In the late 1950s, organized crime had infiltrated the labor movement. In order to combat organized crime, in 1959 Congress passed the Labor Management Reporting and Disclosure Act (LMRDA). The Act required those unions and companies which were influenced by outside organizations to file reports with the Department of Labor listing who these “persuaders” were and how much they are paid. The law applied to both labor unions and companies—and not just union companies, but also companies which were not unionized, as long as they were “persuading” people, or giving advice on labor-management issues.
For over 50 years, until 2012, the law remained a backwater, creating few problems because it addressed a problem which no longer existed. No one asserted that organized labor is substantially controlled by organized crime anymore. Enter the Obama Administration.
In 2011 the Obama Administration saw an opportunity to promote union membership in every company in the United States—even small companies, companies in Right-to-Work states, and companies with stellar employee-management relations—and it would do so by amending NOT the LMRDA, which can only be amended by Congress, but instead by changing the REGULATIONS which interpret the LMRDA which can be changed by the Department of Labor through a process known as “rulemaking.”
So, the Obama Administration has proposed new “REGULATIONS” which will effectively requires every big and small company in the United States to files forms, known as LM-20s, every time it writes or amends an employee handbook with the help of an outside adviser, like a lawyer.
The cost to employers? Billions. Literally billions of dollars. Not only that, the statute include criminal penalties, so employers big and small will now need to hire lawyers to tell them when they need to file reports.
You may have heard the term “The Administrative State.” The phrase was first coined by the United States Supreme Court and what it means is that administrative agencies can now re-write laws passed by Congress by simply re-interpreting them. Their re-interpretations are entitled to a high level of “deference” by Courts because the “agencies are the experts” on what they need to regulate an industry. Here is a good example of the Administrative State at work.
Want to see what the law was as Congress passed it? Here it is:
(b) Persuasive activities relating to the right to organize and bargain collectively; supplying information of activities in connection with labor disputes; filing and contents of report of agreement or arrangement
Every person who pursuant to any agreement or arrangement with an employer undertakes activities where an object thereof is, directly or indirectly—
(1) to persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing; or
(2) to supply an employer with information concerning the activities of employees or a labor organization in connection with a labor dispute involving such employer, except information for use solely in conjunction with an administrative or arbitral proceeding or a criminal or civil judicial proceeding;
shall file within thirty days after entering into such agreement or arrangement a report with the Secretary, signed by its president and treasurer or corresponding principal officers, containing the name under which such person is engaged in doing business and the address of its principal office, and a detailed statement of the terms and conditions of such agreement or arrangement.
Every such person shall file annually, with respect to each fiscal year during which payments were made as a result of such an agreement or arrangement, a report with the Secretary, signed by its president and treasurer or corresponding principal officers, containing a statement
(A) of its 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 with such services and the purposes thereof. In each such case such information shall be set forth in such categories as the Secretary may prescribe.