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Employment Law Guide

Other Workplace Standards: Union Officer Elections and Financial Controls

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Updated: December 2016

Labor-Management Reporting and Disclosure Act of 1959, (LMRDA) as amended
(29 USC §401 et seq.;(http://www4.law.cornell.edu/uscode/29/401.html) 29 CFR Parts 401 to 453(https://www.dol.gov/dol/cfr/Title_29/Chapter_IV.htm))

Who is Covered

The Labor-Management Reporting and Disclosure Act of 1959, as amended (LMRDA), is administered by the Office of Labor-Management Standards (OLMS). The LMRDA covers unions, officers and employees of unions, union members, employers, labor relations consultants, surety companies, trusts in which a union is interested, and other "persons" as defined in the LMRDA who may be covered by particular provisions of the Act.

The LMRDA also covers unions representing U.S. Postal Service employees by virtue of the Postal Reorganization Act of 1970 and unions representing Federal employees through Section 7120 of the Civil Service Reform Act, and its implementing regulations. The LMRDA does not cover unions composed solely of state and local government employees.


Basic Provisions/Requirements

The LMRDA consists of seven titles

  • Title I, the "Bill of Rights," sets forth certain basic rights that Congress believed Federal law should guarantee to union members. These rights are set forth under the "Employee Rights" section below. Members may enforce these rights through private suit in Federal district court. (Note: Federal-sector union members can bring a complaint to OLMS.) The Secretary of Labor also has enforcement responsibilities with regard to an employee's right to receive and inspect a collective bargaining agreement.
     
  • Title II requires unions to file an information report (Form LM-1), copies of their constitution and bylaws, and annual financial reports (Form LM-2, LM-3, or LM-4) with OLMS. The reports and documents filed with OLMS are public information, and any person may examine them or obtain copies at OLMS offices.

    Officers and employees of unions must file a Form LM-30 with OLMS if they have any loans or benefits from, or certain financial interests in, employers whose employees their union represents and businesses that deal with their union. Employers who enter into such an agreement or engage in certain specified activities or financial dealings with their employees, union, union officers, or labor relations consultants must file a Form LM-10.
    • Labor relations consultants, who enter into an agreement with an employer to persuade employees about their union activities, or to supply certain information to the employer, must file a Form LM-20, Agreement and Activities Report, and a Form LM-21, Receipts and Disbursements Report.

      Finally, surety companies that issue bonds required by the LMRDA or the Employee Retirement Income Security Act of 1974 (ERISA) must file a Form S-1 to report data such as premiums received, total claims paid, and amounts recovered. The Secretary of Labor has authority to enforce the reporting requirements of the Act.
       
  • Title III concerns the imposition of trusteeships over subordinate unions. A parent union may impose a trusteeship only for a purpose specified in the LMRDA, and it must establish and administer the trusteeship in accordance with its own constitution and bylaws. A parent union that places a subordinate union in trusteeship must file initial, semiannual, and terminal trusteeship reports (Forms LM-15, LM-15A, and LM-16).

    Under the LMRDA, the parent union may not engage in certain specified acts involving the funds and delegate votes from a union under trusteeship. The Secretary of Labor has the authority to investigate and enforce alleged violations of Title III, and a union member or subordinate union may also enforce the provisions of this title, except for the reporting requirements, through private suit in Federal district court. Properly imposed trusteeships are presumed to be valid for a period of 18 months and are presumed to be invalid after that period.
     
  • Title IV establishes standards for elections of union officers. Among other things, local unions must elect their officers by secret ballot; national and international unions and intermediate bodies must elect their officers either by secret ballot of the members or by delegates chosen by secret ballot. Title IV requires elections to be held by national and international unions at least every five years; intermediate bodies at least every four years; and local unions at least every three years.

    Unions and employers may not use their funds to promote the candidacy of any candidate, although union funds may be used to conduct an election. A union member in good standing has the right to nominate candidates, be a candidate subject to reasonable qualifications uniformly imposed, hold office, and support and vote for the candidates of the member's choice. Unions must mail a notice of election to every member at the member's last-known home address at least 15 days before the election.

    A union member has the right under Title IV to file a complaint with OLMS regarding the conduct of a union officer election within one calendar month after meeting certain conditions.  Before filing an election complaint with OLMS, a member must have either exhausted internal election remedies within the union, or pursued them for three months without obtaining a final decision from the union.  The Secretary of Labor has authority to file suit in a Federal district court to set aside an invalid union election and to request a new election under the supervision of the Secretary.
     
  • Title V provides a number of safeguards for unions. Union officers have a duty to manage the funds and property of the union solely for the benefit of the union in accordance with its constitution and bylaws. A union may not have outstanding loans to any one officer or employee that exceed $2,000. Union officials who handle union funds or property must be bonded to provide protection against losses.

    A union officer or employee who embezzles or otherwise misappropriates union funds or other assets commits a Federal crime punishable by a fine and/or imprisonment. Persons convicted of certain crimes, including a violation of Title II or III of the LMRDA may not hold union office or employment for up to 13 years after conviction or the end of imprisonment
     
  • Title VI includes the authority to investigate (see "Penalties/Sanctions" below); a prohibition on a union fining, suspending, expelling, or otherwise disciplining members for exercising their rights under the LMRDA; and a prohibition on the use or threat of force or violence to interfere with a union member in the exercise of LMRDA rights.
     
  • Title VII amends the Labor Management Relations Act (LMRA), otherwise known as the Taft-Hartley Act, concerning strikes, boycotts, and picketing. The National Labor Relations Board (NLRB)(http://www.nlrb.gov/), an independent Federal agency, administers the LMRA.
     

Employee Rights

Title I of the LMRDA guarantees certain rights to all union members. These include the right to nominate candidates, to vote in elections or referendums, to attend membership meetings, and to participate in the deliberations and vote upon the business of such meetings, subject to reasonable rules and regulations in the organization's constitution and bylaws.

They also include the right to meet and assemble freely with other members, to express any views, arguments, or opinions, and to express views at meetings about candidates in an election of the labor organization or about any business properly before the meeting, subject to the organization's established and reasonable rules pertaining to the conduct of meetings. Additional rights outlined in Title I address dues, initiation fees and assessments, protection of the right to sue, and safeguards against improper disciplinary action.


Recordkeeping, Reporting, Notices and Posters


Notices and Posters

Recordkeeping

Every labor organization subject to the LMRDA, the Civil Service Reform Act (CSRA), or the Foreign Service Act (FSA) must file a financial report (Form LM-2, LM-3, or LM-4) each year with OLMS, and the underlying records must be maintained. The recordkeeping requirements for each financial report, as well as other required reports, are explained below. For each of these reports, the underlying records must be kept for at least five years after the date the report is filed. Any record necessary to verify, explain, or clarify the report must be retained, including, but not limited to, vouchers, worksheets, receipts, and applicable resolutions, and any electronic documents, including recordkeeping software, used to complete, read, and file the report.

Form LM-1, Labor Organization Information Report. The officers required to file Form LM-1 are responsible for maintaining records which must provide in sufficient detail the information and data necessary to verify the accuracy and completeness of the report. There are penalties for willfully making any false entry in or concealing, withholding, or destroying any books, records, or statements required to be kept.

Forms LM-2, LM-3, and LM-4, Labor Organization Annual Reports. The officers required to file Form LM-2, LM-3 or LM-4 are responsible for maintaining records which will provide in sufficient detail the information and data necessary to verify the accuracy and completeness of the report.

Form LM-30, Labor Organization Officer and Employee Reports. The individual required to file Form LM-30 is responsible for maintaining records which must provide in sufficient detail the information and data necessary to verify the accuracy and completeness of the report.

Form LM-10, Employer Report. The individuals required to file Form LM-10 are responsible for maintaining records which will provide in sufficient detail the information and data necessary to verify the accuracy and completeness of the report.

Forms LM-20 and 21 (Recordkeeping Requirements for Labor-Relations Consultants). The individual(s) required to file Forms LM-20 and LM-21 are responsible for maintaining records which will provide in sufficient detail the information and data necessary to verify the accuracy and completeness of the report.

Form S-1. The individuals required to file Form S-1 are responsible for maintaining records which must provide in sufficient detail the information and data necessary to verify the accuracy and completeness of the report. The records must be maintained for at least five years after the date the report is filed. Any record necessary to verify, explain, or clarify the report including, but not limited to, vouchers, worksheets, receipts, and applicable resolutions, must also be maintained.


Reporting

Every labor organization subject to the LMRDA, CSRA, or FSA must file a financial report, Form LM-2, LM-3, or LM-4, each year with OLMS. Other types of reports are required in specific situations; descriptions of these reports are detailed below.

Pursuant to the LMRDA, the U.S. Department of Labor is required to make all submitted reports available for public inspection. These reports are available on the OLMS website.

Form LM-1 (Labor Organization Information Report). The LMRDA and the CSRA regulations require that every covered union adopt a constitution and bylaws and file two copies with OLMS, along with a Labor Organization Information Report, Form LM-1.  The initial Form LM-1 must report certain information concerning the structure, practices, and procedures of the labor organization.  Labor organizations must file the Form LM-1 within 90 days after the date they become subject to the LMRDA, CSRA, or FSA.

Labor organizations are required to file an amended Form LM-1 to update the information on file with OLMS if there are any changes in the practices and procedures listed in Item 18, Column (2) of its most recent Form LM-1. These are changes in practices and procedures which are not contained in the labor organization's constitution and bylaws. The amended Form LM-1 must be filed with the organization's annual financial report for the reporting period in which the change occurred.

Form LM-2 (Financial report). Every labor organization with total annual receipts of $250,000 or more must file the Form LM-2. The form includes the organization's assets, liabilities, receipts, salaries, loans, and other disbursements to officers and employees of more than $10,000. When determining if the $250,000 threshold has been met, include all financial receipts of the labor organization during its fiscal year, including receipts of any special funds, such as "subsidiary organization," defined as an entity that is wholly owned, wholly controlled, and wholly financed by the labor organization. Form LM-2 must be filed electronically.

Certain labor organizations are required to file Form 990(http://www.irs.gov/instructions/i990ez/index.html), Return of Organization Exempt from Income Tax, with the Internal Revenue Service (IRS). The IRS has accepted a copy of the labor organization's Form LM-2 in the past to provide some of the information required by Form 990. Filing the Form LM-2 with the IRS does not satisfy the labor organization's reporting requirement with the U.S. Department of Labor.

The Form LM-2 must be filed within 90 days after the end of the organization's fiscal year (12-month reporting period).

If the organization went out of existence during its fiscal year, a terminal financial report must be filed within 30 days after the date it ceased to exist. A terminal financial report must be filed if the labor organization has gone out of business by disbanding, merging into another organization, or being merged and consolidated with one or more labor organizations to form a new labor organization. The last president and treasurer, or the officials responsible for winding up the affairs of the labor organization, must file a terminal financial report for the period from the beginning of the fiscal year to the date of termination. A terminal financial report is not required if the labor organization changed its affiliation but continues to function as a separate reporting labor organization. In addition to initial and semiannual trusteeship reports, the organization imposing the trusteeship is required to file an annual financial report on Form LM-2 on behalf of the trusteed organization. The Form LM-2 is due within 90 days after the end of the trusteed organization's fiscal year and must report the financial activities of the entire fiscal year. If the trusteeship was imposed during the subordinate labor organization's fiscal year, the first report must cover the period prior to the imposition of the trusteeship as well as the financial transactions occurring during the trusteeship. A terminal trusteeship financial report on Form LM-2 is also required within 90 days after the date that the trusteeship is terminated.

Any Form LM-2 filed on behalf of a trusteed organization must include the signatures of the trustees, in addition to the signatures of the president and treasurer or corresponding principal officers of the organization which established the trusteeship.

Form LM-3 (Financial report). Labor organizations with total annual receipts of less than $250,000 may file the simplified annual report Form LM-3, if not in trusteeship. Labor organizations with greater annual total receipts and those in trusteeship must file the more detailed Form LM-2.

The Form LM-3 must be filed within 90 days after the end of the organization's fiscal year (12-month reporting period).

If the organization goes out of existence during its fiscal year and the organization's total annual receipts were less than $250,000 for the part of the last fiscal year during which the organization existed, a Form LM-3 must be filed within 30 days after the date it ceased to exist. If total annual receipts were more than these limits, the organization must use Form LM-2 to file its terminal financial report. A terminal financial report must be filed if the labor organization has gone out of business by disbanding, merging into another organization, or being merged and consolidated with one or more labor organizations to form a new labor organization. The last president and treasurer, or the officials responsible for winding up the affairs of the labor organization, must file a terminal financial report for the period from the beginning of the fiscal year to the date of termination. A terminal financial report is not required if the labor organization changed its affiliation but continues to function as a separate reporting labor organization.

Form LM-4 (Financial report). If it is not in trusteeship, labor organizations with total annual receipts of less than $10,000 may file the abbreviated 2-page annual report Form LM-4. The term "total annual receipts" means all financial receipts of the labor organization during its fiscal year, regardless of the source, including receipts of any subsidiaries and any special funds.

The Form LM-4 must be filed within 90 days after the end of the labor organization's fiscal year (12-month reporting period).

If the organization goes out of existence during its fiscal year, a terminal financial report must be filed within 30 days after the date it ceased to exist. A terminal financial report must be filed if the labor organization has gone out of business by disbanding, merging into another organization, or being merged and consolidated with one or more labor organizations to form a new labor organization. The last president and treasurer, or the officials responsible for winding up the affairs of the labor organization, must file a terminal financial report for the period from the beginning of the fiscal year to the date of termination. A terminal financial report is not required if the labor organization changed its affiliation but continues to function as a separate reporting labor organization.

A terminal financial report may be filed on Form LM-4 if the labor organization filed its previous annual report on Form LM-4 and the labor organization's total annual receipts were less than $10,000 for the part of the last fiscal year during which the labor organization existed.

Form LM-30 (Union officers and employees). The LMRDA requires public disclosure of certain financial transactions and financial interests of labor organization officers and employees and their spouses and minor children. Every labor organization officer or employee (other than an employee performing clerical or custodial services exclusively) who has engaged in any such transaction or has any such interest during the fiscal year must file a detailed report with the Secretary of Labor.

The reporting requirements only relate to the disclosure of specified financial transactions and interests. The reporting requirements do not address whether such economic interests are lawful or unlawful. The fact that a particular financial transaction or interest is or is not required to be reported is not indicative of whether it is or is not subject to any legal prohibition; this must be tested by provisions of law other than those prescribing the reports.

The types of financial transactions and interests which must be reported can be found in the Form LM-30 and include:

  • Legal and equitable interests in, transactions with, and economic benefits from an employer whose employees his/her union represents or seeks to represent
  • Legal and equitable interests in, transactions with, and economic benefits from certain businesses which deal with the business of the employer whose employees the union represents or seeks to represent, or which deals with the union or a trust in which the labor organization is interested
  • Certain income and other economic benefits received from certain other employers or labor relations consultants

The completed Form LM-30 can be submitted electronically at no cost via the OLMS Electronic Forms System (EFS). Alternatively, the completed, signed form and any additional pages must be mailed to the following address:

U.S. Department of Labor
Office of Labor-Management Standards
200 Constitution Avenue, NW, Room N-1519
Washington, DC 20210

Form LM-10 (Employer). The LMRDA requires public disclosure of specific financial transactions or arrangements made between an employer and one or more of the following: a labor organization, union official, employee, or labor relations consultant. Every employer who has engaged in any such transaction or arrangement during the fiscal year must file a detailed report with the Secretary of Labor within 90 days after the end of the employer's fiscal year. An employer required to file must complete only one Form LM-10 each fiscal year that covers all instances of reportable activity even if activity occurs at multiple locations.

These reporting requirements only relate to the disclosure of specified payments. The reporting requirements do not address whether specific payments, transactions, or arrangements are lawful or unlawful. The fact that a particular payment, transaction, or arrangement is or is not required to be reported does not indicate whether it is or is not subject to any legal prohibition.

The types of financial transactions, arrangements, or expenditures which must be reported are set forth in Form LM-10. The report must include the following: (1) the date of each arrangement and the date and amount of each transaction; (2) the name, address, and position of the person with whom the agreement or transaction was made; and (3) a full explanation of the circumstances of all payments made, including the terms of any agreement or understanding pursuant to which they were made.

The completed Form LM-10 and any additional pages must be mailed to the following address:

U.S. Department of Labor
Office of Labor-Management Standards
200 Constitution Avenue, NW, Room N-1519
Washington, DC 20210

Form LM-20 (Labor Relations Consultant Agreement and Activities Report). Every person, including a labor relations consultant, who enters into an arrangement with an employer under which he or she undertakes activities where an object thereof is, directly or indirectly, to persuade employees about exercising their rights to organize and bargain collectively, or to obtain information about the activities of employees or a union in connection with a labor dispute involving the employer (except information solely for administrative, arbitral, or court proceedings) must file an Agreement and Activities Report, Form LM-20.

These reporting requirements only relate to the disclosure of specific agreements, arrangements, and/or activities. The reporting requirements do not address whether such agreements, arrangements, or activities are lawful or unlawful. The fact that a particular agreement, arrangement or activity is or is not required to be reported does not indicate whether it is or is not subject to any legal prohibition.

Any person who, as a direct or indirect party(/elaws/firststep/glossary.htm?glossary_word=party) to any agreement or arrangement with an employer, undertakes, pursuant to the agreement or arrangement, any activity of this type must file a Form LM-20. A "person" is defined to include, among others, labor relations consultants and other individuals and organizations. A person "undertakes" activities not only when he/she performs the activity but also when he/she agrees to perform the activity or to have them performed.

The information required to be reported on Form LM-20 includes: (1) the party or parties to the agreement or arrangement; (2) the object and terms and conditions of the agreement or arrangement; and (3) the activities performed or to be performed pursuant to the agreement or arrangement.

Each person who has entered into any agreement or arrangement to undertake activities described in the form must file the report within 30 days after entering into such agreement or arrangement. Any changes to the information reported in Form LM-20 (excluding matters related to Item 11.c.) must be filed in a report clearly marked "Amended Report" within 30 days of the change.

The completed Form LM-20 and any required attachments and additional pages must be mailed to the following address:

U.S. Department of Labor
Office of Labor-Management Standards
200 Constitution Avenue, NW, Room N-1519
Washington, DC 20210

Form LM-21 (Labor Relations Consultant - Receipts and Disbursements Report). Any person required to file Form LM-20 must also file Form LM-21, Receipts and Disbursements Report for each fiscal year during which payments were made or received as a result of any agreement or arrangement described in Form LM-20.

Form LM-15 (Trusteeship). The LMRDA, CSRA and FSA require public disclosure of certain matters pertaining to a trusteeship which a labor organization imposes on a subordinate body. Every labor organization which has established a receivership, trusteeship, or other method of supervision or control, suspending the autonomy otherwise available to a subordinate labor organization under its constitution or bylaws, must file trusteeship reports with OLMS.

A Trusteeship Report, Form LM-15, is required whenever supervision or control has been employed which has the effect of suspending any right which a subordinate labor organization otherwise has to carry on its own affairs. Suspension of autonomy will ordinarily include any method of supervision or control which (1) interferes with or restricts the functions of the officers of the subordinate labor organization; (2) prevents the members of the subordinate labor organization or, in the case of an intermediate body, their elected delegates from electing officers; (3) prevents the members or delegates of the subordinate labor organization from participating in the business of the organization which may be transacted at regular or special meetings; or (4) otherwise interferes with the autonomy of the subordinate labor organization; all as provided in the constitution and bylaws or other pertinent documents, and the practices and procedures developed thereunder, of both the organization which has established the trusteeship and the subordinate labor organization.

An initial Form LM-15 must be filed when a parent body imposes a trusteeship on a subordinate body. Form LM‑15 reports must also be filed semiannually for the duration of the trusteeship.

Form LM-15A(https://www.dol.gov/agencies/olms/regs/compliance/GPEA_Forms/blanklmforms#FLM15a) (Report on Selection of Delegates and Officers). Form LM-15A must be filed with the initial or semiannual trusteeship report, Form LM-15, or the terminal trusteeship report, Form LM-16. A Report on Selection of Delegates and Officers, Form LM-15A, must be filed with an initial, semiannual, or terminal trusteeship report if, during the period covered by the report, (1) any convention or other policy-determining body met to which the trusteed labor organization sent delegates or would have sent delegates if not in trusteeship; or (2) the labor organization which imposed the trusteeship over the subordinate organization held an election of officers. Form LM-15A, if required, must be filed with the initial or semiannual trusteeship report, Form LM-15, or the terminal trusteeship report, Form LM-16.

Form LM-16(https://www.dol.gov/agencies/olms/regs/compliance/GPEA_Forms/blanklmforms#FLM16) (Terminal Trusteeship Report). A Terminal Trusteeship Report, Form LM-16, must be filed (along with a Labor Organization Annual Report, Form LM-2) within 90 days after the date that the trusteeship is terminated. The terminal trusteeship report must be filed whether the trusteeship is terminated because the subordinate labor organization is restored to the autonomy otherwise available to it under its constitution and bylaws and the constitution and bylaws of the labor organization which has imposed the trusteeship or because the subordinate labor organization loses its reporting identity through dissolution, merger, consolidation, or otherwise.

Form S-1(https://www.dol.gov/agencies/olms/regs/compliance/GPEA_Forms/blanklmforms#FLMS1) (Surety Company Annual Report). The LMRDA requires public disclosure of financial information from any surety company which issues a bond required by the LMRDA or the Employee Retirement Income Security Act of 1974 (ERISA). Form S-1 must be filed by any surety company having a bond in force which insures the following: 1) a welfare or pension plan covered by ERISA; or 2) any labor organization or trust in which a labor organization is interested. Filers must retain the records necessary to verify the reports for at least five years.

Each surety company is required to file the Form S-1, Surety Company Annual Report(https://www.dol.gov/agencies/olms/regs/compliance/GPEA_Forms/blanklmforms#FLMS1) (and any required attachments and additional pages) within 150 days after the end of its fiscal year, to the national office of OLMS. The LMRDA requires Department of Labor make all submitted forms available for public inspection.


Penalties/Sanctions

Section 601(a) of the LMRDA authorizes the Secretary of Labor to investigate "in order to determine whether any person has violated or is about to violate" any provisions of the Act (except the Bill of Rights of Union Members and amendments made by the LMRDA to other laws), and to "enter such places and inspect such records and accounts and question such persons" as may be necessary to determine whether a violation has occurred. The Secretary may issue subpoenas to compel testimony or to obtain records and other materials needed to complete an investigation.

The Secretary may file civil actions in Federal district court to restrain or correct violations and to bring about compliance with the LMRDA. The embezzlement of union funds is subject to a fine of up to $250,000 and/or imprisonment up to five years. Criminal penalties also apply to other Title V provisions as well as to certain reporting violations under Titles II and III.


Relation to State, Local, and Other Federal Laws

Federal laws related to the LMRDA include the National Labor Relations Act of 1935; the Taft-Hartley Act of 1947; the Racketeer-Influenced and Corrupt Organizations (RICO) Act; the Service Contract Act; and the Civil Service Reform Act of 1978.


Compliance Assistance Available

Additional compliance assistance materials appear on the OLMS Home Page(https://www.dol.gov/agencies/olms/).  OLMS field office staff members are available to answer questions about the LMRDA and to help individuals and organizations affected by the law.

The OLMS National Office Public Disclosure Room has copies of all reports and documents filed with OLMS. Additional information about the LMRDA, including blank reporting forms and compliance assistance publications, is available through the OLMS Union Reports Web site. Additional information about the LMRDA, including blank reporting forms and compliance assistance publications, is available through the OLMS Web site, as well as the OLMS National and field offices.

The Department of Labor provides labor organizations, employers, union members, and others with clear and easy-to-access information and assistance on how to comply with the Labor-Management Reporting and Disclosure Act. Among the many resources available are:

Additional compliance assistance, including explanatory brochures, fact sheets, and regulatory and interpretive materials, is available on the Compliance Assistance "By Law" webpage.


DOL Contacts

Office of Labor-Management Standards (OLMS)
E-mail: OLMS-Public@dol.gov
Tel: 202-693-0123; TTY: 1-877-889-5627;
OLMS Electronic Forms Software technical support: 1-866-401-1109

The Employment Law Guide is offered as a public resource. It does not create new legal obligations and it is not a substitute for the U.S. Code, Federal Register, and Code of Federal Regulations as the official sources of applicable law. Every effort has been made to ensure that the information provided is complete and accurate as of the time of publication, and this will continue.

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UNITED STATES
DEPARTMENT OF LABOR