylaws of a labor organization are a part of that report, they must be made available to all of thelabororganization’s members.(See 29 CFR 402.10).

The LMRDA does not, however, require a union to furnisha copy of its constitution andbylaws to each member.The law requires only that the union permit each member anopportunitytoexaminesuchdocumentsat a reasonable time and place.

272.100COPIES OFREPORTS

Labor organizations are not required to supply copies of their reports to their members; itis sufficient for the unions to maintain copies of such reports at their principal office and to allowtheirmembers an equal opportunityto inspect and examine them.

272.200METHODSOFDISSEMINATION

The requirements of section 201(c) could be satisfied by various alternative methodsincluding, among others, the mailing of copies of their reports to all members, publication of thereport in the union paper, or (in the case of local unions) the posting of a copy in a conspicuousplace at the union headquarters and meeting hall, and announcing at a regular meeting that copiesare ready for distribution to all members.It would appear, however, that a union that does notmailtheinformationtoallitsmembersisrequired,atleast,tomaketheinformationavailableat

areasonabletimeandplaceandtonotifythemembershipthatthe informationisavailable.

272.300DISCIPLINEDMEMBERS

Since section 201(c) requires labor organizations to make certain information available to“all of its members,” a union may not deny requests by disciplined members to inspect theserecordsor reports.

(Revised:Dec.2016)

272.400MINUTESOFMEETINGS

Section 201(c) requires that, “for just cause,” labor organizations must permit anymember to examine any books, records and accounts necessary to verify the reports required bysection201.Consequently,theminutesofanymeetingswhichcontainstatementsbearingontheinformationcontained in these reportsmustbe available for inspection.

272.500USEOFAUDITORTOINSPECTBOOKS

The United States Court of Appeals forthe Fifth Circuit, in answering the unionargument that the right of inspection of the books and records of the union is personal only to themembersandthat theymaynotbeassistedbyanauditor,statesinpertinentpart:

“The Act is silent on this question but the general law on the subject as it applies to theinspection of corporate books by a stockholder is both analogous and clear.In Finance Co.ofAmerica at Baltimorev. Brock, 80F. 2d 713(5thCir.1936),thiscourtpointedout:

. . . ‘It is well settled in Louisiana that stockholders have the right at reasonable times andplaces and for proper purposes to examine the books and papers of the corporation and tohavetheassistanceofaccountantsinsodoing...Thisisthelawgenerally’

80F.2dat714.

“Thisaccordswiththegeneralrulesetoutin13Am.Jur.Corporations§438:

‘While the right to inspect the books of a corporation is, in a sense, personal to thestockholder, it is very generally held to include the right to have the assistance of askilled agent, such as an attorney, accountant, or stenographer, if the stockholder desiressuch assistance.The possession of the right would be futile if the possessor through lackof knowledge necessary to its exercise were debarred of the privilege to procure in hisbehalfthe servicesof onecompetenttoexerciseit.’

“Here those seeking the right of inspection are longshoremen, unversed in financial recordsand accounting methods.The right to inspect would be utterly meaningless if it runs only tothem.This is remedial legislation and our view is that Congress intended to create both aright and a remedy, with the remedy to be fashioned by the courts, where as here controversyobtains, with the end in view of giving force and meaning to the right when, and only when,goodcause is shown.”

LocalNo. 1419, ILA,General Longshore WorkersUnionv. Smith,301 F.2d 791, 796(5th Cir.
1962), 49 LRRM 3108.See also Campbell v. Transport Workers Union of America, 1996 WL131096. 151 LRRM 2837 (E.D.Pa.1996) (unpublished decision in which judge ordered localunion and its officers to permit union member and his accountant to review the union’s financialrecords). For updated citation, see18A Am. Jur. 2d Corporations § 331 (“While the right toinspect the books of a corporation is, in a sense, personal to the stockholder, it is very generallyheld to include the right to have the assistance of a skilled agent, such as an attorney, accountant,or stenographer, if the stockholder desires such assistance.The corporation cannot dictate to thestockholder whom he or she will employ to assist him or her in inspecting the books; nor can itrefuse to submit its books for inspection on the ground that the attorney employed to aid thestockholder is inimical to it. The right of the average stockholder to use an expert is undeniablebecause most stockholders are incapable of understanding the books and records of an extensivebusiness without taking an unreasonable time to study them. However, if a stockholderunderstands the books and records that he or she seeks to inspect, then there is no need for expertassistance, and the burden is on the stockholder to show the necessity for such expertassistance.”).

August,1968(TechnicalRevisions:Dec.2016)