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Labor Agency Aims to Wield Its Data to Counter Anti-Union Groups

May 13, 2021, 1:06 PM

The Biden administration plans to have the federal office in charge of policing unions mount a more robust defense of organized labor in the face of well-funded conservative groups that seek to undermine unionization efforts.

Jeffrey Freund, the new director of the U.S. Labor Department’s Office of Labor-Management Standards, told Bloomberg Law he’ll push back more aggressively against business-funded campaigns that use the department’s data to portray unions as bastions of corruption.

Freund, a veteran union-side attorney, said he’s planning a public outreach campaign to ensure workers are aware that the vast majority of unions are in compliance with rules on financial disclosure and officer elections. He said he aims to promote unions’ low rate of overall violations through a side-by-side comparison to data collected by other DOL agencies that investigate businesses, such as the prevalence of “wage theft,” workplace safety fines, and other employer-specific offenses.

“I think when people are looking to make judgments about whether they want to be in unions or whether they don’t want to be in unions, they ought to get a picture of the entire universe,” Freund said in a recent interview.

Freund’s approach appears to be more aggressive than that of his Obama-era predecessors, who also embraced a more union-appeasing posture at OLMS relative to Republican administrations, according to former agency officials and outside experts. While his philosophy is aligned with the Biden administration’s steadfast support of organized labor, the planned data offensive could spur criticism from business groups that he’s politicizing an office that enforces anti-corruption laws.

“It’s an interesting move—and it’s logical,” said Ruth Milkman, professor of labor sociology at the City University of New York. “I could be wrong, but I’m not aware of any precedent for that.”

Patrick Semmens, vice president of the National Right to Work Legal Defense Foundation, a group that opposes unions, said Freund should focus on protecting workers from abuses by union leaders, not “excusing such abuses.”

“If Mr. Freund wants to do PR for unions or defend union bosses accused of abusing their power, he should resign and return to private practice where he represented such union officials,” Semmens said in an email.

Ian Kullgren/Bloomberg Law

‘Cherry-Picking Examples’

The agency is the federal government’s main check on private-sector labor unions, created by Congress in 1959 amid concerns about corruption and purported Communist infiltration in the labor movement.

Today, thousands of unions file financial disclosure forms detailing their relationships with employers and with one another. The disclosures provide the only clear public accounting of unions’ internal workings, including membership numbers, expenses, and cash collected.

Each disclosure form is added to a national database accessible to rank-and-file union members and the public. Opposition groups, such as the Center for Union Facts, which is headed by corporate lobbyist Rick Berman, have for years used agency data to fuel a wide-ranging campaign against organized labor.

OLMS agents investigate irregularities alongside other law enforcement agencies, such as the FBI, and in severe cases work with the Justice Department to prosecute offenders. The agency also monitors union leadership elections and can take steps to nullify results if misconduct is detected.

Freund said he wants to advance a “broader perspective” of enforcement data to dispel the argument that unions are anti-democratic.

“We know there are organizations out there who have an agenda to defeat union organizing, to reduce union power, and to generally diminish the importance of unions in the American economy,” Freund said. “And they take our data, they produce a picture based on cherry-picking examples, and extrapolate that to the labor movement writ large. And that has an effect.

“It has an effect on workers who are members of those unions,” Freund continued. “It has an effect on workers who are not members of those unions but who may be thinking about organizing. It has an effect on public policymakers.”

Union PR?

Findings of serious union violations are rare, but the agency launches a number of investigations each year.

OLMS last year received more than 24,000 disclosure forms, initiated 223 criminal investigations, and issued 61 indictments with other law enforcement agencies, according to the agency’s annual report. In the 1980s and 1990s, there were sometimes more than 150 convictions and indictments a year, but those numbers fell as union density declined nationwide.

Still, anti-union groups point to high-profile scandals to make a case that labor leaders care more about self-enrichment than helping workers.

The Center for Union Facts cited the United Auto Workers corruption scandal, where senior leaders stole millions of dollars of union dues to fund extravagant personal expenses. Former UAW President Dennis Williams was sentenced to 21 months in prison on Tuesday, one of 15 convictions stemming from a federal probe.

“It is not the role of the taxpayer-funded OLMS to be the PR department for labor union leadership—it’s to provide transparency and accountability for union members and the public at large,” organization spokeswoman Charlyce Bozzello said in a statement. “If anything, OLMS needs to go further in requiring additional scrutiny for union spending of compulsory dues.”

President Joe Biden and Vice President Kamala Harris meet with union leaders in the Oval Office on Feb. 17.
Photographer: Pete Marovich-Pool/Getty Images

Union malpractice certainly motivated Congress to pass the 1959 law that OLMS enforces—the Labor-Management Reporting and Disclosure Act, Freund said. But he emphasized that businesses and employer consultants are also subject to the law’s reporting requirements.

“There’s no accident that ‘management’ is in the name of the statute,” he said.

Neutral Enforcer?

OLMS, while politically neutral in theory, has always had a degree of partisan bent depending on who runs the White House.

The Trump administration appointed union antagonists to the agency, cracked down on worker advocacy groups, and imposed greater financial scrutiny—measures the Biden administration is in the process of rescinding.

Under former President George W. Bush, the agency hired more investigators and launched a special unit dedicated to auditing large international unions. Former President Barack Obama’s DOL stopped those initiatives. The Trump administration tried to revive them, but Congress rejected funding needed to make it happen.

Freund also indicated he’s considering reinstating an Obama-era regulation that would require businesses to disclose hiring of union-avoidance consultants. The “persuader” rule, as it’s known, was finalized in March 2016 and then nixed by the Trump administration.

While it’s rare for an OLMS director to use financial disclosure data to make what some would consider a political argument, the Obama-led agency avoided criticizing unions publicly.

Michael Hayes, who directed the agency during Obama’s second term, said he was instructed not to publicize enforcement against unions, even though other agencies that police businesses were encouraged to make their findings public.

That’s largely because partners of OLMS—usually the Justice Department—put out press releases related to union prosecutions that would have made the agency’s efforts redundant, Hayes said.

Hayes said it could be a valuable tool to fight misinformation.

“That would make sense to me—just say, ‘Look, we did this criminal case, but we got however many thousand reports and those are all fine, didn’t lead to any criminal investigation,’” Hayes said. “That would not necessarily be an unfair thing to do.”

To contact the reporters on this story: Ian Kullgren in Washington at ikullgren@bloombergindustry.com; Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editor responsible for this story: John Lauinger at jlauinger@bloomberglaw.com

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