9-138.010
Introduction
Section 504 prohibits persons convicted of certain crimes from
being employed as labor union officials, corporate employees
engaged in labor-management relations, and as labor relations
consultants. The statute applies only to labor unions and employers
in the private sector which are regulated by the Labor-Management
Reporting and Disclosure Act (LMRDA) (29 U.S.C. § 401,
et seq.).
Section 1111 prohibits persons convicted of certain crimes from
being employed by employee pension or welfare benefit plans
regulated by the Employee Retirement Income Security Act (ERISA)
and as consultants to such plans. See 29 U.S.C.
§ 1001, et seq. Convicted individuals are
disqualified automatically by operation of the statute upon
sentencing.
See also the Criminal Resource Manual at
2442.
9-138.020
Investigative and
Supervisory Jurisdiction
For information on investigative jurisdiction in 29 U.S.C.
§§ 504 and 1111 cases, see the
Criminal Resource Manual at 2443. Questions
should be directed to the Labor Management Unit of the Organized
Crime and Racketeering Section, Criminal Division, which has
supervisory authority over these statutes.
9-138.030
Consultation Prior to Prosecution
Prior to instituting grand jury proceedings, as well as seeking
an indictment, or filing an information, under either 29 U.S.C.
§ 504 or 29 U.S.C. § 1111, consultation is required
with the Criminal Division through the Labor-Management Unit of the
Organized Crime and Racketeering Section. Because the underlying
purpose is to eliminate undesirable persons from the labor movement
in the case of 29 U.S.C. § 504 or from access to or
management of the assets of an employee benefit plan in the case of
29 U.S.C. § 1111, a procedure of notification prior to
proceeding with criminal prosecution has been adopted by the
Criminal Division in certain cases. See the
Criminal Resource Manual at 2444.
In the absence of a clear demonstration of a knowing and
intentional violation of either statute, the disqualified
individual and the responsible person(s) who permit(s) the
disqualified person to serve in violation of either statute are
notified and given the opportunity to vacate the prohibited
position and avoid prosecution. This policy furthers the remedial
purposes of the statute and has generally resulted in compliance by
the affected individuals. Following consultation with the Criminal
Division, the procedure need not be used where available evidence
indicates that the affected individuals were aware that the
disqualified person's service was prohibited by reason of
conviction at the time such service was rendered. For a discussion
of the elements of the offenses of violating 29 U.S.C.
§§ 504 and 1111, see the
Criminal Resource Manual at 2445 and
2446. For form indictments, see the
Criminal Resource Manual at 2447 and
2448.
It should be noted that convicted organizations are treated
differently from convicted individuals for purposes of the ERISA
disability. Convicted corporations and partnerships are not
automatically disqualified upon sentencing from prohibited service
with employee benefit plans as described in 29 U.S.C.
§ 1111. The Federal sentencing court (or a United States
District court for the district where the disqualifying state crime
was committed) must first determine, after notice to the convicted
organization, the prosecuting attorney, and the Secretary of Labor,
that the convicted organization's service would be inconsistent
with the purposes of the ERISA disability. 29 U.S.C. §
1111(a)(B).
[cited in
USAM 9-130.300;
Criminal Resource Manual 2444]
9-138.040
Consultation Prior to
Relief of Convicted Individuals From Labor-Management and
Pension-Welfare Position Disqualification
The Labor-Management Unit of the Organized Crime and
Racketeering Section recommends that it be consulted by telephone
whenever a United States Attorney's Office learns that a convicted
individual seeks relief from the employment or office holding
disqualifications of 29 U.S.C. §§ 504 or 1111. The
Labor-Management Unit can advise attorneys of the procedures to be
followed in such proceedings and assist in the coordination of
these matters with the Labor Department. The Labor-Management Unit
can assist whenever a convicted individual files in district court
(for disqualifying crimes completed after November 1, 1987) or with
the United States Parole Commission (for disqualifying crimes
committed before that date) an application for exemption from
disqualification in a particular position, moves a sentencing court
for a reduction of the period of disqualification under the
statutes, or whenever such relief is contemplated for inclusion in
a plea or sentencing agreement. See Policy Statement Sec.
5J1.1, United States Sentencing Commission, Guidelines
Manual (Effective June 15, 1988). Moreover, it should be noted
that the Secretary of Labor's statutory rights to notice and
representation in these relief proceedings may not be waived or
negotiated away as a part of plea or sentencing bargains. See the
Criminal Resource Manual at 2449, for
additional information regarding this issue.
[cited in
USAM 9-16.060]
9-138.100
Reduction and Exemption Proceedings
Under 29 U.S.C. § 504 and 29 U.S.C.
§ 1111
In addition to USAM
9-138.130 to 180 below, see the following sections of the
Criminal Resource Manual for a more detailed discussion of the law
relating to reduction and exemption proceedings. | | | | | | | | | | | | | | |