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DOL Unwinds Trump Rule That Upped Union Financial Oversight (1)

March 29, 2021, 8:39 PM; Updated: March 29, 2021, 9:49 PM

The U.S. Labor Department will stop enforcing and move to repeal a Trump administration rule that imposed heightened financial disclosure requirements on certain labor unions.

DOL’s Office of Labor-Management Standards said Monday that its new non-enforcement policy will be followed by a proposal to rescind the 2020 rule—marking the latest in a series of Biden administration moves championed by unions.

The 2020 final rule established new reporting mandates for many unions regarding their strike funds, apprenticeship programs, and other trusts—a level of transparency the Trump administration said was necessary to deter malfeasance but that organized labor viewed as a form of harassment meant to weaken unions.

“The Office of Labor-Management Standards has reviewed the Form T-1 Rule and believes that legal and policy issues may exist concerning whether the rule exceeds the scope of the statute, and whether the rule’s purported benefits justify its known burdens,” said Jeffrey Freund, the Biden administration’s newly appointed OLMS director, said in a prepared statement. “In light of those concerns, OLMS has also determined that it would not be a good use of its resources to enforce the rule, pending the rulemaking, concerning the filing of initial Form T-1 reports.”

An accompanying online notice from the subagency noted that the “rapidly approaching filing deadline and associated recordkeeping burden” for unions was another reason to adopt enforcement lenience.

Unions were facing a Sept. 28 deadline to file their first reports under this rule, but OLMS said on Monday that it won’t enforce submissions under this requirement for 12 months after that date. This would give the agency time to propose and finalize a rule withdrawing that Trump measure.

Under former President Donald Trump, the office cited union officer corruption, such as the convictions of former United Auto Workers leaders, as justification for tougher regulatory action. The final rule created a “Form T-1" report that labor organizations with at least $250,000 in annual receipts were required to start filing every year for each of their trusts.

But unions and their allies have countered that the Trump rule and other GOP-favored financial disclosure mandates for organized labor wind up burying short-staffed union offices in paperwork and, in effect, distract from efforts to serve members and organize workers.

The Biden administration’s non-enforcement posture is one of the first public actions OLMS has taken since Freund arrived on Inauguration Day after a long career as an attorney representing unions at the firm Bredhoff & Kaiser. It also comes less than a week after Labor Secretary Marty Walsh, a former leader of a Boston-area umbrella organization for construction unions, took office.

(Updated with details of enforcement policy in sixth paragraph)

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com; Travis Tritten at ttritten@bgov.com

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