Trusteeship Requirements Under the LMRDA and the CSRA

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.

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.

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.

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.

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.

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.

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 subordinate 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.

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 electronically, via the OLMS Electronic Forms System (EFS), 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.
• Facsimile of Form LM-15 (PDF)
• Instructions for Form LM-15 (PDF)

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 3 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  electronically, via the   OLMS Electronic Forms System (EFS):

• 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.
• Facsimile of Form LM-16 (PDF)
• Instructions for Form LM-16 (PDF)

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 electronically, via the OLMS Electronic Forms System (EFS), 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.

• Facsimile of Form LM-15A (PDF)
• Instructions for Form LM-15A (PDF)

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.

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 by contacting OLMS at OLMS-Public@dol.gov or calling (202) 693-0123.

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 Administrative Review Board.

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.