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Table of Contents Trusteeships - Definition &
Requirements
- Trusteeship Defined
- Trusteeship Requirements
Existence of a Trusteeship
- Autonomy Otherwise Available
- Supervision of a Local
- Court-Appointed Receiverships
- Mergers
- Foreign Locals
Establishing a Trusteeship
- Lawful Purposes
- Unlawful Purposes
- Hearing Requirements
Administering a Trusteeship
- Duration of a Trusteeship
- Prohibited Activities
- Applicability of Other Provisions of the LMRDA
Reporting a Trusteeship
- Reports Required
- Signatures Required
- Where to File
- Public Disclosure
- Recordkeeping
- Computer-Generated Forms
Enforcement
- Civil Enforcement
- Criminal Penalties
OLMS Assistance
This page provides general information about the trusteeship requirements
established by the Labor-Management Reporting and Disclosure Act of 1959,
as amended (LMRDA), and the regulations implementing the standards of
conduct provisions of the Civil Service Reform Act of 1978 (CSRA).
The LMRDA applies to labor organizations which represent private sector
employees and U.S. Postal Service employees while the CSRA applies to
labor organizations which represent employees in most agencies of the
executive branch of the Federal Government. (Federal sector labor organizations
subject to the Foreign Service Act or the Congressional Accountability
Act are also subject to the trusteeship requirements.)
Trusteeships are normally established by parent body unions to assist
subordinate unions having operational or financial problems or to restore
democratic procedures. During hearings held prior to the enactment of
the LMRDA, however, Congress became aware that the power to impose a trusteeship
was sometimes used to milk local treasuries and perpetuate
power by controlling votes undemocratically. The LMRDA therefore contains
provisions for civil and criminal enforcement to correct abuses, but it
neither prohibits nor discourages the reasonable and legitimate use of
trusteeships.
This pamphlet was prepared by the Office of Labor-Management Standards
of the U.S. Department of Labor's Employment Standards Administration
to assist those who are subject to the trusteeship provisions of the LMRDA
or CSRA. It presents general information about the trusteeship requirements
and should not be construed as an official interpretation of these laws
or the regulations implementing them.
Trusteeship
Defined |
Section 3(h) of the LMRDA defines a trusteeship as any
receivership, trusteeship, or other method of supervision or control whereby
a labor organization suspends the autonomy otherwise available to a subordinate
body under its constitution or bylaws. The same definition applies
under the CSRA. A labor organization includes any labor union
except a state or local central body or a union representing solely public
employees of a state or political subdivision of a state, such as a county
or municipality. The term subordinate body means subordinate
labor organization. Any trusteeship imposed over a body that meets
the definition of labor organization is subject to the trusteeship
provisions. The most common example of a trusteeship is an international
or national parent body union imposing a trusteeship over a local labor
organization.
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Trusteeship
Requirements |
Title III of the LMRDA:
- Prescribes specific conditions under which a trusteeship may be established
and continued;
- Prohibits the transfer of certain funds to the parent union;
- Prohibits the counting of votes of a trusteed union's delegates in
any convention or election of officers unless the delegates were chosen
by a secret ballot election in which all the members in good standing
were eligible to participate;
- Requires reporting of a trusteeship by the parent union with the Department
of Labor; and
- Provides means of relief for the union member or subordinate union
either directly in court or through the Secretary of Labor.
The CSRA requires any union representing or seeking to represent Federal
employees covered by the Act to comply with trusteeship standards that
conform generally to the principles applied to unions in the private sector.
Therefore, except for certain enforcement procedures, the trusteeship
requirements for unions subject to the CSRA are essentially the same as
those for unions subject to the LMRDA.
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A trusteeship exists whenever a parent union suspends a subordinate
union's constitutional or statutory autonomy; that is, whenever the parent
assumes control over affairs that the subordinate would normally handle
itself. Thus, an action referred to as an administratorship,
stewardship, or supervisorship is a trusteeship
if it involves a suspension of autonomy otherwise available, regardless
of the word used to describe it. Even when the suspension of autonomy
is only partial, a trusteeship exists and is subject to the LMRDA.
Autonomy
Otherwise Available |
The degree of control over its own affairs which a subordinate union
is normally entitled to exercise depends on both the parent union's constitution
and the provisions of the LMRDA.
The LMRDA gives every union a certain measure of autonomy in its elections
and other matters, regardless of whether the parent constitution so provides.
For example, if a parent union deprives any of its subordinates of the
right to elect officers within the period required by the LMRDA, this
action constitutes the imposition of a trusteeship.
A parent union may not suspend the autonomy of all of its subordinates
with respect to the election of officers and delegates and the general
conduct of business. A parent union may, however, uniformly suspend certain
other rights of all subordinates in accordance with its constitution without
creating a trusteeship. For example, when an international president intervened
in a seniority dispute between two merged locals in keeping with a convention
resolution permanently removing the right of all locals to decide similar
disputes, the Department of Labor concluded that there was no suspension
of autonomy otherwise available and, therefore, no trusteeship. If the
removal of this right had not applied to every local, however, the locals
affected by it would normally have been considered under trusteeship. |
Supervision
of a Local |
A parent union's appointment of a supervisor over a local union may
constitute a trusteeship, depending on the kinds of duties the supervisor
performs. If the supervisor merely attends meetings, listens to discussions,
and offers advice, no suspension of autonomy normally occurs. If the supervisor
exercises a degree of control over the local, however, by taking such
action as directing that the local cancel a scheduled meeting or discharge
one of its employees, then the autonomy of the local is suspended and
a trusteeship exists. |
Court-Appointed
Receiverships |
A state court's appointment of a neutral party to manage a union's property
and money when it is the subject of legal action is not considered a trusteeship
because the local's autonomy is suspended by state law and not by a parent
union. |
Mergers
|
The merger of two locals to form a new local or the consolidation of
one local into another does not in and of itself create a trusteeship. |
Foreign
Locals |
The provisions of the LMRDA with respect to the imposition of trusteeships
apply to an international union whose headquarters are located in the
United States when it imposes a trusteeship over a foreign local, because
the international union and its officers in the United States are subject
to the Act. |
Section 302 of the LMRDA states:
Trusteeships shall be established and administered by a labor
organization over a subordinate body only in accordance with the constitution
and bylaws of the organization which has assumed trusteeship over the
subordinate body and for the purpose of correcting corruption or financial
malpractice, assuring the performance of collective bargaining agreements
or other duties of a bargaining representative, restoring democratic procedures,
or otherwise carrying out the legitimate objects of such labor organization.
Lawful Purposes |
Correcting Corruption or Financial Malpractice - Trusteeships
may be imposed to remedy activity that jeopardizes the fiscal integrity
of the union. Correcting financial mismanagement includes difficulties
such as insolvency, failure of the subordinate to maintain proper financial
records, or failure to bond its officers properly. The conduct that may
justify the imposition of a trusteeship can be as serious as embezzlement
of funds by local officers, but it need not be of a criminal nature.
Assuring the Performance of Collective Bargaining Agreements
- A trusteeship may be established to assist a local that is unable to
function as a bargaining representative, whose officers fail to administer
existing agreements properly, or that is unable to offer adequate membership
representation. A trusteeship may also be established because of unauthorized
or wildcat strikes or because of complications arising out
of authorized strikes.
Restoring Democratic Procedures - Trusteeships imposed to restore
democratic procedures include those established because of improper election
procedures, inability to maintain orderly meetings, failure to hold meetings,
coercion of rank and file members, or domination of the subordinate union
by local officers through denial of democratic rights.
Otherwise Carrying Out the Legitimate Objects of the Union -
Congress included this broad purpose because of the difficulty of listing
all the possible circumstances that would justify imposing a trusteeship.
Purposes that have been found valid include:
- Imposing caretaker trusteeships when a subordinate union cannot function
autonomously for reasons such as a plant shutdown or other event that
significantly reduces a local's membership, a lack of experience in
a newly chartered local, or an unexpected loss of leadership;
- Correcting administrative mismanagement, including a local's failure
to carry out the national union's policies or procedures;
- Eliminating racial discrimination and unequal treatment within a local;
- Preventing the destruction of an existing bargaining unit and preserving
the status of a certified bargaining representative;
- Ensuring that a local pays delinquent per capita taxes to its international
when the amount owed was not in dispute and the local, despite having
adequate financial resources, failed to take necessary steps to satisfy
the obligation;
- Securing a local's compliance with an international's directive that
was initiated in good faith to reorganize locals into larger regional
councils; and
- Preventing disaffiliation when the disaffiliation would have a detrimental
impact upon collective bargaining or was combined with other violations
under Title III of the LMRDA.
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Unlawful
Purposes |
A trusteeship is unlawful if it is not established in accordance with
the constitution and bylaws of the parent union or if it is not imposed
for one of the specified purposes listed in section 302 of the LMRDA.
The following examples, taken from court cases, illustrate some of the
purposes that courts have held to be unlawful under certain circumstances:
- A trusteeship imposed because a local was delinquent in paying a per
capita tax increase it was challenging in court;
- A trusteeship imposed to force a local to affiliate with a district
council and to raise dues as a result of the affiliation;
- A trusteeship established in bad faith primarily to maintain the status
quo in the union and to keep the entrenched leadership in power, even
though conditions that had existed in the union for some time would
otherwise have been legitimate grounds for imposing a trusteeship;
- A trusteeship established in fear that union members would elect officials
who are incompetent or corrupt;
- A trusteeship imposed for the sole purpose of preventing disaffiliation;
and
- A trusteeship established for the general purpose of safeguarding
the best interests of the local union, its membership, and the international
union.
In addition, as discussed in the chapter Administering a Trusteeship, the LMRDA specifically
prohibits certain delegate voting and financial activities during a trusteeship,
and any trusteeship imposed for such purposes is unlawful. |
Hearing
Requirements |
If the constitution and bylaws of a parent union provide for a hearing
in connection with the establishment of a trusteeship, then any trusteeship
the union imposes is not valid unless a hearing is held. In addition,
courts have held that regardless of whether the parent union's constitution
so provides, the subordinate union should ordinarily be given a fair hearing,
including notice of the charges and an opportunity to oppose the imposition
of the trusteeship. The hearing, absent an emergency situation, should
be held before the trusteeship is imposed or within a reasonable time
thereafter.
Court decisions vary as to whether a trusteeship should be ruled invalid
when imposed prior to a hearing, absent an emergency situation. Some courts
have ruled that under such circumstances the trusteeship should automatically
be considered invalid, while others have determined that the validity
of the trusteeship is a matter of discretion for the court deciding the
case. |
Duration
of a Trusteeship |
In drafting Title III of the LMRDA, Congress saw the trusteeship as a
temporary administrative remedy that should be used only to correct emergency
situations in subordinate unions. The limited 18-month presumption of
validity for trusteeships in section 304(c) of the LMRDA is further evidence
of Congress' concern that a trusteeship be only a temporary action and
that the parent union and trustee should initiate positive action to remedy
the imposition of the trusteeship as rapidly as possible. This presumption
of validity provides that in any court action, a trusteeship established
in conformity with the parent union's constitution and bylaws and authorized
or ratified after a fair hearing is presumed to be:
- Valid for 18 months from the date of its establishment, except that
the validity may be challenged upon clear and convincing proof that
the trusteeship was not established or maintained in good faith for
a purpose allowable under the LMRDA; and
- Invalid after 18 months, unless the parent union shows by clear and
convincing proof that the continuation of the trusteeship is necessary
for a purpose allowable under the LMRDA.
As indicated in the chapter Reporting a Trusteeship,
the semiannual Form LM-15 report required to be filed with the Department
of Labor by the parent union must detail the specific reasons for continuing
the trusteeship during the preceding 6 months. |
Prohibited
Activities
|
Section 303 of the LMRDA prohibits the transfer of current receipts
or other funds of a subordinate body under trusteeship to the parent union
except for the normal per capita tax and assessments payable by subor
dinate bodies not in trusteeship. This prohibition bars a transfer of
funds from a trusteed subordinate union to any higher body, including
the transfer of funds of a trusteed intermediate body to a higher intermediate
body. It does not, however, prevent the distribution of the assets of
a union in accordance with its constitution and bylaws upon termination.
Legitimate expenses that are not prohibited transfers of funds include:
- Legal fees incurred for defending a trusteeship when the court finds
the trusteeship valid;
- Expenses incurred by a trustee in connection with the supervision
of the subordinate union, if they would be valid if incurred by an officer
of the subordinate union; and
- Legitimate obligations of the trusteed union, such as a deduction
by the international from a trusteed local's share of its checkoff dues
to repay the international for a loan made to the local before the trusteeship
was imposed.
Section 303 of the LMRDA also prohibits counting the votes of delegates
from a trusteed union in any convention or election of officers of the
parent union unless the delegates were chosen by secret ballot in an election
in which all members in good standing of the trusteed union were eligible
to participate. The term convention includes any regular or
special convention of a national or international union or intermediate
body, such as a joint council or conference, and any organized assembly
of delegates from constituent units that meets to act on basic union policy
and in which the delegates represent the interests of the members of their
respective units. This prohibition applies to voting on any issue, not
merely to voting for officers. |
Applicability of Other Provisions of the LMRDA |
The other titles of the LMRDA apply during a trusteeship to the extent
that autonomy is retained by the trusteed union. The reporting requirements
in Title III would necessarily supersede those in Title II, and a trusteeship
that results in a complete suspension of autonomy would normally suspend
the applicability of Title IV (Elections). In a regular election of officers
or an election to terminate the trusteeship, however, the election safeguards
of Title IV must be applied. |
Reports
Required |
A union assuming a trusteeship over a subordinate union must file certain
trusteeship and other reports with the Department of Labor's Office of
Labor-Management Standards (OLMS).
Initial Trusteeship Report - Within 30 days after imposing a
trusteeship over a subordinate union, the parent body must file an initial
Trusteeship Report, Form LM-15, containing the following information:
- The name and address of the subordinate union;
- The date the trusteeship was established;
- Provisions of the constitution which specifically authorize imposition
of the trusteeship;
- A detailed statement of the specific reason or reasons for establishing
the trusteeship;
- Whether a convention met to which the trusteed labor organization
sent delegates or would have sent delegates if not in trusteeship;
- Whether the labor organization imposing the trusteeship held an election
of officers; and
- A full account of the assets and liabilities of the subordinate as
of the time the trusteeship was established.
Semiannual Trusteeship Reports - The parent union must file a
report covering each 6-month period for the duration of the trusteeship.
Reports must be filed semiannually, using Form LM-15 but omitting the
Statement of Assets and Liabilities on page 2 of the form. The first semiannual
report is due within 30 days after the end of the 6-month period following
the establishment of the trusteeship. Thereafter, a report is due within
30 days after the end of each 6-month period following the closing date
of the previous semiannual report. Reports must explain in detail the
reasons for continuing the trusteeship during the preceding 6 months.
Annual Financial Reports - For the duration of the trusteeship,
the parent union must file an annual financial report on Form LM-2 on
behalf of the trusteed subordinate union within 90 days after the end
of the trusteed union's fiscal year. Any Form LM-2 filed on behalf of
a trusteed organization must include the signatures of the president and
treasurer or corresponding principal officers of the parent union and
the trustees of the subordinate union. A Form LM-2 must be used for any
union under trusteeship, even though it might otherwise be eligible to
file its annual report on the shorter Form LM-3 or LM-4.
Terminal Reports - Within 90 days after the termination of the
trusteeship or the loss of identity as a reporting union by the trusteed
union through dissolution, merger, consolidation, or otherwise, the parent
union must file:
- A Terminal Trusteeship Information Report, Form LM-16, disclosing
the date and method of terminating the trusteeship, the names and titles
of the subordinate union's officers, the method of selecting them, and
other information; and
- A terminal financial report on Form LM-2, giving a detailed account
of the subordinate's financial condition at the time of the termination.
Other Reports - The organization imposing the trusteeship is
also responsible for filing an initial or amended Labor Organization Information
Report, Form LM-1, if necessary. The initial Form LM-1 which reports certain
information concerning the structure, practices, and procedures of the
labor organization and two copies of the labor organization's constitution
and bylaws must be filed within 90 days after the date on which the labor
organization becomes subject to the LMRDA.
An amended Form LM-1 must be filed to update the information on file
with OLMS if there have been any changes in the practices and procedures
listed in the latest Form LM-1. An amended Form LM-1, if necessary, must
be filed with the trusteed labor organization's annual financial report,
Form LM-2. (Federal employee labor organizations subject solely to the
CSRA are not required to submit an amended Form LM-1 to describe changes
in their practices and procedures.)
Report on Selection of Delegates and Officers - Form LM-15A must
be filed with the initial, semiannual, and terminal trusteeship reports
if, during the reporting period, there was any:
- Convention or other policy-determining body to which the subordinate
union sent delegates or would have sent delegates if not in trusteeship;
or
- Election of officers of the union which imposed the trusteeship over
the subordinate union.
Form LM-15A must contain detailed information on the representation
of the trusteed union, the method of nominating delegates, the means of
notifying the members about electing the delegates, and the extent of
the delegates' participation in conventions or elections of the parent
union. |
Signatures
Required |
All trusteeship reports must be signed by the president and treasurer
or corresponding principal officers of the parent union and by the trustees
of the trusteed subordinate union. Those who sign the reports are personally
responsible for filing them and for assuring the accuracy of the information
they contain.
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Where to
File |
All reports must be filed with the Department of Labor at the following
address:
U.S. Department of
Labor
Employment Standards
Administration
Office of Labor-Management
Standards
200 Constitution Avenue,
NW
Washington, DC 20210 |
Public Disclosure |
All reports are public information and the Secretary of Labor may publish
any information or data obtained from reports submitted under the trusteeship
provisions of the LMRDA.
Any person may examine these reports or may purchase copies for 15 cents
per page. All reports filed with OLMS are available at its national office
at the above address in Washington, DC. Each OLMS field office has duplicate
reports for all reporting organizations and individuals within its geographic
jurisdiction.
See OLMS field
offices. |
Recordkeeping |
Every person who is required to file a report under the trusteeship provisions
of the LMRDA is responsible for maintaining records which will provide
in sufficient detail the information and data necessary to verify the
accuracy and completeness of the report. These records must be kept for
5 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. |
Computer-Generated
Forms |
Required reports may be filed on computer-generated forms if in overall
appearance and content they are virtually indistinguishable from the printed
OLMS forms and their readability is equivalent to the readability of OLMS
forms. |
Civil Enforcement |
The LMRDA trusteeship reporting requirements are enforced under section
210, which allows the Secretary of Labor to file civil actions in U.S.
district courts to restrain violations and bring about compliance. The
Secretary cannot, however, enforce the other provisions of Title III without
a written complaint of a union member or subordinate union in accordance
with section 304(a) of the LMRDA. The Secretary may investigate any such
complaint and upon a finding of probable cause that a violation has occurred
and has not been remedied, may bring a civil action in a U.S. district
court. The Secretary is prohibited from disclosing the identity of the
complainant.
As an alternative to filing a complaint with the Secretary, a union
member or subordinate union affected by a violation of Title III (except
the reporting requirements) may bring a civil action directly in a U.S.
district court. Once an action has been instituted in a district court
by the Secretary, however, that court has exclusive jurisdiction over
the trusteeship.
Enforcement of the CSRA's trusteeship requirements is through administrative
action involving the filing of a complaint by OLMS, a hearing before a
Labor Department administrative law judge, the judge's report and recommendation,
and a decision and order by the Assistant Secretary for Employment Standards. |
Criminal
Penalties |
Sections 301 and 303 of the LMRDA provide criminal penalties for willful
violations of Title III. Any person who willfully violates these LMRDA
trusteeship requirements may be fined and/or imprisoned. Willful violations
of the trusteeship requirements of the CSRA may result in administrative
enforcement action.
The LMRDA also prescribes criminal penalties for officials who make
false statements on reports required to be filed with OLMS, including
statements relating to the trusteeship requirements. If the reports were
filed under the CSRA, penalties may be imposed pursuant to 18 U.S.C. 1001. |
Additional information about the LMRDA and CSRA may be obtained from
OLMS field
offices.
Information about OLMS, including key personnel and telephone numbers,
how to obtain LM reports, compliance assistance materials, the text of
the LMRDA, and related Federal Register and Code of Federal Regulations
(CFR) documents, is also avaliable on the Internet at:
http://www.dol.gov/esa/olms_org.htm
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