[Federal Register Volume 88, Number 144 (Friday, July 28, 2023)]
[Rules and Regulations]
[Pages 49230-49265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15510]
[[Page 49229]]
Vol. 88
Friday,
No. 144
July 28, 2023
Part V
Department of Labor
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Office of Labor-Management Standards
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29 CFR Part 405
Revision of the Form LM-10 Employer Report; Final Rule
Federal Register / Vol. 88, No. 144 / Friday, July 28, 2023 / Rules
and Regulations
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DEPARTMENT OF LABOR
Office of Labor-Management Standards
29 CFR Part 405
RIN 1245-AA13
Revision of the Form LM-10 Employer Report
AGENCY: Office of Labor-Management Standards, Department of Labor.
ACTION: Form revision.
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SUMMARY: The Office of Labor-Management Standards (OLMS) of the
Department of Labor (Department) is revising the Form LM-10 Employer
Report upon review of the comments received in response to its
September 13, 2022 notice of proposed form revision. Under section 203
of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA or
the Act), employers must file a Form LM-10 Employer Report with the
Department to disclose certain payments, expenditures, agreements, and
arrangements. Under the revision, the Department adds a checkbox to the
Form LM-10 report requiring certain reporting entities to indicate
whether such entities were Federal contractors or subcontractors in
their prior fiscal year, and two lines for entry of filers' Unique
Entity Identifier and Federal contracting agency or agencies, if
applicable.
DATES:
Effective date: This rule is effective August 28, 2023.
Applicability date: The changes made to the Form LM-10 reporting
requirements will be applicable to Form LM-10 reports filed on or after
such date.
FOR FURTHER INFORMATION CONTACT: Karen Torre, Chief of the Division of
Interpretations and Regulations, Office of Labor-Management Standards,
U.S. Department of Labor, 200 Constitution Avenue NW, Room N-5609,
Washington, DC 20210, (202) 693-0123 (this is not a toll-free number),
(800) 877-8339 (TTY/TDD), [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Statutory Authority
II. Statutory and Regulatory Background
A. History of the LMRDA's Reporting Requirements
B. Statutory and Regulatory Requirements for Employer Reporting
C. Overview and History of the Form LM-10
III. Revision to the Form LM-10
A. General Overview of Revision and Comments Received
B. Overview of Item 12.a.
C. Overview of Item 12.b.
IV. Purpose and Justification for the Revision
A. OLMS Has the Authority To Issue This Rule
B. The Revision Furthers the Intent of the Act
C. The Revision Ensures That Filing Employers Fully Explain the
Circumstances of Payments, Agreements and Arrangements
D. Both the Public and Workers Have an Interest in Transparency
Concerning Employers' Federal Contractor Status
1. Persuader Activity Has Increased in Prevalence
2. The Revision Will Lead to Increased Transparency
E. Including the Unique Entity Identifier Will Prevent Confusion
and Ease Access
F. The Revision Does Not Create a Significant Burden on
Employers
V. Additional Comments Received
A. Comments Concerning Potential Duplication of Existing
Reporting Requirements
B. Comments Concerning First Amendment Protected Activities and
Other Employee and Employer Rights
C. Comments Outside the Scope of This Rulemaking
D. The Revision May Provide Other Benefits to the Government
VI. Regulatory Procedures
A. Executive Order 12866 (Regulatory Planning and Review) and
13563 (Improving Regulation and Review)
1. Costs of the Updated Form LM-10 for Affected Employers
2. Summary of Costs
3. Benefits
B. Regulatory Flexibility Act
C. Paperwork Reduction Act
1. Summary and Overview of the Final Rule
2. Methodology of the Burden Estimate
3. Conclusion
D. Unfunded Mandates Reform
E. Small Business Regulatory Enforcement Act of 1996
Appendix: Revised Form LM-10 and Instructions
I. Statutory Authority
The legal authority for this Final Rule is set forth in sections
203 and 208 of the LMRDA, 29 U.S.C. 433, 438. Section 208 of the LMRDA
provides that the Secretary of Labor shall have authority to issue,
amend, and rescind rules and regulations prescribing the form and
publication of reports required to be filed under Title II of the Act
and such other reasonable rules and regulations as the Secretary may
find necessary to prevent the circumvention or evasion of the reporting
requirements. 29 U.S.C. 438. The Secretary has delegated this authority
under the LMRDA to the Director of OLMS and permits re-delegation of
such authority. See Secretary's Order 03-2012--Delegation of
Authorities and Assignment of Responsibilities to the Director, Office
of Labor-Management Standards, 77 FR 69375 (November 16, 2012). The
Director moved to exercise this authority through a proposed form
revision. 87 FR 55952 (September 13, 2022).
II. Statutory and Regulatory Background
A. History of the LMRDA's Reporting Requirements
The Secretary of Labor administers and enforces the LMRDA, as
amended, Public Law 86-257, 73 Stat. 519-546, codified at 29 U.S.C.
401-531. The LMRDA, in part, establishes labor-management transparency
through reporting and disclosure requirements for labor organizations
and their officials, employers and their labor relations consultants,
and surety companies. See 29 U.S.C. 431-441.
In enacting the LMRDA in 1959, a bipartisan Congress expressed the
conclusion that in the labor and management fields ``there have been a
number of instances of breach of trust, corruption, disregard of the
rights of individual employees, and other failures to observe high
standards of responsibility and ethical conduct which require further
and supplementary legislation that will afford necessary protection of
the rights and interests of employees and the public generally as they
relate to the activities of . . . employers, labor relations
consultants, and their officers and representatives.'' 29 U.S.C.
401(b).
The LMRDA is the direct outgrowth of an investigation conducted by
the Senate Select Committee on Improper Activities in the Labor or
Management Field, commonly known as the McClellan Committee, which
convened in 1958. Enacted in 1959 in response to the report of the
McClellan Committee, the LMRDA addresses various ills identified by the
Committee through a set of integrated provisions aimed, among other
things, at shedding light on labor-management relations, governance,
and management. See 29 U.S.C. 401. These provisions include financial
reporting and disclosure requirements for employers and labor relations
consultants. See 29 U.S.C. 431-441.
Among the abuses that prompted Congress to enact the LMRDA was
questionable conduct by some employers and their labor relations
consultants that interfered with the right of employees to organize
labor unions and to bargain collectively under the National Labor
Relations Act (NLRA),
[[Page 49231]]
29 U.S.C. 151 et seq. See, e.g., S. Rep. NO. 86-187 (``S. Rep. 187'')
at 6, 10-12 (1959), reprinted in 1 NLRB, Legislative History of the
Labor-Management Reporting and Disclosure Act of 1959 (``LMRDA Leg.
Hist.''), at 397, 402, 406-408. Congress was concerned that labor
consultants, acting on behalf of management, worked directly or
indirectly to discourage legitimate employee organizing drives and to
engage in ``union-busting'' activities. S. Rep. 187 at 10, LMRDA Leg.
Hist. at 406. Congress concluded that such consultant activities
``should be exposed to public view,'' id., S. Rep. at 11, ``since most
of them are disruptive of harmonious labor relations and fall into a
gray area,'' even if the consultant's conduct was not unlawful or did
not otherwise constitute an unfair labor practice under the NLRA. Id.
at 12; see also 29 U.S.C. 401(a) (in enacting LMRDA, Congress found
that ``the relations between employers and labor organizations and the
millions of workers they represent have a substantial impact on the
commerce of the Nation'').
As a result, Congress imposed reporting requirements on employers
and their consultants under LMRDA section 203. 29 U.S.C. 433. Under
LMRDA section 208, the Secretary of Labor is authorized to issue,
amend, and rescind rules and regulations prescribing the form and
publication of required reports, as well as ``such other reasonable
rules and regulations . . . as [the Secretary] may find necessary to
prevent the circumvention or evasion of such reporting requirements.''
29 U.S.C. 438. The Secretary is also authorized to bring civil actions
to enforce the LMRDA's reporting requirements. 29 U.S.C. 440. Willful
violations of the reporting requirements, knowing false statements made
in a report, and knowing failures to disclose a material fact in a
report are subject to criminal penalties. 29 U.S.C. 439.
B. Statutory and Regulatory Requirements for Employer Reporting
Section 203(a) of the LMRDA, 29 U.S.C. 433(a), requires employers
to file a report, subject to certain exemptions, covering the following
payments and arrangements made in a fiscal year: certain payments to,
or other financial arrangements with, a labor organization or its
officers, agents, or employees; payments to employees for the purpose
of causing them to persuade other employees with respect to their
bargaining and representation rights; payments for the purpose of
interfering with employees in the exercise of their bargaining and
representation rights or for obtaining information on employee or labor
organization activities in connection with labor disputes involving
their employer; and arrangements (including related payments) with a
labor relations consultant for the purpose of persuading employees with
respect to their bargaining and representation rights, or for obtaining
information concerning employee activities in connection with a labor
dispute involving their employer. 29 U.S.C. 433.
The employer must file with the Secretary a report, in a form
prescribed by the Secretary, signed by the employer's president and
treasurer or corresponding principal officers showing in detail the
date and amount of each such payment, loan, promise, agreement, or
arrangement and the name, address, and position, if any, in any firm or
labor organization of the person to whom it was made and a ``full
explanation'' of the circumstances of all such payments, including the
terms of any agreement or understanding pursuant to which they were
made. 29 U.S.C. 433(a). The implementing regulations of the Department
require employers to file a Form LM-10 Employer Report (``Form LM-10'')
that contains this information. See 29 CFR part 405.
C. Overview and History of the Form LM-10
The Form LM-10 must be filed by any employer who has engaged in
certain financial transactions or arrangements, of the type described
in LMRDA section 203(a), with any labor organization, union official,
employee, or labor relations consultant, or who has made expenditures
for certain objects relating to activities of employees or a union. 29
U.S.C. 433(a). Employers are required to file only one Form LM-10 each
fiscal year that covers all instances of reportable activity even if
activity occurs at multiple locations.
In its current iteration, the Form LM-10 is divided into two parts:
Part A and Part B. Part A consists of pages 1 and 2 of the Form LM-10.
In Part A, Items 1-7 request basic identifying information about the
employer: namely file number, fiscal year, address of the employer,
address of the president or corresponding officer, any other address
where records needed to verify the report can be made available for
examination, a checklist of each location where records needed to
verify the report can be made available for examination, and what type
of legal entity is filing the report (``Corporation, Partnership,
Individual, Other (specify)''). Items 13 and 14 are also featured on
page 1 of Part A and are the signature boxes for the president and
treasurer of the employer, respectively. Page 2 consists entirely of
Part A, Item 8, which contains six ``Yes or No'' questions pertaining
to reportable employer activities. If the employer can answer ``No'' to
every question in Item 8, then no Form LM-10 needs to be filed. With
each question answered ``Yes,'' the filer must complete a separate Part
B for every person or organization with whom a reportable agreement was
made or to whom a reportable payment was made as to that ``Yes''
answer. The form also asks for the total number of Part Bs filed for
each question in Item 8.
Part B comprises page 3, and requires the name of the reporting
employer and the file number again to ensure it is matched with Part A.
Similarly, the next field is a checkbox indicating the questions in
Item 8 (labeled a through f) to which this Part B applies. Items 9-12
require various details regarding the agreement or payments the
employer-filer made.
Item 9 consists of four parts, 9.a.-9.d. Item 9.a. asks whether
this Part B concerns itself with an ``Agreement,'' a ``Payment,'' or
``Both.'' Item 9.b. requires the name and address of the person with
whom or through whom a separate agreement was made or to whom payments
were made. Item 9.c. requires the position of any persons mentioned in
9.b. Item 9.d. requires the name and address of the labor organization
or firm any person mentioned in 9.b. is a part of.
Item 10 consists of two parts, 10.a. and 10.b. Item 10.a. requires
the date of the promise, agreement, or arrangement pursuant to which
payments or expenditures were agreed to or made. Item 10.b. consists of
three checkboxes and filers are required to mark whether the promise,
agreement, or arrangement was ``Oral,'' ``Written,'' or ``Both.'' If
the agreement is written and entered into during the fiscal year, it
must be attached to the report.
Item 11 consists of three parts, 11.a.-11.c. Item 11.a. requires
the date of each payment or expenditure referred to in Item 9. Item
11.b. requires the amount of each of those payments. Item 11.c.
requires the filer to indicate the kind of each payment or expenditure,
specifying whether it was a payment or a loan and whether it was made
in cash or property.
Historically, Item 12 required a narrative response from the filers
with a full explanation identifying the purpose and circumstances of
the payments, promises, agreements, or arrangements included in the
report.
[[Page 49232]]
The explanation needed to include a detailed account of services
rendered or promised in exchange for promises or payments the filer has
either already made or agreed to make. The explanation needed also to
fully outline the conditions and terms of any oral agreement or
understanding pursuant to which they were made. Finally, the filer was
required to indicate whether the payments or promises reported
specifically benefited the person or persons listed in Item 9.b., or
the firm, group, or labor organization named in Item 9.d. If the
employer-filer made payments, promises, or agreements through a person
or persons not shown above, it needed to provide the full name and
address of such person or persons. The explanation needed to clearly
indicate why the filer must report the payment, promise, or agreement.
Any incomplete responses or unclear explanations rendered a report
deficient. These requirements continue, substantively unchanged by this
final rule, in new Item 12.a.
III. Revision to the Form LM-10
A. General Overview of Revision and Comments Received
As proposed in its September 13, 2022, proposed form revision, the
Department revises the Form LM-10 to supplement the identifying
information that OLMS already collects from employers required to file,
such as the employer's name, address, and status as a corporation,
partnership, or individual. See 87 FR 55952 (September 13, 2022). The
revised Item 12 does not change which employers are required to file
Form LM-10; it requires employers who are already required to file the
Form to provide an additional item of identifying information--whether
the employer is a federal contractor or subcontractor--and, if so, a
short entry indicating the federal contracting agency and the
contractor's Unique Entity Identifier (UEI), if the contractor has one.
If providing the name of a federal contracting agency would reveal
classified information, the filer should omit the name of the agency.
All federal prime contractors, and, in some cases, subcontractors
performing on federal prime contracts, must have a UEI to do business
with the federal government or to meet reporting requirements pursuant
to the Federal Acquisition Regulation (FAR). For example, FAR part
52.204-6 requires prime contractors to obtain a UEI to register to
obtain contracts with the federal government.\1\
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\1\ ``As of April 4, 2022, the federal government stopped using
the DUNS Number to uniquely identify entities. Now, entities doing
business with the federal government use the Unique Entity ID
created in SAM.gov. They no longer go to a third-party website to
obtain their identifier. This transition allows the government to
streamline the entity identification and validation process, making
it easier and less burdensome for entities to do business with the
federal government.'' Unique Entity Identifier Update, U.S. General
Services Administration, available at https://www.gsa.gov/about-us/organization/federal-acquisition-service/office-of-systems-management/integrated-award-environment-iae/iae-systems-information-kit/unique-entity-identifier-update (last visited December 10,
2022).
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The Department has revised Item 12 to contain two parts: Item 12.a,
which will now require the information previously required in Item 12,
and a new Item 12.b. To collect the new information quickly and
efficiently, the Department is adding one ``Yes,'' ``No,'' or ``N/A''
checkbox at the end of the form, in Item 12.b, regarding federal
contractor status. In addition, this revision adds two lines where
filers who are federal contractors or subcontractors will enter their
UEI and the federal contracting agency involved.
Not all filers will be required to complete Item 12.b. Filers who
answer ``Yes'' to Item 8.a., but ``No'' to Items 8.b.-8.f., will not be
required to complete Item 12.b., and the electronic form will
automatically check the ``N/A'' box and grey out (render nonfunctional)
the remaining portions of Item 12.b. for those filers so that no entry
can be made.\2\
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\2\ Item 8 requires filers to indicate the type of reportable
activity engaged in by the employer. Item 8 a. asks filers: Did you
make or promise or agree to make, directly or indirectly, any
payment or loan of money or other thing of value (including
reimbursed expenses) to any labor organization officer, agent, shop
steward, or other representative or employee of any labor
organization? Items 8 b. through 8 f. ask about payments and
expenditures related to a labor dispute or the right to organize and
bargain collectively. See also https://www.dol.gov/agencies/olms/reports/electronic-filing.
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The instructions also make explicit that filers must enter
information in Item 12.a. that the Form LM-10 already encompassed
before this revision--including the subject group of employees (e.g.,
the particular unit or division in which those employees work). See
unrevised Item 12 (``Provide a full explanation identifying the purpose
and circumstances of the payments, promises, agreements, or
arrangements included in the report. Your explanation must contain a
detailed account of services rendered or promised in exchange for
promises or payments you have already made or agreed to make. Your
explanation must fully outline the conditions and terms of all listed
agreements.''). This necessarily includes identifying certain payments,
expenditures, agreements, and arrangements regarding employees. Filers
previously would have identified the subject group of employees in Item
12.
On September 13, 2022, the Department published a proposed revision
to the Form LM-10, which provided a 30-day comment period ending on
October 13, 2022. The Department received 35 comments on the LM-10
revisions. Comments were received from labor organizations, nonprofit
organizations, private individuals, and members of Congress. Of the 35
total comments, 32 expressed overall support for the proposed revisions
while three opposed them. As discussed below, the Department adopts the
revisions as proposed.
B. Overview of Item 12.a.
The new Item 12.a. consists of a narrative section that mirrors the
prior Item 12, and the revised instructions add a clarification. In
both the prior Item 12 and the new Item 12.a., filers must explain
fully the circumstances of all payments, including the terms of any
oral agreement or understanding pursuant to which they were made. As
the instructions indicated for Item 12 and now indicate for Item 12.a.,
filers must provide ``a full explanation identifying the purpose and
circumstances of the payments, promises, agreements, or arrangements
included in the report.'' The instructions are revised to make explicit
that a ``full explanation'' continues to require filers to identify the
subject group of employees (e.g., the particular unit or division in
which those employees work). This was accomplished by adding a new
final clause to an existing sentence. The sentence, ``Your explanation
must fully outline the conditions and terms of all listed agreements,''
was revised. It now reads, ``Your explanation must fully outline the
conditions and terms of all listed agreements, including fully
identifying the subject group of employees (e.g., the particular unit
or division in which those employees work).'' \3\ This revision will
help ensure that filers understand that a full description requires
information on the subject group of employees.
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\3\ The preamble of the proposed revision provided, ``The
instructions would also make explicit that a `full explanation'
requires that filers must identify the subject group of employees
(e.g., the particular unit or division in which those employees
work).'' 87 FR 55954. Through an editing error, the instructions
used the Latin abbreviation ``i.e.'' 87 FR 55969. The Department
adopts the abbreviation used in the preamble.
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C. Overview of Item 12.b.
Filers who check ``Yes'' for any item in Items 8.b. through 8.f.
must complete
[[Page 49233]]
Item 12.b. indicating their status as a federal contractor or
subcontractor. Regarding such status, the Department, as proposed,
adopts the following definitions from the regulations implementing
Executive Order (E.O.) 13496, Notification of Employee Rights Under
Federal Labor Laws: (a) ``contract,'' (b) ``contracting agency,'' (c)
``contractor,'' (d) ``government contract,'' (e) ``modification of a
contract,'' (f) ``prime contractor,'' (g) ``subcontract,'' and (h)
``subcontractor.'' 29 CFR 471.1. Therefore, filers must answer Item
12.b. in accordance with those eight definitions.\4\ Id.
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\4\ The Form LM-10 instructions list the definitions adopted
from the implementing regulations of E.O. 13496 (Notification of
Employee Rights Under Federal Labor Laws) at 29 CFR 471.1 for
Contract, Contracting agency, Contractor, Government contract,
Modification of a contract, Prime Contractor, Subcontract, and
Subcontractor. See 29 CFR 471.1.
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Item 12.b. consists of two parts. First, filers must complete the
``Yes,'' ``No,'' or ``N/A'' checkbox in response to the following
question: ``If your Part B applies to Items 8.b.-8.f., did the
expenditures, payments, arrangements or agreements concern employees
performing work pursuant to a federal contract or subcontract?''
Second, if the filer answers ``Yes,'' it must enter, on the two lines
provided, their UEI and the name of the federal contracting agency
involved. If a filer does not have a UEI, then the filer (most likely a
subcontractor) should so state in Item 12.b. If providing the name of a
federal contracting agency would reveal classified information, the
filer should omit the name of the agency. When filers answer ``Yes,''
in the checkbox portion of Item 12.b., failure to complete the entry on
the two lines provided, or providing an unclear explanation in that
entry, will render the report deficient.
IV. Purpose and Justification for the Revisions
A. OLMS Has Authority To Issue This Rule
As the Department stated in its proposed revision, both the public
and the employees whose rights are at issue have an interest in
understanding the full scope of activities undertaken by employers to
persuade employees regarding the exercise of their rights to organize
or bargain collectively, to surveil employees, or to commit unfair
labor practices. See S. Rep. 187 at 10-11, LMRDA Leg. Hist. at 406-07.
This interest is heightened when the employees' own tax dollars may be
indirectly funding an employer's reportable activities. The public and
employees also have an interest in knowing whether the federal
government is paying for goods and services from an employer who would
seek to engage in activity that may disrupt the harmonious labor
relations that the federal government is bound to protect. See S. Rep.
187 at 12; see also 29 U.S.C. 401(a). OLMS has authority to protect
this interest.
The Form LM-10 reporting requirement is based on Congress's
concerns over the ``large sums of money [that] are spent in organized
campaigns on behalf of some employers'' on persuader activities that
``may or may not be technically permissible'' and Congress's
determination that the appropriate response to such persuader campaigns
is to disclose them in the public interest and for the preservation of
``the rights of employees.'' See S. Rep. 187 at 10-12, LMRDA Leg. Hist.
at 406-07.
As set forth in Section I, Statutory Authority, above, LMRDA
Section 208 authorizes the Secretary to ``issue . . . regulations
prescribing the form and publication of reports required to be
filed[.]'' 29 U.S.C. 438. The statutory provision authorizing the
issuance of the Form LM-10 describes the data and information to be
reported in the Secretary's form. Employers shall file with the
Secretary a report, in a form prescribed by the Secretary, signed by
the employer's president and treasurer or corresponding principal
officers showing in detail the date and amount of each such payment,
loan, promise, agreement, or arrangement and the name, address, and
position, if any, in any firm or labor organization of the person to
whom it was made and a ``full explanation'' of the circumstances of all
such payments, including the terms of any agreement or understanding
pursuant to which they were made. 29 U.S.C. 433(a). The statutory
intent to require employers to provide a ``full explanation'' of
payments was reflected in the Form LM-10 the Secretary established.
Employers are told to provide a ``full explanation'' of the
circumstances of all such payments, including the terms of any
agreement or understanding pursuant to which they were made. 29 U.S.C.
433(a).
This revision, as with the proposal, explains that one of the
``circumstances'' that must be explained is whether the payments
concerned employees performing work pursuant to a federal contract or
subcontract. If so, the filer must provide its UEI, if it has one, and
name the relevant federal contracting agency. Disclosing contractor
status is consistent with Congress's intent in enacting the LMRDA:
``[I]t continues to be the responsibility of the Federal Government to
protect employees' rights to organize, choose their own
representatives, bargain collectively, and otherwise engage in
concerted activities for their mutual aid or protection.'' 29 U.S.C.
401(a); see also E.O. 13494 (reiterating ``the policy of the United
States to remain impartial concerning any labor-management dispute
involving Government contractors.''). As discussed in more detail,
below, employees will more fully understand the circumstances under
which they seek to exercise their rights when they know the contractor
status and UEI of their employer, as well as the division or unit of
the employees whose rights to organize, choose their own
representatives, bargain collectively, and otherwise engage in
concerted activities the employer seeks to influence.
Half of all supportive commenters specifically referenced the
Department's authority to make this revision, and two-thirds of
supportive comments expressly indicated that making this revision is
consistent with the LMRDA purpose of providing transparency through
reporting and disclosure.
As one commenter stated, ``OLMS is well within its authority to
prescribe these modest changes to the Form LM-10 [and] . . . [b]ecause
the NPRM fully explains this sound basis for the revisions, we do not
address them further.'' Another commenter similarly outlined the clear
statutory basis for making the change: ``This statute [LMRDA] requires
the disclosure of persuader activity payments to include `full
explanation of the circumstances' surrounding those payments . . .
[and] delegates authority to the Agency to `prescribe[]' the `form' in
which these reports are made, further reinforcing the authority of OLMS
to implement this propose change.''
Other supportive commenters agreed that the revision was consistent
with, and a reasonable alteration pursuant to, the reporting
requirements of section 203 of the LMRDA and within the Department's
authority under section 208 to ``issue . . . regulations prescribing
the form and publication of reports required to be filed[.]'' 29 U.S.C.
438. As a union commenter described, the LM-10 already directs filers
``to `[e]xplain fully the circumstances of all payments, including the
terms of any oral agreement or understanding pursuant to which they
were made.'' Accordingly, the commenter continued, ``it is reasonable
and appropriate for [filers] to disclose their status as a federal
contractor or subcontractor, and information about the employees (or
[[Page 49234]]
groups thereof) that are the subject of the payments, expenditures,
agreements, or arrangements covered by the statute, as a part of their
obligation to provide a full explanation of this conduct.''
Commenters also turned to legislative history for further support
of the Department's authority to issue this revision. A union commenter
citing the LMRDA Legislative History, highlighted Congress' concern
with ``middlemen'' and the applicable statutory language as
``provid[ing] clear authority for the modest action proposed in the
NPRM.'' A different union commenter also looked to the legislative
history of the LMRDA, citing a Senate Report that concluded most
persuader activity is `` `disruptive of harmonious labor relations and
fall[s] into a gray area' such that it `should be exposed to public
view.' '' The Department enacts this revision to more fully realize the
ideal of transparency that is central to section 203 of the LMRDA. As
many union commenters noted, the broad authority granted to the
Secretary by section 208 allows for these modest changes to the form.
Another union commenter agreed that the Department's ``clear interest
in understanding the full scope of activities undertaken by employers
that enter into agreements to persuade employees not to exercise these
rights'' is indeed served by these revisions.
B. The Revision Furthers the Intent of the Act
One intent of the Act is to support a harmonious relationship among
employees, labor organizations, employers, and labor relations
consultants. See 29 U.S.C. 401 (congressional declaration of findings,
purposes, and policy for LMRDA); id. at 401(a) (in enacting the LMRDA,
Congress found that ``the relations between employers and labor
organizations and the millions of workers they represent have a
substantial impact on the commerce of the Nation''). The Act therefore
requires transparency and accountability not just for labor
organizations, but employers and labor relations consultants as well.
Congress intended the LMRDA to provide for the elimination and
prevention of improper practices on the part of ``labor organizations,
employers, labor relations consultants and their officers and
representatives.'' 29 U.S.C. 401(c) (emphasis added).
Members of Congress commented that the ``proposed rule does not
subject any employer to new filing requirements.'' The Department
agrees that the revision does not change the criteria that determines
which employers are required to file the Form LM-10. The revision also
does not impair any rights that filers had prior to the change to Item
12, including First Amendment rights, as addressed below in Part V.B.
It does not increase required filers' liability in connection with
activities that they already had to report and does not impose duties
to file reports that filers did not already have under the LMRDA. It
adds, for certain filers only, the straightforward step of providing
basic identifying details regarding contractor status that filers will
be able to quickly enter on the Form LM-10. Consistent with the
statutory scheme enacted by Congress, the revision outlines aspects of
the ``full explanation'' that filers must report on the Form LM-10. 29
U.S.C. 433(a).
Next, one commenter opposed the proposed Form LM-10 revision
because it claimed that the proposed revision is contrary to the intent
of the LMRDA. The commenter asserted that while the LMRDA does place
some requirements on management, the main intent of the law is to
``ensure that individual workers are apprised of the financial actions
of their own unions[.]'' (Emphasis in original.) This assertion is
contradicted by both the legislative history and the plain language of
the statute. The Act expressly requires employer reports, 29 U.S.C. 433
(``Report of employers''), and authorizes the Department ``to issue,
amend, and rescind rules and regulations prescribing the form and
publication'' of the employer reports required to be filed under the
statute. 29 U.S.C. 438. The commenter explained, however, that in its
view, ``[w]orkers have a direct and obvious interest in being aware of
the actions of their unions, which purport to speak on their behalf as
their collective voice. The workers' interest is less compelling when
it involves the financial disclosure by employers as that is, by
definition, not the workers' own money and they do not have control
over its use under ordinary circumstances.'' The Department disagrees
that this is a reason to reject the revision. Congress, aware that
employers were spending their own money on what are now reportable
activities, enacted the LMRDA to expose those payments, agreements, and
arrangements to public view. See S. Rep. No. 86-187 (``S. Rep. 187'')
at 10-11 (1959), reprinted in 1 NLRB, LMRDA Leg. Hist., at 406-07.
Legislative history shows that the revisions are in accord with the
congressional intent of the Act. When debating and enacting the LMRDA,
Congress considered conduct by some employers and their labor relations
consultants as interfering with the right of employees to organize
labor unions and to bargain collectively under the NLRA. See S. No. 86-
187. Rep, at 50-51, reprinted in 1 LMRDA Leg. Hist., at 446-447.
Congress believed that employer payments and activities aimed at
employee unionization efforts should be made public even if they are
lawful.\5\ See S. No. 86-187. Rep, at 81-82, reprinted in 1 LMRDA Leg.
Hist., at 477-478. Among the concerns that prompted Congress to enact
the LMRDA was employers retaining labor relations consultants whose
actions discouraged or impeded the right of employees to organize labor
unions and to bargain collectively under the NLRA, 29 U.S.C. 151 et.
seq. See, e.g., S. No. 86-187. Rep, at 6, 10-12, reprinted in 1 LMRDA
Leg. Hist., at 397, 402, 406-408. Therefore, the Department finds that
employer reporting on persuader, surveillance, and unfair labor
practice activity is a fundamental part of the Act.
---------------------------------------------------------------------------
\5\ Congress recognized that some of the persuader activities
occupied a ``gray area'' between proper and improper conduct and
chose to rely on disclosure rather than proscription, to ensure
harmony and stability in labor-management relations. See S. Rep. No.
86-187, at 5, 12; 1 LMRDA Leg. Hist., at 401, 408.
---------------------------------------------------------------------------
Moreover, Congress authorized the Department to collect detailed
reports from employers. 29 U.S.C. 433, 438. The Senate Report explained
that the Department's collection and public disclosure of employer
reports under section 203 ``will accomplish the same purpose as public
disclosure of conflicts of interest and other union transactions which
are required to be reported'' under other sections of the bill that was
to become the LMRDA. S. Rep. No. 86-187, at 5, 12, reprinted in 1 LMRDA
Leg. Hist., at 401, 408.\6\ The Senate Report also explained that
employers required to file must ``file a detailed report.'' Consistent
with this congressional intent, Form LM-10 reports have required a
variety of details from employers including whether they are
partnerships, corporations, or individuals. See Form LM-10, Item 7.
Similarly, the revision now adds an additional piece of identifying
[[Page 49235]]
information in Item 12.b. for certain filers--whether they are federal
contractors or subcontractors and, if so, their UEI and agency
involved.
---------------------------------------------------------------------------
\6\ H.R. Rep. No. 86-741(1959), at 12-13, 35-37, reprinted in 1
LMRDA Leg. Hist., at 770-771, 793-795, contained similar statements
However, it should be noted that the House bill contained a much
narrower reporting requirement--reports would be required only if
the persuader activity interfered with, restrained, or coerced
employees in the exercise of their rights, i.e., if the activity
would constitute an unfair labor practice. The House bill also
contained a broad provision that would have essentially exempted
attorneys, serving as consultants, from any reporting. In
conference, the Senate version prevailed in both instances,
restoring the full disclosure provided in the Senate bill. See H.
Rep. No. 86-1147 (Conference Report), at 32-33; 1 LMRDA Legis.
Hist., at 936-937.
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C. The Revision Ensures That Filing Employers Fully Explain the
Circumstances of Payments, Agreements, and Arrangements
This revision ensures that filers fully explain the circumstances
of all covered payments, as required by the statute. The statute states
in broad terms that the details of the reportable activity are to be
collected in a ``form prescribed by [the Secretary] . . . showing . . .
a full explanation of the circumstances of all such payments, including
the terms of any agreement or understanding pursuant to which they were
made.'' 29 U.S.C. 433(a). For example, the group of employees affected
by a covered agreement (scope of agreement) and the worksite of the
employees to be targeted (location of performance on the agreement) are
basic details readily captured by the statute's use of the phrase
``terms of any agreement.'' 29 U.S.C. 433. The status of an employer as
a federal contractor is captured within ``full explanation'' of those
terms. In many cases, it may also be captured in the terms of the
agreement itself, and reportable for that reason alone.
One commenter who opposed the revision noted that Congress did not
include federal contractor status as an explicit requirement in the
drafting of the LMRDA, indicating that Congress did not find such
status relevant. The Department does not agree as Congress, instead of
making explicit all aspects of the reporting requirements, authorized
the Secretary to, ``issue . . . rules and regulations prescribing the
form and publication of reports required to be filed'' including
concerning the details of a ``full explanation of the circumstances of
all such payments[.]'' 29 U.S.C. 433, 438. Congress declined to
enumerate each ``circumstance[]'' to be reported, delegating authority
to the Secretary to determine the relevant details when prescribing the
form and publication of the Form LM-10.
Members of Congress commented that the revision ``would only inform
employees of whether their employer is a federal contractor, a fact
typically already known by employees since they work on the
contracts.'' Another commenter also thought it would be ``self-
evident'' if employees' work for a company involved the federal
government. In contrast, an international union representing employees
throughout the economy, including manufacturing employees, commented
that the form may provide the first notice to employees that they are
employees of a federal contractor: ``In many instances, manufacturing
employees may be unaware that their employer is a federal contractor or
subcontractor.'' The commenter described analogous circumstances for
service sector employees. Similarly, a national union commented that it
only discovered during the pandemic that some of the employers it
bargains with consider themselves to be federal contractors because
those employers sought aid available to such contractors. In support of
the revision, another commenter said that adding Item 12.b. will add a
level of accountability. The Department agrees that some employees may
not be aware that their work is pursuant to a federal contract and that
the revision adds a level of accountability envisioned by the LMRDA. It
adds identifying details regarding filers' contractor status that are
part of the ``full explanation'' Congress intended to be publicized
under the Act.
D. Both the Public and Workers Have an Interest in Transparency
Concerning Employers' Federal Contractor Status
As stated in the notice of proposed revision, the Department makes
these revisions in response to the increased prevalence of, and public
interest in, persuader activities in recent years.
1. Persuader Activity Has Increased in Prevalence
The media, academics, and non-governmental organizations (NGOs)
have noted persuader activity in a number of industries, including
multiple high-profile instances of companies investing substantial
resources in persuader activity. Over the decades, employer efforts to
defeat unions have become more prevalent, with more employers turning
to union avoidance consultants.\7\ Further, members of Congress have
noted recently that federal contractors have engaged in such agreements
and activities.\8\ As the Agency responsible for promoting transparency
around management attempts to influence employees' organizing and
collective bargaining rights, OLMS closely monitors developments in the
ways management interacts with union organizing efforts. As union
avoidance activity increases, it is well within OLMS's role to increase
the quality and utility of the information being disclosed on such
activity.
---------------------------------------------------------------------------
\7\ Celine McNicholas, et. al, Unlawful: U.S. Employers Charged
with Violating Federal Labor Law in 41.5 percent of all Union
Elections, Economic Policy Institute, (Dec. 11, 2019) available at
https://www.epi.org/publication/unlawful-employer-opposition-to-union-election-campaigns/ (``The data show that U.S. employers are
willing to use a wide range of legal and illegal tactics to
frustrate the rights of workers to form unions and collectively
bargain . . . . [E]mployers spend roughly $340 million annually on
`union avoidance' consultants to help stave off union elections . .
. . Over the past few decades, employers' attempts to thwart
organizing have become more prevalent, with more employers turning
to the scorched-earth tactics of `union avoidance' consultants.'');
Heidi Shierholz et. al, Latest Data Release on Unionization,
Economic Policy Institute, (Jan. 20, 2022) available at https://www.epi.org/publication/latest-data-release-on-unionization-is-a-wake-up-call-to-lawmakers/ (describing how ``it is now standard,
when workers seek to organize, for employers to hire union avoidance
consultants''); John Logan, The New Union Avoidance
Internationalism, 13 Work Org., Lab. & Globalisation 2 (2019)
available at https://www.scienceopen.com/hosted-document?doi=10.13169/workorgalaboglob.13.2.0057; Thomas A. Kochan
et. al, U.S. Workers' Organizing Efforts and Collective Actions: A
Review Of The Current Landscape, Worker Empowerment Research
Network, (June 2022) available at https://mitsloan.mit.edu/sites/default/files/2022-06/Report%20on%20Worker%20Organizing%20Landscape%20in%20US%20by%20Kochan%20Fine%20Bronfenbrenner%20Naidu%20et%20al%20June%202022.pdf; In
Solidarity: Removing Barriers to Organizing, Hearing Before the
United States House Committee on Education and Labor, 117th Congress
(September 14, 2022), available at https://edlabor.house.gov/hearings/in-solidarity-removing-barriers-to-organizing.
\8\ Should Taxpayer Dollars Go to Companies that Violate Labor
Laws?, Comm. on the Budget, 117th Congress (May 5, 2022), available
at https://www.budget.senate.gov/hearings/should-taxpayerdollars-go-to-companies-that-violate-labor-laws (discussing the propriety of
government contracting with Federal contractors that engage in legal
and illegal tactics, including ``union busters,'' to dissuade
workers from exercising their organizing and collective bargaining
rights).
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The noted prevalence of persuader activity accordingly increases
the interest of the federal government in obtaining information about
employers' spending on reportable activities. Congress found that most
of this kind of persuader activity is ``disruptive of harmonious labor
relations,'' even if lawful. S. Rep. 187 at 12, LMRDA Leg. Hist. at
406. The federal government has an increased interest in fully
identifying employers who may be disrupting the harmonious labor
relations that the federal government is bound to protect when those
employers are receiving tax dollars through federal contracts. See 29
U.S.C. 401(a). In other words, greater transparency is even more
important when persuader activities are increasingly undertaken by
employers that receive federal funds through contracting relationships.
See E.O. 13494 (reiterating ``the policy of the United States to remain
impartial concerning any labor-management dispute involving Government
contractors.'').
[[Page 49236]]
One commenter disagreed with this rationale and opposed the
proposed Form LM-10 revisions because they believe the Department
failed to provide any evidence of persuader activities negatively
affecting labor relations or leading to increased costs or delays for
the contracts. Evidence of the efficiency of federal contracts is not
necessary, as this is not part of the justification for this revision.
Independent evidence of persuader activities negatively affecting labor
relations is also not necessary as Congress determined that workers and
the public needed disclosure of persuader activities, even if lawful.
Nevertheless, an international union that represents employees in an
array of industries, including employees of federal contractors,
commented that, based on its long experience with anti-union campaigns
waged by labor consultants, persuader activity is harmful to workers'
ability to exercise their collective bargaining rights. Consistent with
this comment, and as discussed above, in enacting the LMRDA Congress
was concerned with the impact of persuader activities on harmonious
labor relations and believed that increased transparency about employer
efforts to persuade employees regarding their organizing and collective
bargaining rights would benefit workers and the public. The revision
furthers this statutory purpose.
2. The Revisions Will Lead To Increased Transparency
Many commenters favored the revision because it supports increased
transparency regarding persuader, surveillance, and unfair labor
practice activity. One commenter observed that the revision will
provide ``notice to workers and the public when a corporation reporting
anti-union spending is also a government contractor.'' The commenter
believed that this will ``help organizing workers better understand the
full extent of corporate opposition.'' The Department agrees that the
revision to Form LM-10 will increase transparency regarding which
federal contractors and subcontractors are engaging in activities
reported on the LM-10. Confirming a filer's status as a federal
contractor, as well as its UEI and federal agency involved, as part of
a full explanation of persuader activities will provide a method for
the public and employees to quickly identify whether a filer is a
federal contractor.
Like the federal government itself, workers and the public also
have a strong interest in spending choices by federal contractors. As a
policy institute commenter researched, and many commenters cited,
employers spend at least $340 million a year to bring union avoidance
consultants to influence workers as they decide whether to support an
organizing effort. The policy institute commenter argued that the
revision would allow workers and the public more transparency into the
willingness of federal contractors to engage in such practices. The
Department agrees that this may be relevant information to employees as
they choose how to exercise their organizing and collective bargaining
rights. It is therefore part of the ``full explanation'' that Congress
envisioned employers reporting. 29 U.S.C. 433(a).
One commenter opposing the revision said that ``if the company does
work on a federal contract, it is unlikely that this will be a central
or even relevant issue when the workers and the management negotiate
their own contract.'' The commenter asserted that ``workers still work
for the company and it is its policies and contract terms that will be
at issue.'' In the commenter's view, it is ``extremely unlikely that
workers would oppose the company accepting federal contracts, for
example.'' The Department is not revising the LM-10 because it expects
employees to make a particular choice regarding how they wish to
exercise their organizing and collective bargaining rights. Instead,
the revision outlines further information that employees may choose to
consider when determining whether and how to exercise their rights.
Two commenters supported the revision because it would empower
employees to speak out against both unlawful and lawful efforts by
their employer to convince them to remain unrepresented. Publicizing
which Form LM-10 filers are federal contractors will give workers more
information as they choose whether or not to speak out against such
efforts by their employer to convince them to remain unrepresented. And
as an advocacy center commenter also maintained, ``the public is
entitled to know whether public funds may indirectly lead to any sort
of disruption of labor relations and workers' rights.''
By learning of the federal contractor status of their employer,
those employees would have convenient access to the information that
would allow them to meaningfully exercise their organizing and
collective bargaining rights such as their First Amendment right to
choose whether to contact their representatives in Congress to inquire
about the federal appropriations underlying the contracts with their
employers, or the employers' activities undertaken pursuant to such
contracts, or allow the employees to work more effectively with
advocacy groups or the media to disseminate their views as employees to
a wider audience. See 29 U.S.C. 157; 45 U.S.C. 152, Fourth. This is
consistent with Congress' expectations when enacting the LMRDA--that in
the public interest citizens would have the benefit of public reports
regarding employer conduct that falls in a ``gray area.'' S. Rep. 187
at 11, LMRDA Leg. Hist. at 407 (persuader activities ``should be
exposed to public view, for if the public has an interest in preserving
the rights of employees then it has a concomitant obligation to insure
the free exercise'' of those rights).
Another comment discussed the Department's authority to ensure
LMRDA compliance and ``strongly support[ed] the proposed change to the
LM-10's instructions to make explicit that Filers must identify the
specific group of employees--such as the work unit or division--that
were subjected to the reportable, employer-sponsored anti-union
activities.'' The Department received no negative comments on its
proposed clarification that filers must identify the subject group of
employees and will retain the revised instructions as proposed. The
Department finds that doing so will increase compliance.
Multiple commenters also cited better NLRB cross-matching as a
benefit of the revision. The Department finds that by clarifying that
filers must identify the unit of employees subjected to their persuader
activity, representation and unfair labor practice cases before the
NLRB that have similar information documented can be matched more
easily by employees, allowing them to know whether they were subjected
to persuader activities more readily. This in turn would allow them to
make better-informed decisions regarding their workplace
representation.
Several commenters spoke to how the revision is justified as a
matter of policy by the public need for greater transparency in these
times of increased public interest in joining a union. As one commenter
indicated, ``[i]n 2022, workers voted to unionize in more elections
than they have in nearly two decades. Support for labor unions is [at]
its highest level since 1965, with 71 percent of Americans saying they
approve of unions[.]'' The commenter went on to say ``roughly half of
nonunion workers--or 60 million workers--would join a union if they
could[.]''
One commenter, an independent advocacy organization, also
emphasized that while the LMRDA provides statutory authority for
employer reporting form revisions that the
[[Page 49237]]
Secretary deems necessary, this rulemaking is further justified by the
particular legal status of the group it now seeks to secure disclosure
from: federal contractors. This commenter noted that starting with E.O.
8802, Administrations of both parties since 1941 have held entities
that receive federal money to ``the highest ethical standards.'' The
commenter said that this policy was reflected in legislation including
Title VI of the Civil Rights Act of 1964, and the Workforce Investment
and Opportunities Act. The commenter also wrote that regulations
require federal contractors to ``conduct themselves with the highest
degree of integrity and honesty.'' \9\ The Department acknowledges the
benefits of these laws but need not rely on them as the LMRDA expressly
contains a similar policy choice for all employers that must report,
including filers that are federal contractors. One of Congress' stated
purposes was to hold all covered employers to ``the highest standards
of responsibility and ethical conduct[.]'' 29 U.S.C. 401(a). The
revision does so regarding filers that are federal contractors and is
therefore consistent with the LMRDA.
---------------------------------------------------------------------------
\9\ Federal Acquisition Regulations System Sec. 3.1002.
---------------------------------------------------------------------------
The increased transparency from the revision will benefit employees
working on federal contracts who are subject to persuader activity,
information gathering, or interference, by giving them a ``full
explanation'' about their employers' reportable activities--as intended
by Congress in enacting the LMRDA. 29 U.S.C. 433(a). Generally, the
transparency created by the reporting requirements is designed to
provide workers with necessary information to make informed decisions
about the exercise of their rights to organize and bargain
collectively. For example, with the knowledge that the source of the
information received is an anti-union campaign managed by an outsider,
workers will be better able to assess the merits of the arguments
directed at them and make an informed choice about how to exercise
their rights.
Here, employees have a particular interest in knowing whether their
employers are federal contractors because, as taxpayers themselves,
those employees should know whether they are indirectly financing
persuasion campaigns regarding their own rights to organize and bargain
collectively. An individual commenter added that ``employees of federal
contractors and subcontractors are often given constitutional
protections and other protections that would be awarded to government
employees,'' and thus the federal government has a special interest in
seeing what forces such contractors bring to bear on their employees'
exercise of their rights. The Department agrees with this line of
reasoning that federal contractors and subcontractors occupy a
particular role in civil society through their relationship with the
federal government and receipt of federal monies. See 29 U.S.C. 401(a)
(providing it is ``the responsibility of the Federal Government to
protect employees' rights to organize, choose their own
representatives, bargain collectively, and otherwise engage in
concerted activities for their mutual aid or protection''). Although
persuader campaigns are not themselves reimbursable under the federal
contract or subcontract,\10\ federal contractors receive substantial
financial benefits from these federal contracts.
---------------------------------------------------------------------------
\10\ See E.O. 13494 (federal agencies ``shall treat as
unallowable the costs of any activities undertaken to persuade
employees . . . to exercise or not to exercise, or concerning the
manner of exercising, the right to organize and bargain collectively
through representatives of the employees' own choosing'').
---------------------------------------------------------------------------
As one commenter explained, ``these employers often receive
`significant' sums of money under federal contracts, funds which
`directly or indirectly' support their business activities, including
any decision to hire union avoidance consultants or otherwise engage in
persuader activities.'' In the same vein, a union commenter noted that
although no federal funds could be properly expended to engage in
reportable activity under section 203(a), federal contractors can
nonetheless still engage in this activity using other funding, and
while federal agencies may not be supporting that activity directly,
the federal agencies nonetheless support businesses that engage in
employee persuasion, helping to make them profitable. The Department
agrees that the funds free up other funds to be spent on consultants.
They support directly or indirectly contractors' businesses and
additional activities, which may include the decision to hire
consultants to persuade employees.
The revision will increase transparency about these circumstances
by ensuring that Form LM-10 reports include which federal contractors
and subcontractors are engaging in persuader, surveillance, and unfair
labor practice activities. Confirming a filer's status as a federal
contractor, as well as its UEI and the federal agency involved, as part
of a full explanation of reportable activities will provide a method
for the public and employees to quickly identify whether a filer is a
federal contractor.
E. Including the Unique Entity Identifier Will Prevent Confusion and
Ease Access
Multiple commenters supported the requirement to provide the Unique
Entity Identifier (UEI) on Form LM-10. An international union commented
that requiring certain filers to provide their UEIs on the Form LM-10
is critical to avoid confusion. Another international labor
organization agreed, noting that the revision would allow for ``better
identification of filing employers through the use of the UEI[.]'' The
Department agrees that the requirement that certain filers provide
their UEI, if they have one, will avoid confusion and allow the public
and employees to more easily confirm the identity of filers who are
federal contractors. It will also ensure other, more detailed,
information regarding federal contracts is easily obtainable to
employees and the general public. Two or more employers may have a
similar name, which can create difficulty for workers and the public in
determining whether the employer is, in fact, receiving federal funds.
Individual employers often use multiple names, including trade,
business, assumed, or fictitious names, such as a DBA (``doing business
as'') designation. Nevertheless, all federal prime contractors have
their own individual identifier to seek and secure federal contracts,
which can more explicitly link an employer to a particular federal
contract.\11\ Requiring employers to provide this federal contract
identifier on the Form LM-10 furthers the congressional purpose of
detailed employer reporting under the LMRDA, 29 U.S.C. 401, 433,
because members of the public and employees will be able to more easily
distinguish companies with similar names or locate reports on companies
that have changed their names. This information can also help employees
and the general public to more expeditiously search detailed government
contract data for these employers in the SAM.gov (System for Award
Management system) and USASpending.gov websites. By using the UEI,
employees and the general public can be certain that the detailed
contract information available in the SAM System, for example, is an
award granted to the specific employer who has filed the Form LM-10.
---------------------------------------------------------------------------
\11\ See Federal Acquisition Regulations System Sec. 4.605(b).
---------------------------------------------------------------------------
F. The Revisions Do Not Create a Significant Burden on Employers
By using existing definitions and requiring reporting of
information easily
[[Page 49238]]
accessible to the filers, the Department has avoided imposing any
significant burden on filers. As discussed above, the Form LM-10 uses a
list of definitions adopted from the implementing regulations of E.O.
13496 (Notification of Employee Rights Under Federal Labor Laws) at 29
CFR 471.1. The Department expects that federal contractors and
subcontractors are already familiar with these definitions because they
are also, with minimal changes, the same definitions that already
govern Federal contractors and subcontractors under E.O. 11246, Equal
Employment Opportunity, and its implementing regulations. See 41 CFR
60-1.3 (definitions regarding obligations of federal contractors and
subcontractors). Executive Order 11246 prohibits federal contractors
and federally assisted construction contractors and subcontractors who
do over $10,000 in Government business in one year from discriminating
in employment decisions on the basis of race, color, religion, sex,
sexual orientation, gender identity or national origin. The E.O. also
requires Government contractors to take affirmative action to ensure
that equal employment opportunity is provided in all aspects of
employment. Additionally, E.O. 11246 prohibits federal contractors and
subcontractors from, under certain circumstances, taking adverse
employment actions against applicants and employees for asking about,
discussing, or sharing information about their pay or the pay of their
co[hyphen]workers. E.O. 11246 is enforced by the Department's Office of
Federal Contract Compliance Programs (OFCCP) and covers approximately
one-fifth of the entire U.S. labor force. E.O. 11246's requirements are
incorporated in applicable government contracts or subcontracts and
includes nondiscrimination, notice posting,\12\ annual reporting,\13\
record keeping,\14\ and, for contractors that meet certain threshold
requirements, development and maintenance of a written affirmative
action program,\15\ among other requirements. Therefore, the Department
expects that all filers who are federal contractors and subcontractors
will already know their status as such under E.O. 11246 and its
implementing regulations, see 41 CFR 60-1.3 and 60-1.5, and that most
filers are able to easily identify the information required for Item
12.b--their UEI and federal contracting agency or agencies.
---------------------------------------------------------------------------
\12\ Notices to be posted, 41 CFR 60-1.43 (2022).
\13\ Reports and other Required Information, CFR 60-1.7 (2022).
\14\ Record Retention, 41 CFR 60-1.12 (2022).
\15\ Affirmative Acton Programs, Sec. 60-1.40; 60-2.1 (2022).
---------------------------------------------------------------------------
In addition, federal contractors and subcontractors are required to
comply with E.O. 13496. Executive Order 13496 applies to federal
contractors and subcontractors subject to the NLRA. Pursuant to E.O.
13496, covered employers are already required to know whether they are
federal contractors or subcontractors under the definitions used in
this revision and, if they are, to post a notice and to inform
employees of their rights under the NLRA, the primary law governing
relations between unions and employers in the private sector. See 29
CFR 471. The notice, prescribed in the regulations of the Department,
informs employees of federal contractors and subcontractors of their
rights under the NLRA to organize and bargain collectively with their
employers and to engage in other protected concerted activity. The
Department expects that most filers are subject to the NLRA.\16\
---------------------------------------------------------------------------
\16\ Employers covered by the Railway Labor Act (RLA) are not
covered by E.O. 13496, however, both NLRA and RLA employers are
subject to the reporting requirements of the LMRDA. Thus, RLA
employers may need more time to identify which employees who are the
subject of the LM-10 report have duties relating to the performance
of the Federal contract or subcontract. The Department expects that
only a small number of filers will be Federal contractors or
subcontractors subject to the RLA. The Department received no
comments on the issues of RLA coverage or lack of NLRA coverage. The
Department received no comments from anyone--including specifically
from RLA-covered employers or their representatives--on this
subject. See: https://www.nlrb.gov/reports/nlrb-case-activity-reports/representation-cases/election/election-statistics and
https://nmb.gov/NMB_Application/wp-content/uploads/2021/12/FY-2021-NMB-Performance-and-Accountability-Report-PAR.pdf.
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Several supportive comments discussed the minimal burden of the
revision. Multiple comments indicated the limited nature of the burden
on employers given the minimal amounts of time and effort the revisions
necessitate, and that, for whatever burden does exist, it is justified
by the substantial benefit to employees and the public.
As one union commenter stated, ``OLMS is not imposing an onerous
burden on employers with these minor revisions,'' and the revisions
``are minor but important changes to employer's reporting
requirements.'' The commenter went on to say that ``the proposed
revision does not change which employers must file Form LM-10 or when
or how often they must be filed. The revision mainly requires employers
to check a box disclosing if they are federal contractors and, if so,
to provide a federal unique entity identifier if applicable, and
identify the federal agencies involved[.]'' Another union commenter
echoed the sentiment: ``This is a modest revision that results in
almost no additional burden on employer filers and will provide
important information to OLMS, employees, the public, and other federal
agencies.'' And, as another union commenter stated, ``it is worth
noting that the proposed rule's required disclosures are narrowly
tailored to be minimally invasive on employers.''
Comments highlighted that the form offers little burden increase.
``This small change will reap significant benefits while creating
almost no additional administrative burden for LM-10 filers,'' one
commenter stated. As another indicated, ``the Agency is proposing to
incorporate the same definitions of `contract,' `contracting agency,'
`contractor' and other related terms that are included in E.O. 13496,
which is currently effective and imposes obligations on federal
contractors and subcontractors.'' The comment continued to rightly
point out ``federal contractors and subcontractors are generally
required to obtain a Unique Entity Identifier (`UEI') as a condition of
performing work on federal contracts.''
As described in the burden analyses below, in Section VI.A(1), it
will take filers on average five minutes to gather and enter the
information required by this revision. This cost is not significant.
While the Department recognizes the merits of the argument from some
commenters that there should be no increase in the time estimate for
the LM-10 due to this de minimis burden, especially as many filers will
simply check ``No,'' the entry of the UEI and federal contracting
agency(ies) will take slightly more time and the Department believes
five minutes is a reasonable estimate for filers who have to complete
it.
V. Additional Comments Received
A. Comments Concerning Potential Duplication of Existing Reporting
Requirements
One comment, filed by Members of Congress, opposed the proposed
Form LM-10 revision because the commenters believe requesting
contractor status on the Form LM-10 elicits duplicative information.
The commenters reasoned that because the public can determine whether
an employer has contracts with the federal government through other
governmental systems, requesting federal contractor status information
for Form LM-10 is contrary to E.O. 12866. Executive Order 12866 directs
federal agencies to issue
[[Page 49239]]
rules that ``are required by law, are necessary to interpret the law,
or are made necessary by compelling public need such as material
failures of private markets to protect or improve the health and safety
of the public, the environment, or the well-being of the American
people.'' The comment asserts that an employee could search the Federal
Procurement Data System (FPDS) or USASpending.gov websites to determine
whether their employer has contracts with the federal government. The
comment also mentions that a listing of federal government contractors
is available from the Small Business Administration and the General
Services Administration.
While the Department acknowledges that some information on
contractor status is available on other government websites, the
Department disagrees that any duplication in public disclosure of
contractor status negates or undermines the need for this revision or
is contrary to E.O. 12866. The websites and databases where this
information is currently available are either not designed for the
general public or provide a far greater level of detail about federal
contracts, which is not duplicated in the Form LM-10 by this rule.
Also, as mentioned above, this minor addition to the Form LM-10 will
significantly reduce confusion between employers with similar names, as
it can readily distinguish which employer is which in these expansive
databases. Thus, consistent with E.O. 12866, the Department has
identified a problem and chosen a method which is most cost-effective
and tailored to impose minimal burden on regulated entities. The
information required by the revision, while minimal, is not otherwise
easily available to the public. The change places almost no burden at
all on reporting entities while, in contrast, the alternative solution
offered by the comment would place the burden to research the
reportable information on the very population for whom disclosure is
intended to benefit.
For example, subcontractor information is available on the GSA
Electronic Subcontracting Reporting System (ESRS), but this information
is made available only to individuals with a registered government or
contractor log-in account. The LM-10 forms are offered for public
viewing on the OLMS Online Public Disclosure Room (OPDR), which does
not require a registered government or contractor account. Including
contractor identification information on the Form LM-10, available on
the OPDR, will allow employees and the public to easily identify all
filers who are paid under federal contracts, regardless of whether they
are a prime contractor or a subcontractor. This reporting will provide
a more transparent representation of when federal dollars go to filers
who may also make disbursements to labor relations consultants designed
to persuade employees regarding their rights to organize and bargain
collectively or surveil employees. See Form LM-10, Items 8.b. through
8.f. This information cannot be readily ascertained from the SBA or GSA
contractor lists.
The reporting of contractor status on the Form LM-10 is limited to
identifying information and is therefore minimally duplicative of the
more detailed reporting on the USASpending.gov website or what is
listed on the GSA and SBA contractor lists. OLMS only requires the UEI
number and the identification of the contracting agency and no other
details of the contracts provided on other government lists. The UEI
number required by the Department is the same number reported on the
USASpending.gov website, but the final rule does not require
duplicative reporting of the detailed financial information on federal
contracts provided on that website.
The USASpending.gov website is compiled by the U.S. Department of
the Treasury under the authority of the Federal Funding Accountability
and Transparency Act of 2006 (FFATA), as amended by the Digital
Accountability and Transparency Act (DATA Act), codified at 31 U.S.C.
6101 note. Consistent with the FFATA, detailed information about
federal awards must be made publicly available on USASpending.gov. The
DATA Act expanded the FFATA for purposes that include linking ``federal
contract, loan, and grant spending information to programs of federal
agencies to enable taxpayers and policy makers to track federal
spending more effectively. . . .'' \17\ The website is generally
adapted for the American public to show constituents how the federal
government spends money every year. Federal agencies covered by the
DATA Act report spending data to Treasury for posting on the website
using standardized data elements, and Treasury also gathers required
Federal agency spending data from financial and other government
systems (such as the Federal Procurement Data System (FPDS)). Prime
contractors and subcontractors that received Federal awards directly
from federal agencies also self-report data on their awards to the
FFATA Subaward Reporting System (FSRS). The FSRS is a component of ESRS
(mentioned above) but requires different reports than ESRS. FSRS
requires reporting of executive compensation and sub-award recipient
information by prime contractors, while ESRS requires reporting of the
Individual Subcontract Report, Summary Subcontract Report, and
Commercial Report, required, in effect, under the FFATA. One purpose of
the DATA Act was to ``simplify reporting requirements for entities
receiving Federal funds by streamlining reporting requirements. . . .''
\18\ It also provides that the method of collection and reporting data,
in the context of subawards, shall minimize the burdens on Federal
recipients and sub-recipients.\19\ Requesting contractor identification
numbers is not an overly burdensome or a duplication of financial
reporting, as it does not require any additional information required
by the FFATA and DATA Act, but simply requires the reporting of an
identification number already known to a federal contractor. For
example, employers filing a Form LM-10 are not required to include
information on whether contracts are awarded to Small Businesses,
Women-Owned Small Businesses, Veteran-Owned Small Business, and related
characteristics, which are to be reported to the ESRS. Reporting
contractor identification numbers on the Form LM-10 is not
unnecessarily burdensome for federal award recipients because the
employer is already aware of their identification number from reporting
under the FFATA.
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\17\ 31 U.S.C. 6101 note (DATA Act--Digital Accountability and
Transparency Act of 2014, Pub. sec. 2(1)).
\18\ Public Law 113-101, sec. 2(3).
\19\ 31 U.S.C. 6101 note (FFATA sec. 2(d)(2)(A)); see also 31
U.S.C. 6101 note (DATA Act sec. 5) (discussing, in general, efforts
to avoid unnecessary duplication and burdensome reporting).
---------------------------------------------------------------------------
An international union commenter observed that there is ``a
significant gap in data concerning the scope of dissuasion campaigns
undertaken by federal contractors and subcontractors'' to dissuade
employees from joining a union. A nonpartisan organization agreed that
the revision will help fill this information gap. Nine commenters
supported the revision so that there will be a public record of which
contractors engage in persuader activities. The Department agrees that
such a public record is consistent with congressional intent to
publicize a ``full explanation'' of reportable activities and will
bridge an important information gap. 29 U.S.C. 433(a). These benefits
outweigh any
[[Page 49240]]
minor duplication of contractor identifying information in government
databases, especially when, as discussed above, some employees are not
already aware that their employers are federal contractors. By
including federal contractor identification on LM-10 Forms, the
Department is linking federal contractor status with employer reporting
to the Department to enable workers and the general public to easily
evaluate federal spending within the context of the LMRDA. As mentioned
above, the GSA and SBA websites provide lists of contractors within the
context of those agencies. The SBA directory, for example, provides a
listing of those contractors who have subcontracting plans with small
businesses. Neither GSA nor SBA publishes reportable information under
the LMRDA. Including basic identifying information about federal
contractor status on LM-10 Forms allows OLMS, employees, and the
general public to have all the relevant information in one, easily
accessible reporting database pursuant to the LMRDA.
Similarly, Federal contractor status as required by OLMS in this
revision provides less detailed information than the reporting required
by the GSA SAM.gov website and is easier for the public to access and
use. SAM.gov is generally designed for contractors who may, among other
tasks, access publicly available award data and federal assistance
listings. SAM.gov includes contract data derived from the FPDS, as well
as some additional information submitted by SAM.gov contractor account
users. With a SAM.gov user account, one can analyze federal spending by
federal organization, geographical area, business demographics, and
product or service type, among other characteristics. The Department
does not seek to duplicate this detailed contract information provided
on SAM.gov, but rather is requesting only for Form LM-10 filers to
report their UEI and federal agency involved. Additionally, SAM.gov
does not focus on LMRDA-reportable activities. In contrast to SAM.gov,
the OLMS OPDR provides Form LM-10 data to the public and does so
without the barrier of a user account. Therefore, any duplication of
information on the Form LM-10 poses a minimal burden, if any, to the
reporting entity and bridges an important information gap by making
this information more easily accessible to the general public. OLMS,
employees, and the public should not have to research voluminous
collections of contracting information and multiple websites to glean
which federal contracts are being fulfilled by employees who are
subjected to persuader, surveillance, or unfair labor practice
activity. Employees and the general public should have the ability, by
getting the UEI, to learn the extent to which the filer engages in
reportable activity while providing its goods and services to the
Federal government.
Disclosing federal contractor status on the Form LM-10 is also
consistent with E.O. 12866. Taken holistically, E.O. 12866 requires
that a rulemaking identify a problem it intends to address, choose a
method which is most cost-effective, and tailor that method to impose
the least burden on society. Through its enforcement of the LMRDA, the
Department ensures public, transparent reporting of certain activities
that impact protected labor rights. The Department determined that
filers engaging in activities that may impact protected labor rights
should disclose whether they hold government contracts. Through this
rule, the Department has chosen to require minimal information about
federal contractor status. While the request of federal contractor
status on Form LM-10 may also serve the function of the DATA Act's
interest in linking federal expenditures to federal agency programs, as
mentioned above, this is wholly distinct from the problem of
transparent reporting under the LMRDA. Therefore, while the federal
contractor status information may be available elsewhere, it does not
make the regulation, in total, duplicative as to be in contravention of
E.O. 12866.
The revision will allow employees access to the ``full
explanation'' and circumstances of employers' reportable activity,
including federal contractor status, in a location and context in which
it is more accessible and useful to them. While general information
about federal contracts is provided via other means, including this
information on the Form LM-10 furthers the interest of transparency as
intended by the LMRDA. Employees, union organizers, and the general
public who are reviewing LM forms are more accustomed to reviewing
documents like the Form LM-10 than extensive procurement- and employer-
centric database platforms. Further, an employee or member of the
public can more easily ascertain from the revised Form LM-10 whether
the federal contract directly impacts a specified employment group
because the federal contract identification is provided alongside
information about the employer and subject group of employees. Minor
redundancies in reportable information do not outweigh the benefits of
having all LMRDA reportable information in one, easily accessible site
on the Department's website.
The LMRDA reporting regime emphasizes access to information at the
cost of minor redundancies. By statute, the information reported on one
LM form may well appear in another LM form. Employer reporting (under
29 U.S.C. 433(a)) consists of the same information reported by labor
relations consultants (under 29 U.S.C. 433(b)). In addition, employers
report (under 29 U.S.C. 433(a)(1)) the same payments reported as
receipts by labor unions (under 29 U.S.C. 431(b)(2)). Further,
employers report (under 29 U.S.C. 433(a)(1)) the same payments reported
by labor union officers and employees (under 29 U.S.C. 432). Plainly,
therefore, the LMRDA was constructed to allow the public to more easily
find relevant information by putting identical information in different
reports targeted to different audiences.
In addition, this revision is similar to other Department
requirements that include minor redundancies and cross-references to
information provided to other governmental agencies in more depth. For
example, on Form LM-2, labor organizations are required to report
whether they have any political action committees (PAC), the full name
of each PAC, and in addition, they must list the name of any government
agency with which the PAC has a publicly available report, and the
relevant file number of the PAC.\20\ Despite being arguably redundant,
these disclosures allow for a greater degree of transparency for union
members and the public, by allowing viewers of the reports to connect
such report with other labor related disclosures. The revision follows
this same pattern when it takes three discrete pieces of information
from locations where those interested in persuader reporting are not
likely to look and brings it into the Form LM-10 where those who are
interested will easily come across it.
---------------------------------------------------------------------------
\20\ LM-2 Instructions, Item 11, Item 69.
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B. Comments Concerning First Amendment Protected Activities and Other
Employee and Employer Rights
Two comments opposed the proposed Form LM-10 revision because, they
argued, the revision would have a ``chilling effect'' on contractors'
right to engage in First Amendment-protected speech. The commenters
asserted that the Department intends the revision to discourage lawful
persuader activities by federal contractors. One commenter was
concerned that the revision would
[[Page 49241]]
``restrict fair and open competition and discriminate against nonunion
construction workers and businesses.'' The commenters noted that under
the LMRDA, employers are permitted to hire outside labor relations
consultants, including attorneys, to help persuade their employees
regarding union organizing or collective bargaining representation. The
commenters believed that the revision would increase public pressure on
federal contractors and will assist advocacy efforts against employers.
The commenters opined that ``the clear intent of the proposed rule is
to encourage labor unions and other pro-union advocates to pressure
federal agencies to stop awarding contracts to federal contractors who
engage in lawful persuader activity.'' The commenters expressed concern
that the government will use the information collected as a result of
the revision to disqualify companies that engage in persuader activity
from being awarded federal contracts.\21\ The Department disagrees with
these comments. The commenters' concern about a chilling effect appears
purely speculative as they have not given any examples of how revealing
basic identifying information of employers engaging in reportable
activity has chilled speech or led to federal agencies barring or
disqualifying employers from federal contracting. The argument also
assumes bad faith on the part of labor organizations and federal
agencies which the comment presumes will not comply with procurement
standards.
---------------------------------------------------------------------------
\21\ One commenter stated a fear of being ``blacklisted'' as a
federal contractor as a specific potential cause of the chilling
effect. Another was ``concerned the proposed rule will be used to
steer federal contracts away from companies that exercise their
right to speak with their employees about unionization.''
---------------------------------------------------------------------------
There are safeguards built into the procurement process, i.e., how
agencies select successful bidders on contracts, that protect against
the kinds of harm the commenters envision. When awarding contracts,
agencies are generally required to follow strict rules designed to
promote open and fair competition among vendors, without any improper
bias or inappropriate consideration. That includes requirements for
announcement in advance of the criteria to be used in selecting the
winning firms. See, for example, Federal Acquisition Regulation (FAR)
(48 CFR) 15.203(a), on the content of requests for proposals, and FAR
15.304(d), on evaluation factors and significant subfactors. See also
FAR 3.101-1 which sets strict standards of conduct for the acquisition
workforce, including ``complete impartiality'' and ``preferential
treatment for none.'' In cases where there is reason to believe a firm
has engaged in conduct that may be a cause for debarment or suspension,
agencies must follow suspension and debarment regulations at FAR
Subpart 9.4, Debarment, Suspension, and Ineligibility, or parallel
suspension and debarment rules at Part 180 of Title 2 of the Code of
Federal Regulations, for non-procurement transactions. Those suspension
and debarment rules provide firms proposed for debarment or that are
being suspended notice of such action and an opportunity to contest
such action. See, for example, FAR 9.406-3, Procedures.
These commentors misinterpret First Amendment jurisprudence, and
the Department is not persuaded by their speculative assertions.
Initially, there is some tension between the commenters' concern that
the Department is unnecessarily duplicating information and their
concern that the disclosure of this already available information on
the LM-10 will have a chilling effect. While the Department agrees that
the revision will make contractor status available in a new context,
the commenters' free speech concerns are both speculative and
unsupported by First Amendment precedent.
The argument that the revision will discourage lawful persuader
activities by federal contractors, as some commenters fear, is
unsupported because persuader activities have been reported and
disclosed since the inception of Form LM-10 reporting, yet no commenter
identified evidence of a chilling effect. As discussed above, the Form
LM-10 has always required filers to disclose the name of the employer,
the reportable activity, and a ``full explanation of the
circumstances'' of the activity, which encompassed identification of
the group of employees subject to that activity. Federal contracting
agencies have long had the means to identify federal contractors who
also file LM-10 reports. No commenters identified evidence of
contractors being barred, disqualified, ``blacklisted,'' or steered
away from federal contracting as a result of such connections. If being
publicly linked to persuader activity had a negative impact on an
employer's ability to obtain federal contracts, that issue would likely
have already arisen. The placement of this existing, publicly available
information in the convenient Form LM-10 report does not inflict a
constitutional injury, as discussed below.
In multiple opinions, the Supreme Court has held that transparency
promotes informed decision making amongst shareholders and the
electorate, rather than chilling speech. See Citizens United v. Fed.
Election Comm'n, 558 U.S. 310 (2010); McConnell v. Fed. Election
Comm'n, 540 U.S. 93 (2003); Buckley v. Valeo, 424 U.S. 1 (1976). In
Citizens United, the Court stated that ``disclosure permits citizens
and shareholders to react to the speech of corporate entities in a
proper way. This transparency enables the electorate to make informed
decisions and give proper weight to different speakers and messages.''
Citizens United, 558 U.S. at 371. In upholding the disclosure
requirements of the statute there at issue, the Court discussed Buckley
v. Valeo and the Court's later opinion in McConnell and instructed
that: ``Disclaimer and disclosure requirements may burden the ability
to speak, but they . . . `do not prevent anyone from speaking'; rather
they help citizens to `make informed choices in the political
marketplace.' '' 558 U.S. at 367 (internal citations and quotations
omitted). The interests served by requiring employers to report on
persuader and surveillance activities are also congruent with those
interests served by disclosure provisions in federal and state laws
regulating lobbyists.\22\
---------------------------------------------------------------------------
\22\ See U.S. v. Harriss, 347 U.S. 612, 625-626 (1954) (holding
that ``those who for hire attempt to influence legislation'' may be
required to disclose the sources and amounts of the funds they
receive to undertake lobbying activities); accord, e.g., Fla. League
of Prof'l Lobbyists, Inc. v. Meggs, 87 F.3d 457, 460 (11th Cir.
1996) (upholding state lobbyist disclosure statutes in light of
state interest in helping citizens ``apprais[e] the integrity and
performance of officeholders and candidates, in view of the
pressures they face''). See also Nat'l Ass'n of Mfrs. v. Taylor, 582
F.3d 1, 9-10 (D.C. Cir. 2009) (upholding requirement that registered
lobbyists disclose the identity of organizations that made monetary
contributions and actively participated in or controlled the
registrant's lobbying activities); Kimbell v. Hooper, 164 Vt. 80,
85-88, 665 A.2d 44 (1995) (upholding state lobbying statute against
First Amendment challenge); Gmerek v. State Ethics Comm'n, 569 Pa.
579, 595, n. 1, 807 A.2d 812, 822 (2002) (dissent) (collects cases
in which state lobbying disclosure laws were upheld against First
Amendment and other challenges).
---------------------------------------------------------------------------
In support of its argument that the proposed revision would chill
LM-10 filers' protected speech, one commenter cited Chamber of Commerce
v. Brown, 554 U.S. 60 (2008). This commenter argued that the proposed
revision is invalid for the same reasons as those relied on by the U.S.
Supreme Court in striking down a California State law, which prohibited
certain employers who received certain state funds from using such
funds to ``assist, promote, or
[[Page 49242]]
deter union organizing.'' Id. at 62. The decision in Brown was based on
the Court's determination that this prohibition was preempted by
Section 8(c) of the NLRA because it regulated activity (non-coercive
employer speech on the subject of union organizing) that Congress
intended to leave unregulated. Id. at 68-69.
The Department, as discussed above, has explicit authority from
Congress to prescribe the form of reports that employers must file to
disclose certain payments, including lawful payments, related to their
activities around union organizing, collective bargaining, and
surveillance of union activity. 29 U.S.C. 433, 438. The revision does
not change or expand the payments or activities on which employers must
report. Accordingly, there is no speech that was formerly protected
from disclosure that this revision now brings to light. It simply
requires current filers to provide additional, basic information about
their status as a federal contractor, which will promote the
congressional interest in free debate around issues of union organizing
and collective bargaining.
The Supreme Court has also held that it would not strike down a
statute based on speculative arguments, particularly those relating to
assertions that amount to ``self-censorship'' or, in this case, self-
censorship for fear of being disqualified as a federal contractor. U.S.
v. Harriss, 347 U.S. 612, 626 (1954) (holding that ``those who for hire
attempt to influence legislation'' may be required to disclose the
sources and amounts of the funds they receive to undertake lobbying
activities). The Court stated that the hypothetical hazards of self-
censorship or restraint are at most indirect and too remote to require
striking down a statute which on its face is otherwise plainly within
the area of congressional power and is designed to safeguard a vital
national interest. Id. Indeed, the Court has held that those resisting
disclosure can prevail under the First Amendment if they can show ``a
reasonable probability that the compelled disclosure [of personal
information] will subject them to threats, harassment, or reprisals
from either Government officials or private parties.'' John Doe No. 1
v. Reed, 561 U.S. 186, 200 (2010) (upholding the state of Washington's
Public Records Act requirements making referendum petitions available
to the public), citing Buckley v. Valeo, 424 U.S. 1, 74 (1976). The
Department is requiring limited additional disclosure that is within
its delegated authority under section 208 of the LMRDA. The commenters
have not shown any actual basis or reasonable probability for their
fear of being disqualified or steered away from federal contracting due
to revealing their contractor status on the Form LM-10.
Moreover, the Courts of Appeals for the Fourth and Sixth Circuits,
in Master Printers of America and Humphreys, determined that a showing
of threats, harassment, or reprisals to specific individuals must be
shown to prove that government regulation will substantially chill free
speech. Master Printers of America v. Donovan, 751 F.2d 700, 704 (4th
Cir. 1984); Humphreys, Hutcheson and Mosely v. Donovan, 755 F.2d 1211,
1220 (6th Cir. 1985). In Master Printers of America and Humphreys, the
Courts of Appeals for the Fourth and Sixth Circuits focused on four
factors in determining whether section 203(b) of the LMRDA had a
deterrent effect and therefore violated free speech rights: (1) the
degree of infringement on free speech; (2) the importance of the
governmental interest protected by the LMRDA; (3) whether a
``substantial relation'' exists between the governmental interest and
the information required to be disclosed; and (4) the closeness of the
fit between the LMRDA and the governmental interest it purports to
further. Master Printers of America, 751 F.2d at 704; Humphreys, 755
F.2d at 1220.
The Fourth Circuit in Master Printers of America determined that
the challenger had not met its burden of showing that the section 203
disclosures had exposed its members to economic reprisal, loss of
employment, threat of physical coercion and other manifestations of
public hostility directed at specific individuals necessary to
establish a ``deterrent effect.'' 751 F.2d at 704-705. In Humphreys,
the Sixth Circuit also rejected First Amendment challenges to the
disclosure obligation under section 203. The court concluded that the
persuader law firm had failed to meet the ``deterrent effect'' standard
for demonstrating an unconstitutional violation of its right to freely
associate. 755 F. 2d at 1220-1222. The court rejected the persuader's
free speech claim, ruling instead that the disclosures ``are
unquestionably `substantially' related to the government's compelling
interest'' in preventing improper activities in labor-management
relations. 755 F. 2d at 1222. In support of that conclusion, the court
observed that the required disclosures would help employees exercise
their right to support or not support a union, ``enabl[ing] employees
in the labor relations setting, like voters in the political arena, to
understand the source of the information they are given during the
course of a labor election campaign.'' Id. The courts were able to
examine evidence of the alleged chilling effect in reaching their
conclusions. Neither the Department nor the commenters, of course, have
at this stage of the final rule the benefit of any actual evidence to
review the effects of requiring the disclosure of whether an employer
is a federal contractor on the Form LM-10.
The requirement that a filer indicate whether it was a federal
contractor or subcontractor in the prior fiscal year, and include
related identification information, does not restrict employers from
hiring outside labor relations consultants, including attorneys, to
persuade employees regarding union organizing or collective bargaining,
any more than the existing LM-10 and LM-20 reporting requirements. The
revision does not discourage lawful persuader activities as labor
relations consultants may still persuade employees in conformity with
the NLRA and First Amendment rights of the employer and labor relations
consultants. The requirement that employers report labor relations
consultant activity is unchanged. In addition, both the public and the
employees whose rights are at issue have an interest in more fully
understanding the financial circumstances of employers who surveil
employees, commit unfair labor practices, or persuade employees
regarding their rights to organize or bargain collectively. See S. Rep.
187 at 10-11, LMRDA Leg. Hist. at 406-07.
Next, a commenter argued that the revision is preempted by the NLRA
because it affects activity that is allowed by that statute. The
Department disagrees. As discussed above, Congress was aware that some
reportable activity would be lawful under the NLRA and still chose to
require that that same employer activity be publicly reportable under
the LMRDA. See S. No. 86-187. Rep, at 81-82, reprinted in 1 LMRDA Leg.
Hist., at 477-478.
One commenter said that the revision will support employees and the
public as they choose whether to ``engage in their own appropriate
First Amendment protected persuasion activity.'' Another commenter
asserted that it is ``improper for OLMS to collect information with the
objective of encouraging the media and advocacy groups to use it to
browbeat federal contractors who engage in persuader activity.'' The
Department rejects the contention that the revision is intended to
encourage the browbeating of federal contractors. Like the contention
above that the revision will chill speech, it is speculative and
unsupported by the
[[Page 49243]]
facts. Both presuppose that an employer that discloses persuader
activity and federal contractor status will be subjected to
intimidation. However, LM-10 filers' persuader activities have long
been available to the public by the very same forms, and the filers'
federal contract status has always been discoverable by the public
through different data sets, yet no commenter asserted that
``browbeating'' has occurred. As was stated in the proposed revision,
the objective of these revisions is to provide increased transparency
for the public as a whole. This public exposure will allow for an open
public discussion and debate, not intimidation, about the prevalence of
persuader activity and the extent to which specific federal agencies
might be indirectly supporting such activities by doing business with
employers that engage in persuader activities.
One commenter, a non-profit research and advocacy organization,
believed that the revisions would result in small and mid-sized
businesses not seeking legal advice or counsel on their rights and
responsibilities under the NLRA or the Railway Labor Act. The commenter
asserted that these smaller businesses ``are more likely to be run by
managers with little experience relating to collective bargaining and
consequently more need to seek outside legal counsel to advise them on
their legal rights and responsibilities.'' The commenter said that
these ``companies are less likely to seek that advice if doing so gets
them flagged on a public list.'' The commenter believed that the
``legal firms that these companies could afford are less likely to
provide this advice due to concern over targeted campaigns by union
activists.'' The commenter asserted that this ``will result in workers
being less-informed of their rights under those laws, as unions are
unlikely to fully explain rules that allow workers to opt out of
membership or to hold their union to account.'' Further, according to
the commenter, ``there is reason to be concerned that it could result
in workers being uninformed regarding the practical impact of
collective bargaining on their workplace and their relationship with
their employer, their rights under the Supreme Court's Beck decision
\23\ or any rights they may have if they reside in a state with a right
to work statute.'' The Department disagrees with the premise of this
comment because seeking legal advice does not trigger an employer's
duty to file a Form LM-10. See 29 U.S.C. 433(c). Therefore, the
commenters conclusions based on that premise are also unpersuasive.
Moreover, these employers already have a duty to file Form LM-10s for
any covered activity. The principal disclosures secured by the Form LM-
10 are unchanged; there is no evidence that the addition of a
government contractor checkbox would in itself chill any activities.
---------------------------------------------------------------------------
\23\ Communications Workers of Am. v. Beck, 487 U.S. 735 (1988).
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The comments also referenced the right of employees to obtain
balanced and informed input from both the employer and the labor
organization when employees decide whether to unionize. Again, the
commenters seemed concerned that the revision would affect this balance
by chilling employer free speech or making decisions for workers
instead of allowing workers to make their own organizing and collective
bargaining decisions. As discussed above, the Department disagrees. The
commenters offered no specific examples of chilled speech, and the
revision takes no position on whether or how employees should exercise
their rights--it simply enables employees to easily access information
that gives them more context about those decisions.
C. Comments Outside the Scope of This Rulemaking
Some comments offered perspectives on issues that fell outside the
scope of this rulemaking or offered reasons for the revision upon which
the Department does not rely. While not amongst the reasons that the
Department is adopting the revision, some commenters provided examples
of how the information made available by the revision might be helpful
outside the LMRDA context, which the Department will address in this
section. Although the Department does not rely on these examples as a
reason to promulgate the revision, the collateral consequences of the
rule may provide additional benefits for the public. For example, a
union commenter highlighted that the form may prompt employees of
federal contractors to become aware of protections afforded to them
under the Walsh-Healey Public Contracts Act. Similarly, the commenter
outlined how a similar dynamic exists between private sector service
employees and the McNamara-O'Hara Service Contract Act, as well as
other Executive Orders. And regardless of their industry, the commenter
believes employees should be made aware of their employer's status
because all federal contractor employees are protected when
whistleblowing under the False Claims Act when reporting certain
instances in which their employer attempts to defraud the government.
The Department believes these potential benefits are excellent examples
of the derivative good that the increased transparency of the revisions
will provide.
Further, even knowing that the employer is a contractor, employees
do not necessarily know how and where they can find additional
information about the contractor. With knowledge of the contractor
status and the UEI, workers and the public will be able to connect the
Form LM-10 reports with other disclosures, as mentioned by this
commenter. This cross-referencing furthers transparency in a variety of
areas while limiting the burden on filers. Therefore, the efficient
accessibility of federal contractor status is in the interest of the
American public and any minimal duplication that may exist serves the
interest of transparency.
Regarding revisions to Form LM-10, many unions offered an array of
amendments to other items on the form, in addition to Item 12. One
policy center commenter suggested that the Department ``should look
into requiring that federally-assisted contractors check a similar box,
along with state and local contractors.'' Such adjustments fall outside
the scope of the proposed revisions, and while it will not be
considered for adoption here, the Department will make note of this
request as it considers future rulemaking.
Multiple union commenters indicated that the Department must
significantly increase its Form LM-10 enforcement and offered
statistics on declining reports being filed over the last decade
despite this not being accompanied by a decrease in persuader activity.
One union commenter provided specific examples of particular employers
who, in the commenter's opinion, owed Form LM-10s. The Department
continues to enforce all provisions of the reporting requirements of
the LMRDA, including the Form LM-10, and any employee, union organizer,
or other member of the public may report instances in which it believes
a Form LM-10 is owed and has not been submitted by an employer.\24\
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\24\ Members of the public may submit information about entities
which need to report by emailing [email protected].
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A union commenter argued that the Form LM-10 should be filed as
soon as the employer engages the services of labor relations
consultants, offering immediate availability to the public. The LMRDA
does not offer flexibility in when the Form LM-10 (or any other
employer report) must be filed, explicitly requiring annual reporting
in Section 203(a) of the Act. 29 U.S.C.
[[Page 49244]]
433(a). The Form LM-20 documenting the labor relations consultant-side
of the persuader agreement, on the other hand, is due within 30 days of
the labor relations consultant entering into the agreement. 29 U.S.C.
433(b).
Multiple commenters advocated for additional minor changes. One
union commenter offered a number of additional changes to the LM-10 and
its instructions focused on providing more examples of reportable
activity under Items 8.b, 8.c, and 8.d. Another commenter outlined
various form sections and new, recommended form language. While the
Department agrees with providing additional examples of reportable
activity to increase compliance rates, this can be accomplished through
the publicly available Form LM-10 Frequently Asked Questions and other
compliance materials. Further alterations to the instructions and form
beyond those outlined in the revision proposal are out of the scope of
this rulemaking.
Some union commenters discussed the idea of updating the Electronic
Forms System to allow for cross-matching LM-20s and LM-21s to LM-10s.
These commenters, as well as others, also advocated vigorously that the
focus of any reporting clarifications should be regarding activity
pursuant to section 203(a)(2) and (3), 29 U.S.C. 433(a)(2) and (3), not
section 203(a)(4) and (5), 29 U.S.C. 433(a)(4) and (5), even offering
numerous examples for those provisions that they believe should be
explicitly stated in the instructions.\25\ These commenters offered
examples even for section 203(a)(4), emphasizing the holistic approach
that improving the Form LM-10 over time should take.
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\25\ Section 203 (a)(4) and (a)(5) require reporting in
association with an agreement or arrangement and payment to a labor
relations consultant or other independent contractor where an object
thereof, directly or indirectly, is to persuade employees to
exercise or not to exercise, or persuade employees as to the manner
of exercising, the right to organize and bargain collectively
through representatives of their own choosing, or undertakes to
supply such employer with information concerning the activities of
employees or a labor organization in connection with a labor dispute
involving such employer. 29 U.S.C. 433(a)(4)-(5). Whereas 203(a)(2)
and (a)(3) require the employer to file a report for payments to
employees with an object to persuade other employees to exercise or
not to exercise the right to organize and bargain collectively
through representatives of their own choosing or expenditures
wherein their object is to interfere with, restrain, or coerce
employees in the exercise of the right to organize and bargain
collectively through representatives of their own choosing, or is to
obtain information concerning the activities of employees or a labor
organization in connection with a labor dispute involving such
employer. Id. at 433(a)(2)-(3).
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While ultimately these concerns fall outside the scope of this
rulemaking, the Department is reviewing these examples and those
submitted by other commenters. Compliance assistance material, as
mentioned, is another excellent avenue for providing examples so that
employers understand the activity that they should report.
One comment advocated for specific factors that the government
should consider when awarding federal contracts. Another commenter said
that the revision is not necessary to prevent federal payments for
persuader activities because the current regulations regarding E.O.
13494 are sufficient. These topics are outside the scope of the
Department's rule. In making the revision, the Department is not
relying on any benefits it may provide in enforcement of E.O. 13494 or
other federal procurement standards.
D. The Revision May Provide Other Benefits to the Government
While not amongst the reasons that the Department is adopting the
revision, some commentors raised other benefits to the government,
outside of the LMRDA context, that the Department will address in this
section. First, regulations and an Executive Order prohibit federal
contractors from obtaining reimbursement from the Government for the
costs of any activities they undertake to persuade employees to
exercise or not to exercise, or concerning the manner of exercising,
the right to organize and bargain collectively. E.O. 13494, 74 FR 6101;
48 CFR 31.205-21. Several commenters noted that the LM-10 revision is
consistent with E.O. 13494. A union commenter remarked, ``this
[revision] will also serve an important governmental function . . .
enabl[ing] the public, the various federal contracting agencies,
Congress, OLMS, and any other federal agencies to better track the use
of federal taxpayer dollars and federal funds.'' A policy institute
commenter stated the new disclosure will make it easier for federal
agencies to identify the work that should not be reimbursed under
federal acquisition regulations and E.O. 13494. The Department agrees
that is a possible residual benefit of the revision. One individual
commenter stated ``[t]he federal government has a special interest in
the companies it gives federal contracts to and therefore should be
able to monitor which companies are federal contractors when looking at
the Form LM-10.'' Although these are not the Department's reasons for
the Form LM-10 revision, they may be secondary benefits of the rule.
Other commenters remarked on a need for the Department to work
closer with other agencies, especially the NLRB, to identify reportable
activities. While the information gained through the revision could aid
in efforts to prevent circumvention and evasion of reporting
requirements occurring among federal contractors, such efforts are
outside of the scope of this rule.
VI. Regulatory Procedures
A. Executive Order 12866 (Regulatory Planning and Review), Executive
Order 14094 (Modernizing Regulatory Review), and 13563 (Improving
Regulation and Regulatory Review)
Under E.O. 12866 (as amended by Executive Order 14094), the Office
of Management and Budget (OMB)'s Office of Information and Regulatory
Affairs determines whether a regulatory action is significant and,
therefore, subject to the requirements of the E.O. and review by OMB.
58 FR 51735. As amended by Executive Order 14094, section 3(f) of
Executive Order 12866 defines a ``significant regulatory action'' as a
regulatory action that is likely to result in a rule that may: (1) have
an annual effect on the economy of $200 million or more; or adversely
affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local, territorial, or tribal governments or
communities; (2) create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency; (3) materially alter
the budgetary impact of entitlements, grants, user fees or loan
programs or the rights and obligations of recipients thereof; or (4)
raise legal or policy issues for which centralized review would
meaningfully further the President's priorities or the principles set
forth in the Executive Order. OMB has determined that this revision is
a significant regulatory action under E.O. 12866.
Executive Order 13563 directs agencies to propose or adopt a
regulation only upon a reasoned determination that its benefits justify
its costs; the regulation is tailored to impose the least burden on
society, consistent with achieving the regulatory objectives; and in
choosing among alternative regulatory approaches, the agency has
selected those approaches that maximize net benefits. E.O. 13563
recognizes that some benefits are difficult to quantify and provides
that, where appropriate and permitted by law, agencies may consider and
discuss qualitative values that are difficult or impossible to
quantify, including equity, human dignity, fairness, and distributive
impacts.
[[Page 49245]]
1. Costs of the Updated Form LM-10 for Affected Employers
The Form LM-10 is filed by private business entities that engage in
certain financial transactions or arrangements, and these employer
entities only have reporting obligations during fiscal years in which
the entity makes such transactions or enters in such arrangements. As
such, the Form LM-10 is not an annually mandatory form, so not all
employers must file the Form LM-10 in a given year. Further, as has
been discussed, the revisions to the Form LM-10 do not add a new form
or remove any forms, nor does it expand or contract the circumstances
under which it is necessary for an employer to file an LM-10. This
revision slightly changes the structure of Item 12 by adding one
checkbox and two items for certain filers. The Department will account
for the potentially minimal costs of the slight changes to the
structure of Item 12.
Based upon estimates for the existing Form LM-10 and other LM
forms, the Department adopts its proposed estimate that the new Item
12.b. will take approximately 5 minutes to complete, thus adding
approximately 5 minutes of reporting burden to the existing Form LM-10
(which the current existing instructions estimate to take approximately
35 minutes to complete, including the current Item 12). Five minutes is
an estimate that takes into account that not all filers will be federal
contractors or subcontractors and not all federal contractors or
subcontractors that file will be required to complete the two lines in
Item 12.b.
The Department made this burden determination for the following
reasons. Some filers will spend zero minutes on Item 12.b. because,
after only checking ``Yes'' to Item 8.a., the form will automatically
check ``N/A'' and grey out the rest of Item 12.b. as no answer will be
required. Many filers will need less than 5 minutes to address Item
12.b. because they will only need to check ``No,'' to indicate that
they are not a federal contractor or subcontractor.
The Department does not attribute any burden to the revision's
clarification requiring the filer to provide identifying information
about the employees who are the subject of the employer's activities.
This has always been a requirement. See unrevised Item 12 (``Provide a
full explanation identifying the purpose and circumstances of the
payments, promises, agreements, or arrangements included in the report.
Your explanation must contain a detailed account of services rendered
or promised in exchange for promises or payments you have already made
or agreed to make. Your explanation must fully outline the conditions
and terms of all listed agreements.''). This necessarily includes
identifying certain payments, expenditures, agreements, and
arrangements regarding employees.
As described above, federal contractors and subcontractors subject
to reporting requirements are already aware of their UEI (if they have
one) and will need no more than 5 minutes to complete Item 12.b.
Checking ``Yes'' regarding their status as a federal contractor or
subcontractor will only take a few minutes because most federal
contractors and subcontractors are already required to be familiar with
the definitions here regarding that status, which are based on E.O.
11246 and E.O. 13496 and their implementing regulations. See 41 CFR 60-
1.3 (definitions regarding obligations of federal contractors and
subcontractors); 29 CFR 471 and note 3, supra (including eight
definitions OLMS adopts). The Department received some comments in
support of its time estimate and no comments indicating that
contractors need more time to complete Form LM-10 based on these
revisions or that the Department's estimate is inaccurate.
Similarly, most federal contractors and subcontractors should be
able to easily enter their UEI. See note 1, supra. If a filer does not
have a UEI, the filer should so state in Item 12.b. Along with their
UEI, federal contractors and subcontractors will enter the name of the
federal contracting agency(ies) on the two lines in Item 12.b. If
providing the name of a contracting agency would reveal classified
information, the filer may omit the name of the agency.
Employers covered by the Railway Labor Act (RLA) are not covered by
E.O. 13496. Executive Order 13496 applies to federal contractors and
subcontractors subject to the NLRA. Pursuant to E.O. 13496, NLRA
covered employers are required to know whether they are federal
contractors or subcontractors and, if they are, to post a notice and to
inform employees of their rights under the NLRA, the primary law
governing relations between unions and employers in the private sector.
See 29 CFR part 471. The notice, prescribed in the regulations of the
Department, informs employees of federal contractors and subcontractors
of their rights under the NLRA to organize and bargain collectively
with their employers and to engage in other protected concerted
activity. RLA employers do not have this posting requirement and
therefore may need more time to identify whether the employees who are
the subject of the LM-10 report have duties relating to the performance
of a federal contract or subcontract.
While some RLA-covered employers may need more than 5 minutes,
because they may not be immediately familiar with whether the subject
group of employees perform work on a federal contract or subcontract
(for Item 12.b.), the Department does not expect RLA-covered filers to
be as numerous as NLRA-covered filers. The Department presumes that the
large majority of employers that constitute federal contractors or
subcontractors would need no more than 5 minutes for Item 12.b.,
because they will be covered by the NLRA and therefore they will
already be required to retain information relevant to Item 12.b.,
including whether the subject group of employees performed work under
such contracts, pursuant to E.O. 13496 (Notification of Employee Rights
Under Federal Labor Law). No comments received opposed this view.
While a few filers may have a slightly higher time burden, and some
will have a time burden that is lower than 5 minutes, the Department
has accounted for this in determining the estimated time burden of 5
minutes. The Department asked for comment on this point, specifically
asking whether to increase the estimate to 15 minutes. Some commenters
noted that the additional time burden was insignificant or would be
substantially less than 5 minutes, and none of the commenters argued
for greater than 5 minutes. Thus, the Department adopts its five-minute
estimate.
The Department estimates that the 5 additional minutes, just as the
previous 35-minute total estimate, represents an estimate of affected
filers. Indeed, not all Form LM-10 filers will need to complete the new
Item 12.b.\26\ More specifically, filers need not fill out Item 12.b.
if they have only checked ``Yes'' to Item 8.a. Rather, only if a filer
answers ``Yes'' to any of Items 8.b.-8.f. would they need to answer
Item 12.b. Additionally, filers who check ``No'' on Item 12.b. will not
have to enter any further information in Item 12.b., further decreasing
the estimated time burden. Further, because the Form LM-10 represents a
situationally occurring reporting requirement rather than an annual
reporting requirement, it would be imprudent to try to estimate
differing burden levels associated with first-year
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\26\ In FY 22, based upon an electronic review of reports
submitted, OLMS received approximately 235 Form LM-10 reports
covering persuader-related transactions and agreements, among the
496 total Form LM-10 reports received during that year. See https://www.dol.gov/agencies/olms/data.
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[[Page 49246]]
exposure and subsequent exposures to the new questions.
To determine the cost increase per Form LM-10 filer associated with
the new Item 12, and as proposed, the Department utilized an approach
consistent with the information collection request (ICR) filed with the
Office of Management and Budget pursuant to the Paperwork Reduction Act
(PRA). In the existing ICR, the Department assumed that employers would
hire a lawyer to complete the form, and it derived the average hourly
salary for lawyers ($71.17) from the Occupational Employment and Wages
Survey, May 2021 survey (released in March 2022), Table 1, from the
Bureau of Labor Statistics (BLS), Occupational Employment Statistics
(OES) Program. See: https://www.bls.gov/oes/current/oes231011.htm.
Further, the Department determined the total compensation (salary plus
fringe benefits) by increasing the hourly wage rate by approximately
45.0 percent, which is the percentage total of the average hourly
benefits compensation figure ($12.52 in December 2021) over the average
hourly wage figure ($27.83 in December 2021). See Employer Costs for
Employee Compensation Summary, September 2021 (released in December
2021), from the BLS at http://www.bls.gov/news.release/ecec.nr0.htm.
Thus, the Department increased its estimate of the total hourly
compensation for lawyers to $103.20 ($71.17 x 1.450).
As such, the average individual employer filing the LM-10 as
modified under this rule can expect to incur an increased cost per year
of, approximately, $8.60 ($103.20 x 5/60 = $8.60).
Although not all Form LM-10 filers will need to complete Item
12.b., the Department nevertheless estimates that each of the
approximately 580 annual Form LM-10 filers (based upon a 5-year average
of submitted reports from FYs 18-22) will incur the additional 5
minutes of annual reporting burden. See: https://www.dol.gov/agencies/olms/data. As such, the overall cost of this revision for all entities
filing a Form LM-10 per year is $4,988 ($8.60 x 580 reporting entities
= $4,988). The Department asked for comments on this approach, and,
other than the comments addressed above, did not receive any response.
2. Summary of Costs
In sum, this revision to the Form LM-10 has an approximated 10-year
cost of $49,880 (10 years x $4,988 per year = $49,880) spread across
580 separate yearly Form LM-10 filers. OLMS does not believe that this
cost will cause a significant burden on reporting entities.
3. Benefits
The revision furthers the purpose of the LMRDA. The Act provides
that ``in the public interest, it [is] . . . the responsibility of the
Federal Government to protect employees' rights to organize, choose
their own representatives, bargain collectively, and otherwise engage
in concerted activities for their mutual aid or protection[.]'' 29
U.S.C. 401(a). Congress found that to accomplish this objective, ``it
is essential that labor organizations, employers, and their officials
adhere to the highest standards of responsibility and ethical conduct
in administering the affairs of their organizations, particularly as
they affect labor-management relations.'' Id. Congress simultaneously
found that public reporting by employers was one way to accomplish
this, given that the substance of employer persuader activities was
often ``unethical.'' S. Rep. 187 at 11, LMRDA Leg. Hist. at 407.
The Form LM-10 reporting requirement is based on Congress's
concerns over the ``large sums of money [that] are spent in organized
campaigns on behalf of some employers'' on persuader activities that
``may or may not be technically permissible'' and Congress's
determination that the appropriate response to such persuader campaigns
is to disclose them in the public interest and for the preservation of
``the rights of employees.'' See S. Rep. 187 at 10-12, LMRDA Leg. Hist.
at 406-07.
As set forth in Section I, Statutory Authority, above, LMRDA
Section 208 authorizes the Secretary to ``issue . . . regulations
prescribing the form and publication of reports required to be
filed[.]'' 29 U.S.C. 438. The statutory provision authorizing the
issuance of the Form LM-10 describes the data and information to be
reported in the Secretary's form. Employers shall file with the
Secretary a report, in a form prescribed by the Secretary, signed by
the employer's president and treasurer or corresponding principal
officers showing in detail the date and amount of each such payment,
loan, promise, agreement, or arrangement and the name, address, and
position, if any, in any firm or labor organization of the person to
whom it was made and a ``full explanation'' of the circumstances of all
such payments, including the terms of any agreement or understanding
pursuant to which they were made. 29 U.S.C. 433(a). The statutory
intent to require employers to provide a ``full explanation'' of
payments was reflected in the Form LM-10 the Secretary established.
Employers are told to provide a ``full explanation'' of the
circumstances of all such payments, including the terms of any
agreement or understanding pursuant to which they were made. 29 U.S.C.
433(a).
The Form LM-10 serves the public as well as the employees whose
rights are at issue. Both have an interest in understanding the full
scope of activities undertaken by employers to persuade employees
regarding the exercise of their rights to organize or bargain
collectively, to surveil employees, or to commit unfair labor
practices. See S. Rep. 187 at 10-11, LMRDA Leg. Hist. at 406-07. This
interest is heightened when the employees' own tax dollars may be
indirectly funding an employer's reportable activities. The federal
government also has an interest in knowing whether it is paying for
goods and services from an employer who would seek to disrupt the
harmonious labor relations that the federal government is bound to
protect. See 29 U.S.C. 401(a). OLMS has authority to protect this
interest.
Today's revision, as with the proposal, explains that one of the
``circumstances'' that must be explained is whether the payments
concerned employees performing work pursuant to a federal contract or
subcontract. If so, the filer must provide its UEI, if it has one, and
name the relevant federal contracting agency. The reporting
requirements associated with the unrevised Form LM-10 already called
for the reporting of other aspects of an employer's contact and
identifying information as part of the ``full explanation of the
circumstances'' of the reportable activity. The revision clarifies that
that ``full explanation'' continues to require filers to identify the
subject group of employees (e.g., the particular unit or division in
which those employees work).
The revision to the Form LM-10 will therefore benefit employers in
the filing of complete and accurate forms. By updating the form and
instructions to clearly and accurately describe the information
employers must disclose, the final rule will facilitate their
understanding and compliance, thereby reducing incidents of
noncompliance and associated costs incurred when noncompliant.
[[Page 49247]]
The revision will also benefit filers' employees and the public. As
discussed above, employees will more fully understand the circumstances
under which they seek to exercise their rights when they know the
contractor status and UEI of their employer, the federal agency
involved, as well as the division or unit of the employees whose rights
to organize, choose their own representatives, bargain collectively,
and otherwise engage in concerted activities the employer seeks to
influence. The revision will ensure that, as Congress envisioned,
persuader activity that is most often ``disruptive of harmonious labor
relations and fall[s] into a gray area'' will be ``exposed to public
view.'' S. Rep. 187 at 11, LMRDA Leg. Hist. at 407.
The revision thus supports harmonious labor relations consistent
with the LMRDA. One intent of the Act is to support a harmonious
relationship among employees, labor organizations, employers, and labor
relations consultants. This requires transparency and accountability
not just for labor organizations, but employers and labor relations
consultants as well. Congress intended the LMRDA to provide for the
elimination and prevention of improper practices on the part of ``labor
organizations, employers, labor relations consultants and their
officers and representatives.'' 29 U.S.C. 401(c) (emphasis added).
The proposed rule increases transparency but does not change the
criteria that determines which employers are required to file the Form
LM-10. The revision also does not impair any rights that filers had
prior to the change to Item 12, including First Amendment rights, as
addressed above in Part V.B. It does not increase required filers'
liability in connection with activities that they already had to report
and does not impose duties to file reports that filers did not already
have under the LMRDA. It adds, for certain filers only, the
straightforward step of providing basic identifying details regarding
contractor status that filers will be able to quickly enter on the Form
LM-10. Consistent with the statutory scheme enacted by Congress, the
revision outlines aspects of the ``full explanation'' that filers must
report on the Form LM-10. 29 U.S.C. 433(a).
Congress believed that employer payments and activities aimed at
employee unionization efforts should be made public even if they are
lawful.\27\ See S. No. 86-187. Rep, at 81-82, reprinted in 1 LMRDA Leg.
Hist., at 477-478. Among the concerns that prompted Congress to enact
the LMRDA was employers retaining labor relations consultants whose
actions discouraged or impeded the right of employees to organize labor
unions and to bargain collectively under the NLRA, 29 U.S.C. 151 et
seq. See, e.g., S. No. 86-187. Rep, at 6, 10-12, reprinted in 1 LMRDA
Leg. Hist., at 397, 402, 406-408. Therefore, the Department finds that
employer reporting on persuader, surveillance and unfair labor practice
activity is a fundamental part of the Act.
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\27\ Congress recognized that some of the persuader activities
occupied a ``gray area'' between proper and improper conduct and
chose to rely on disclosure rather than proscription, to ensure
harmony and stability in labor-management relations. See S. Rep. No.
86-187, at 5, 12; 1 LMRDA Leg. Hist., at 401, 408.
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The revision to Form LM-10 will increase transparency regarding
which federal contractors and subcontractors are engaging in persuader
activities. Confirming a filer's status as a federal contractor, as
well as its Unique Entity Identifier and the federal contracting agency
involved, as part of a full explanation of persuader activities will
provide a method for the public and employees to quickly identify which
federal contractors are reporting persuader activities in a given year.
Increased transparency also informs the public of when federal
monies go to federal contractors who subject their employees to
persuader, surveillance, or interference activity, and thus protects
harmonious labor relations, even if these activities are not unlawful.
See S. Rep. 187 at 10-12, LMRDA Leg. Hist. at 406. Given the potential
for disruption, the public, like employees, has an interest in knowing
whether the government is indirectly funding persuader activity by
engaging in business with these companies. The required disclosure of
such information is consistent with and fully authorized by sections
203 and 208 of the LMRDA and their broad grant of authority to
prescribe the form of the required reports. 29 U.S.C. 433 and 438.
Congress authorized the Department to collect detailed reports from
employers. 29 U.S.C. 433 and 438. The Senate Report explained that the
Department's collection and public disclosure of employer reports under
section 203 ``will accomplish the same purpose as public disclosure of
conflicts of interest and other union transactions which are required
to be reported'' under other sections of the bill that was to become
the LMRDA. S. Rep. No. 86-187, at 5, 12, reprinted in 1 LMRDA Leg.
Hist., at 401, 408.\28\ The Senate Report also explained that employers
required to file must ``file a detailed report.'' Consistent with this
congressional intent, Form LM-10 reports have required a variety of
details from employers including whether they are partnerships,
corporations, or individuals. See Form LM-10, Item 7. Similarly, the
revision now adds an additional piece of identifying information in
Item 12.b. for certain filers--whether they are federal contractors or
subcontractors and, if so, their UEI and agency involved. This revision
ensures that filers fully explain the circumstances of all covered
payments, as required by the statute.
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\28\ H.R. Rep. No. 86-741 (1959), at 12-13, 35-37, reprinted in
1 LMRDA Leg. Hist., at 770-771, 793-795, contained similar
statements. However, it should be noted that the House bill
contained a much narrower reporting requirement--reports would be
required only if the persuader activity interfered with, restrained,
or coerced employees in the exercise of their rights, i.e., if the
activity would constitute an unfair labor practice. The House bill
also contained a broad provision that would have essentially
exempted attorneys, serving as consultants, from any reporting. In
conference, the Senate version prevailed in both instances,
restoring the full disclosure provided in the Senate bill. See H.
Rep. No. 86-1147 (Conference Report), at 32-33; 1 LMRDA Legis.
Hist., at 936-937.
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Congress declined to enumerate each ``circumstance [ ]'' to be
reported, delegating authority to the Secretary to determine the
relevant details when prescribing the form and publication of the Form
LM-10. The Department finds that some employees may not be aware that
their work is pursuant to a federal contract and that the revision adds
a level of accountability envisioned by the LMRDA. It adds identifying
details regarding filers' contractor status that are part of the ``full
explanation'' Congress intended to be publicized under the Act.
Over the decades, employer efforts to defeat unions have become
more prevalent, with more employers turning to union avoidance
consultants.\29\
[[Page 49248]]
Further, members of Congress have noted recently that federal
contractors have engaged in such agreements and activities.\30\ As the
Agency responsible for promoting transparency around management
attempts to influence employees' organizing and collective bargaining
rights, OLMS closely monitors developments in the ways management
interacts with union organizing efforts. As union avoidance activity
increases, it is well within OLMS's role to increase the quality and
utility of the information being disclosed on such activity.
---------------------------------------------------------------------------
\29\ Celine McNicholas, et al., Unlawful: U.S. Employers Charged
with Violating Federal Labor Law in 41.5 percent of all Union
Elections, Economic Policy Institute, (Dec. 11, 2019) available at
https://www.epi.org/publication/unlawful-employer-opposition-to-union-election-campaigns/ (``The data show that U.S. employers are
willing to use a wide range of legal and illegal tactics to
frustrate the rights of workers to form unions and collectively
bargain . . . . [E]mployers spend roughly $340 million annually on
`union avoidance' consultants to help stave off union elections . .
. . Over the past few decades, employers' attempts to thwart
organizing have become more prevalent, with more employers turning
to the scorched-earth tactics of `union avoidance' consultants.'');
Heidi Shierholz et al., Latest Data Release on Unionization,
Economic Policy Institute, (Jan. 20, 2022) available at https://www.epi.org/publication/latest-data-release-on-unionization-is-a-wake-up-call-to-lawmakers/ (describing how ``it is now standard,
when workers seek to organize, for employers to hire union avoidance
consultants''); John Logan, The New Union Avoidance
Internationalism, 13 Work Org., Lab. & Globalisation 2 (2019)
available at https://www.scienceopen.com/hosted-document?doi=10.13169/workorgalaboglob.13.2.0057; Thomas A. Kochan
et al., U.S. Workers' Organizing Efforts and Collective Actions: A
Review Of The Current Landscape, Worker Empowerment Research
Network, (June 2022) available at https://mitsloan.mit.edu/sites/default/files/2022-06/Report%20on%20Worker%20Organizing%20Landscape%20in%20US%20by%20Kochan%20Fine%20Bronfenbrenner%20Naidu%20et%20al%20June%202022.pdf; In
Solidarity: Removing Barriers to Organizing, Hearing Before the
United States House Committee on Education and Labor, 117th Congress
(September 14, 2022), available at https://edlabor.house.gov/hearings/in-solidarity-removing-barriers-to-organizing.
\30\ Should Taxpayer Dollars Go to Companies that Violate Labor
Laws?, Comm. on the Budget, 117th Congress (May 5, 2022), available
at https://www.budget.senate.gov/hearings/should-taxpayerdollars-go-to-companies-that-violate-labor-laws (discussing the propriety of
government contracting with Federal contractors that engage in legal
and illegal tactics, including ``union busters,'' to dissuade
workers from exercising their organizing and collective bargaining
rights).
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The noted prevalence of persuader activity accordingly increases
the interest of the federal government in obtaining information about
employers' spending on reportable activities. In enacting the LMRDA,
Congress was concerned with the impact of persuader activities and
believed that increased transparency about employer efforts to persuade
employees regarding their organizing and collective bargaining rights
would benefit workers and the public. Congress found that most of this
kind of persuader activity is ``disruptive of harmonious labor
relations,'' even if lawful, and determined that workers and the public
needed disclosure of persuader activities. S. Rep. 187 at 12, LMRDA
Leg. Hist. at 406. The revision furthers this statutory purpose.
The federal government has an increased interest in fully
identifying employers who may be disrupting the harmonious labor
relations that the federal government is bound to protect when those
employers are receiving tax dollars through federal contracts. See 29
U.S.C. 401(a). In other words, greater transparency is even more
important when persuader activities are increasingly undertaken by
employers that receive federal funds through contracting relationships.
See E.O. 13494 (reiterating ``the policy of the United States to remain
impartial concerning any labor-management dispute involving Government
contractors.'').
Like the federal government itself, workers and the public also
have a strong interest in spending choices by federal contractors.
Therefore, whether a filer is a federal contractor may be relevant
information to employees as they choose how to exercise their
organizing and collective bargaining rights. The Department is not
revising the LM-10 because it expects employees to make a particular
choice regarding how they wish to exercise their organizing and
collective bargaining rights. Instead, the revision outlines further
information that employees may choose to consider when determining
whether and how to exercise their rights. It is therefore part of the
``full explanation'' that Congress envisioned employers reporting. 29
U.S.C. 433(a).
Publicizing which Form LM-10 filers are federal contractors will
give workers more information as they choose whether or not to speak
out against lawful and unlawful efforts by their employer to convince
them to remain unrepresented. Such workers and the public are entitled
to know whether public funds may indirectly lead to any sort of
disruption of labor relations and workers' rights.
Employees have a particular interest in knowing whether their
employers are federal contractors because, as taxpayers themselves,
those employees have an interest in knowing whether they may be
indirectly financing persuasion campaigns regarding their own rights to
organize and bargain collectively. Although the persuader campaigns are
not themselves reimbursable under the federal contract or
subcontract,\31\ the government is paying federal dollars for goods and
services, sometimes in large amounts, which support such contractors'
businesses. Additionally, by learning of the federal contractor status
their employer enjoys, those employees would have convenient access to
the information that would allow them to meaningfully exercise their
organizing and collective bargaining rights such as their First
Amendment right to choose whether to contact their representatives in
Congress about federal appropriations underlying the contracts with
their employers, or the employers' activities undertaken pursuant to
such contracts, or allow the employees to work more effectively with
advocacy groups or the media to disseminate their views as employees to
a wider audience. See 29 U.S.C. 157; 45 U.S.C. 152, Fourth. This is
consistent with Congress' expectations when enacting the LMRDA--that in
the public interest, and consistent with First Amendment rights to
speak out on these issues, citizens would have the benefit of public
reports regarding employer conduct that falls in a ``gray area.'' S.
Rep. No. 86-187 at 11 (1959), reprinted in 1 NLRB, LMRDA Legislative
History, at 407 (persuader activities ``should be exposed to public
view, for if the public has an interest in preserving the rights of
employees then it has a concomitant obligation to insure the free
exercise'' of those rights).
---------------------------------------------------------------------------
\31\ See E.O. 13494 (federal agencies ``shall treat as
unallowable the costs of any activities undertaken to persuade
employees . . . to exercise or not to exercise, or concerning the
manner of exercising, the right to organize and bargain collectively
through representatives of the employees' own choosing'').
---------------------------------------------------------------------------
Another benefit of the rule is increasing compliance by revising
the Form LM-10 Instructions to clarify that filers must identify the
group of employees subjected to the persuasion, surveillance or
interference reported. This clarification will also enable better NLRB
cross-matching by employees and the public. By clarifying that filers
must identify the unit of employees subjected to their persuader
activity, representation and ULP cases before the NLRB that have
similar information documented can be matched more easily by employees,
allowing them to know whether they were subjected to persuader
activities more readily. This in turn would allow them to make better-
informed decisions regarding their workplace representation.
One of Congress' stated purposes was to hold all covered employers
to ``the highest standards of responsibility and ethical conduct[.]''
29 U.S.C. 401(a). The revision does so regarding filers that are
federal contractors and is therefore consistent with Act.
The increased transparency from the revision will benefit employees
working on federal contracts who are subject to persuader activity,
information gathering, or interference, by giving them a ``full
explanation'' about their employers' reportable activities--as intended
by Congress in enacting the LMRDA. 29 U.S.C. 433(a). Generally, the
transparency created by the reporting requirements is designed to
provide workers with necessary information to make informed decisions
about the exercise of their rights to organize and bargain
collectively. For example, with the knowledge that the source of the
[[Page 49249]]
information received is an anti-union campaign managed by an outsider,
workers will be better able to assess the merits of the arguments
directed at them and make an informed choice about how to exercise
their rights.
The requirement that a filer provide its UEI, if it has one, will
prevent confusion and allow the public and employees to more easily
confirm the identity of filers who are federal contractors. It will
also ensure other, more detailed information regarding federal
contracts is easily obtainable to employees and the general public. Two
or more employers may have a similar name, which can create difficulty
for workers and the public in determining whether the employer is, in
fact, receiving federal funds. Individual employers often use multiple
names, including trade, business, assumed or fictitious names, such as
a DBA (``doing business as'') designation. Nevertheless, all federal
prime contractors have their own individual UEI to seek and secure
federal contracts which can more explicitly link an employer to a
particular federal contract.\32\
---------------------------------------------------------------------------
\32\ See Federal Acquisition Regulations System Sec. 4.605(b).
---------------------------------------------------------------------------
Requiring employers to provide this federal contract identifier on
the Form LM-10 furthers the congressional purpose of detailed employer
reporting under the LMRDA, 29 U.S.C. 401 and 433, because members of
the public and employees will be able to more easily distinguish
companies with similar names or locate reports on companies that have
changed their names. This information can also help employees and the
general public to more expeditiously search detailed government
contract data for these employers in the SAM system and USASpending.gov
websites. By using the UEI, employees and the general public can be
certain that the detailed contract information available in the SAM
System, for example, is an award granted to the specific employer who
has filed the Form LM-10.
By using existing definitions and requiring reporting of
information easily accessible to the filers, the Department has avoided
imposing any significant burden on filers. As discussed above, the Form
LM-10 uses a list of definitions adopted from the implementing
regulations of E.O. 13496 (Notification of Employee Rights Under
Federal Labor Laws) at 29 CFR 471.1. The Department expects that
federal contractors and subcontractors are already familiar with these
definitions because they are also, with minimal changes, the same
definitions that already govern Federal contractors and subcontractors
under E.O. 11246, Equal Employment Opportunity, and its implementing
regulations. See 41 CFR 60-1.3 (definitions regarding obligations of
federal contractors and subcontractors). Executive Order 11246
prohibits federal contractors and federally assisted construction
contractors and subcontractors who do over $10,000 in Government
business in one year from discriminating in employment decisions on the
basis of race, color, religion, sex, sexual orientation, gender
identity or national origin. The E.O. also requires Government
contractors to take affirmative action to ensure that equal employment
opportunity is provided in all aspects of employment. Additionally,
E.O. 11246 prohibits federal contractors and subcontractors from, under
certain circumstances, taking adverse employment actions against
applicants and employees for asking about, discussing, or sharing
information about their pay or the pay of their co-workers. Executive
Order 11246 is enforced by the Department's Office of Federal Contract
Compliance Programs (OFCCP) and covers approximately one-fifth of the
entire U.S. labor force. E.O. 11246's requirements are incorporated in
applicable government contracts or subcontracts and includes
nondiscrimination, notice posting,\33\ annual reporting,\34\ record
keeping,\35\ and, for contractors that meet certain threshold
requirements, development and maintenance of a written affirmative
action program,\36\ among other requirements. Therefore, the Department
expects that all filers who are federal contractors and subcontractors
will already know their status as such under E.O. 11246 and its
implementing regulations, see 41 CFR 60-1.3 and 60-1.5, and that most
filers are able to easily identify the information required for Item
12.b--their UEI and federal contracting agency or agencies.
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\33\ Notices to be posted, 41 CFR 60-1.43 (2022).
\34\ Reports and other Required Information, 41 CFR 60-1.7
(2022).
\35\ Record Retention, 41 CFR 60-1.12 (2022).
\36\ Affirmative Acton Programs, Sec. 60-1.40; 60-2.1 (2022).
---------------------------------------------------------------------------
In addition, federal contractors and subcontractors are required to
comply with E.O. 13496. Executive Order 13496 applies to federal
contractors and subcontractors subject to the NLRA. Pursuant to E.O.
13496, covered employers are already required to know whether they are
federal contractors or subcontractors under the definitions used in
this revision and, if they are, to post a notice and to inform
employees of their rights under the NLRA, the primary law governing
relations between unions and employers in the private sector. See 29
CFR 471. The notice, prescribed in the regulations of the Department,
informs employees of federal contractors and subcontractors of their
rights under the NLRA to organize and bargain collectively with their
employers and to engage in other protected concerted activity. The
Department expects that most filers are subject to the NLRA.\37\
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\37\ Employers covered by the Railway Labor Act (RLA) are not
covered by E.O. 13496, however, both NLRA and RLA employers are
subject to the reporting requirements of the LMRDA. Thus, RLA
employers may need more time to identify which employees who are the
subject of the LM-10 report have duties relating to the performance
of the Federal contract or subcontract. The Department expects that
only a small number of filers will be Federal contractors or
subcontractors subject to the RLA. The Department received no
comments on the issues of RLA coverage or lack of NLRA coverage. The
Department received no comments from anyone--including specifically
from RLA-covered employers or their representatives--on this
subject. See: https://www.nlrb.gov/reports/nlrb-case-activity-reports/representation-cases/election/election-statistics and
https://nmb.gov/NMB_Application/wp-content/uploads/2021/12/FY-2021-NMB-Performance-and-Accountability-Report-PAR.pdf.
---------------------------------------------------------------------------
It will therefore take filers on average five minutes to gather and
enter the information required by this revision. This cost is not
significant. The change places almost no burden at all on reporting
entities.
In contrast, it benefits employees and the public. The information
required by the revision, while minimal, is not otherwise easily
available to the public. For example, subcontractor information is
available on the GSA Electronic Subcontracting Reporting System (ESRS),
but this information is made available only to individuals with a
registered government or contractor log-in account. The LM-10 forms are
offered for public viewing on the OLMS Online Public Disclosure Room
(OPDR), which does not require a registered government or contractor
account. Including contractor identification information on the Form
LM-10, available on the OPDR, will allow employees and the public to
easily identify all filers who are paid under federal contracts,
regardless of whether they are a prime contractor or a subcontractor.
This reporting will provide a more transparent representation of when
federal dollars go to filers who may also make disbursements to labor
relations consultants designed to persuade employees regarding their
rights to organize and bargain collectively or
[[Page 49250]]
surveil employees. See Form LM-10, Items 8.b. through 8.f. This
information cannot be readily ascertained from the SBA or GSA websites.
The reporting of contractor status on the Form LM-10 is limited to
identifying information and is therefore minimally duplicative of the
more detailed reporting on the USASpending.gov website or what is
listed on the GSA and SBA contractor lists. OLMS only requires the UEI
number and the identification of the contracting agency, and no other
details of the contracts provided on other government lists. The UEI
number required by the Department is the same number reported on the
USASpending.gov website, but the final rule does not require
duplicative reporting of the detailed financial information on federal
contracts provided on that website.
The USASpending.gov website is compiled by the U.S. Department of
the Treasury under the authority of the Federal Funding Accountability
and Transparency Act of 2006 (FFATA), as amended by the Digital
Accountability and Transparency Act (DATA Act), codified at 31 U.S.C.
6101 note. Consistent with the FFATA, detailed information about
federal awards must be made publicly available on USASpending.gov. The
DATA Act expanded the FFATA for purposes that include linking ``federal
contract, loan, and grant spending information to programs of federal
agencies to enable taxpayers and policy makers to track federal
spending more effectively.'' \38\ The website is generally adapted for
the American public to show constituents how the federal government
spends money every year. Federal agencies covered by the DATA Act
report spending data to Treasury for posting on the website using
standardized data elements, and Treasury also gathers required Federal
agency spending data from financial and other government systems (such
as the Federal Procurement Data System (FPDS)). Prime contractors and
subcontractors that received federal awards directly from federal
agencies also self-report data on their awards to the FFATA Subaward
Reporting System (FSRS). The FSRS is a component of ESRS (mentioned
above) but requires different reports than ESRS. FSRS requires
reporting of executive compensation and sub-award recipient information
by prime contractors, while ESRS requires reporting of the Individual
Subcontract Report, Summary Subcontract Report, and Commercial Report,
required, in effect, under the FFATA. One purpose of the DATA Act was
to ``simplify reporting requirements for entities receiving Federal
funds by streamlining reporting requirements . . . .'' \39\ It also
provides that the method of collection and reporting data, in the
context of subawards, shall minimize the burdens on Federal recipients
and sub-recipients.\40\ Requesting contractor identification numbers is
not overly burdensome or a duplication of financial reporting, as it
does not require any additional information required by the FFATA and
DATA Act, but simply requires the reporting of an identification number
already known to a federal contractor. For example, employers filing a
Form LM-10 are not required to include information on whether contracts
are awarded to Small Businesses, Women-Owned Small Businesses, Veteran-
Owned Small Business, and related characteristics, which are to be
reported to the ESRS. Reporting contractor identification numbers on
the Form LM-10 is not unnecessarily burdensome for federal award
recipients because the employer is already aware of their
identification number from reporting under the FFATA.
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\38\ Digital Accountability and Transparency Act of 2014, Public
Law 113-101, 128 Stat. 1146.
\39\ Public Law 113-101, sec. 2(3).
\40\ 31 U.S.C. 6101 note (FFATA sec. 2(d)(2)(A)); see also 31
U.S.C. 6101 note (DATA Act sec. 5) (discussing, in general, efforts
to avoid unnecessary duplication and burdensome reporting).
---------------------------------------------------------------------------
As has been discussed above, the Department therefore believes that
its revision to the Form LM-10 will also bridge important information
gaps that have appeared in Form LM-10 reporting and is consistent with
congressional intent to publicize a ``full explanation'' of reportable
activities. 29 U.S.C. 433(a). The revision adds minimal but important
information that had not been easily accessible to the public or
employees regarding filers that engage in reportable activities,
including whether they benefit from federal contracts.
These benefits outweigh any minor duplication of contractor
identifying information in government databases, especially when, as
discussed above, some employees are not already aware that their
employers are federal contractors. By including federal contractor
identification on LM-10 Forms, the Department is linking federal
contractor status with employer reporting to the Department to enable
workers and the general public to easily evaluate federal spending
within the context of the LMRDA. As mentioned above, the GSA and SBA
websites provide lists of contractors within the context of those
agencies. The SBA directory, for example, provides a listing of those
contractors who have subcontracting plans with small businesses.
Neither GSA nor SBA publishes reportable information under the LMRDA.
Including basic identifying information about federal contractor status
on LM-10 Forms allows OLMS, employees, and the general public to have
all the relevant information in one, easily accessible reporting
database pursuant to the LMRDA.
Similarly, Federal contractor status as required by OLMS in this
revision provides less detailed information than the reporting required
by the GSA SAM.gov website and is easier for the public to access and
use. SAM.gov is generally designed for contractors who may, among other
tasks, access publicly available award data and federal assistance
listings. SAM.gov includes contract data derived from the FPDS, as well
as some additional information submitted by SAM.gov contractor account
users. With a SAM.gov user account, one can analyze federal spending by
federal organization, geographical area, business demographics, and
product or service type, among other characteristics. The Department
does not seek to duplicate this detailed contract information provided
on SAM.gov, but rather is requesting only for Form LM-10 filers to
report their UEI and federal agency involved. Additionally, SAM.gov
does not focus on LMRDA-reportable activities. In contrast to SAM.gov,
the OLMS OPDR provides Form LM-10 data to the public and does so
without the barrier of a user account.
Therefore, any duplication of information on the Form LM-10 poses a
minimal burden, if any, to the reporting entity and bridges an
important information gap by making this information more easily
accessible to the general public. OLMS, employees, and the public
should not have to research voluminous collections of contracting
information and multiple websites to glean which federal contracts are
being fulfilled by employees who are subjected to persuader,
surveillance, or unfair labor practice activity. Employees and the
general public should have the ability, by getting the UEI, to learn
the extent to which the filer engages in reportable activity while
providing its goods and services to the Federal government.
Through its enforcement of the LMRDA, the Department ensures
public, transparent reporting of certain activities that impact
protected labor rights. The Department determined that
[[Page 49251]]
filers engaging in activities that may impact protected labor rights
should disclose whether they hold government contracts. Through this
rule, the Department has chosen to require minimal information about
federal contractor status. While the request of federal contractor
status on Form LM-10 may also serve the function of the DATA Act's
interest in linking federal expenditures to federal agency programs, as
mentioned above, this is wholly distinct from the problem of
transparent reporting under the LMRDA.
The revision will allow employees access to the ``full
explanation'' and circumstances of employers' reportable activity,
including federal contractor status, in a location and context in which
it is more accessible and useful to them. While general information
about federal contracts is provided via other means, including this
information on the Form LM-10 furthers the interest of transparency as
intended by the LMRDA. Employees, union organizers, and the general
public who are reviewing LM forms are more accustomed to reviewing
documents like the Form LM-10 than extensive procurement- and employer-
centric database platforms. Further, an employee or member of the
public can more easily ascertain from the revised Form LM-10 whether
the federal contract directly impacts a specified employment group
because the federal contract identification is provided alongside
information about the employer and subject group of employees. Minor
redundancies in reportable information do not outweigh the benefits of
having all LMRDA reportable information in one, easily accessible site
on the Department's website.
The LMRDA reporting regime emphasizes access to information at the
cost of minor redundancies. By statute, the information reported on one
LM form may well appear in another LM form. Employer reporting (under
29 U.S.C. 433(a)) consists of the same information reported by labor
relations consultants (under 29 U.S.C. 433(b)). In addition, employers
report (under 29 U.S.C. 433(a)(1)) the same payments reported as
receipts by labor unions (under 29 U.S.C. 431(b)(2)). Further,
employers report (under 29 U.S.C. 433(a)(1)) the same payments reported
by labor union officers and employees (under 29 U.S.C. 432). Plainly,
therefore, the LMRDA was constructed to allow the public to more easily
find relevant information by putting identical information in different
reports targeted to different audiences.
In addition, this revision is similar to other Department
requirements that include minor redundancies and cross-references to
information provided to other governmental agencies in more depth. For
example, on Form LM-2, labor organizations are required to report
whether they have any political action committees (PAC), the full name
of each PAC, and in addition, they must list the name of any government
agency with which the PAC has a publicly available report, and the
relevant file number of the PAC.\41\ Despite being arguably redundant,
these disclosures allow for a greater degree of transparency for union
members and the public, by allowing viewers of the reports to connect
such report with other labor related disclosures. The revision follows
this same pattern when it takes three discrete pieces of information
from locations where those interested in persuader reporting are not
likely to look and brings it into the Form LM-10 where those who are
interested will easily come across it.
---------------------------------------------------------------------------
\41\ LM-2 Instructions, Item 11, Item 69.
---------------------------------------------------------------------------
This easily accessible transparency promotes informed decision
making by employees subjected to reportable persuader, surveillance,
and interference activity. The revision does not discourage lawful
persuader activities as employers and labor relations consultants may
still persuade employees in conformity with the NLRA and First
Amendment rights of the employer. The requirement that employers report
labor relations consultant activity is also unchanged.
The revision recognizes that both the public and the employees
whose rights are at issue have an interest in more fully understanding
the financial circumstances of employers who surveil employees, commit
unfair labor practices, or persuade employees regarding their rights to
organize or bargain collectively. See S. Rep. 187 at 10-11, LMRDA Leg.
Hist. at 406-07. The revision will support employees and the public as
they choose whether to engage in their own First Amendment protected
activity.
Knowledge of filers' federal contractor status will also enable
members of the public to understand which federal agencies are
contracting with employers who are engaging in persuader activity. The
public and employees will benefit from knowing whether a specific
federal agency is choosing to do business with an employer that is
attempting to influence the exercise of workers' rights to choose
whether to organize and bargain collectively. This public exposure will
allow for an open public discussion and debate about the prevalence of
persuader activity and the extent to which specific federal agencies
might be indirectly supporting such activities by doing business with
employers that engage in persuader activities.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et seq.,
requires agencies to prepare regulatory flexibility analyses, and to
develop alternatives wherever possible, in drafting regulations that
will have a significant impact on a substantial number of small
entities. The Department is certifying that this form revision will not
have a significant economic impact on a substantial number of small
entities. The Department had estimated an increased cost per reporting
entity of only $8.60 per employer. A five-year average of the number of
employer filers for the LM-10 is 580. The SBA standard average yearly
receipts for a small business total $7.5 million.\42\ Assuming all 580
entities are small entities of less than $7.5 million in revenue, the
total cost of $8.60 for all 580 entities would be $4,988 for the
resulting changes from the revision of Item 12 of the Form LM-10.
Further, using that figure of $7.5 million, the estimated increased
cost per reporting entity--a minimum of $8.60, as mentioned above--
represents only between 1.15 ten thousandth and 3.4 ten thousandth of a
percent of the $7.5 million in yearly receipts for the average small
business.\43\ Therefore, a Final Regulatory Flexibility Analysis under
the Regulatory Flexibility Act is not required. The Department did not
receive any comments on this analysis or conclusion. The Secretary has
certified this conclusion to the Chief Counsel for Advocacy of the
Small Business Administration.
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\42\ https://www.sba.gov/offices/headquarters/ogc_and_bd/resources/4562.
\43\ Form T-1 Rule, 85 FR 13438 (March 6, 2020). ``For this
analysis, based on previous standards utilized in other regulatory
analyses, the threshold for significance is 3 percent of annual
receipts.'' Id.
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C. Paperwork Reduction Act
This statement is prepared in accordance with the Paperwork
Reduction Act of 1995 (PRA), 44 U.S.C. 3501.
A. Summary and Overview of the Final Form Revision
The following is a summary of the need for and objectives of the
form revision. A more complete discussion of various aspects of the
revisions are found in the preamble.
[[Page 49252]]
The Department adds a checkbox to the Form LM-10 report requiring
certain reporting entities to indicate whether they are federal
contractors or subcontractors. If so, the report will direct the filer
to indicate the federal contracting agency and the contractor's Unique
Entity Identifier (UEI), if the contractor has one. The Department will
also clarify in the Form LM-10's instructions that a filer must
identify the subject group of employees (e.g., the particular unit or
division in which those employees work). This information has always
been encompassed by Item 12 and the revised instructions now explicitly
require it for Item 12.a.
The LMRDA was enacted to protect the rights and interests of
employees, labor organizations and the public generally as they relate
to the activities of labor organizations, employers, labor relations
consultants, and labor organization officers, employees, and
representatives. Specifically, employers are required to file to
disclose the following in Form LM-10 filings, pursuant to LMRDA section
203 and subject to certain exemptions: payments and loans made to any
union or union official; payments to any of their employees for the
purpose of causing them to persuade other employees with respect to
their bargaining and representation rights, unless the other employees
are told about these payments before or at the same time they are made;
payments for the purpose of interfering with employees in the exercise
of their bargaining and representation rights, or obtaining information
on employee or union activities in connection with labor disputes
involving their company, except information obtained solely for use in
a judicial, administrative or arbitral proceeding; and arrangements
(and payments made under these arrangements) with a labor relations
consultant or other person for the purpose of persuading employees with
respect to their bargaining and representation rights, or obtaining
information on employee or union activities in connection with labor
disputes involving their company, except information obtained solely
for use in a judicial, administrative, or arbitral proceeding.
The Department, pursuant to the LMRDA, is filling in present
information gaps occurring in Form LM-10 reporting regarding filers'
federal contractor status. As has been stated above, the Department is
acting pursuant to an interest in more fully understanding the full
scope of activities undertaken by filers that engage in reportable
activities, including whether they benefit from federal contracts.
B. Methodology of the Burden Estimate
For purposes of the PRA, the cost burden of the revision to the
Form LM-10 has been calculated above and is as follows. Based upon the
existing LM form estimates, the revision to Item 12 will take no longer
than 5 minutes to complete on average for approximately 580 filers in
any given year, thus adding approximately 5 minutes of reporting burden
to the existing Form LM-10 (which the current existing instructions
estimate to take approximately 35 minutes to complete, including the
unrevised Item 12). The Form LM-10 is not an annually mandatory form
for employers; rather, it is only necessary in fiscal years during
which the employer engages in identified transactions or agreements.
Further, the revision to Item 12 does not affect all Form LM-10 filers,
just those that answer ``Yes'' to Items 8.b.-8.f. (see footnote 2,
above)--and only a subset of those filers (federal contractors and
subcontractors) would need to complete all of Item 12.b. In addition,
only one Form LM-10 report at most must be filed per fiscal year. Thus,
the rule does not affect the total number of Form LM-10 reports that
the Department expects to receive, nor does it affect the recordkeeping
burden, as the Department estimates that most employers that file and
are federal contractors or subcontractors must already retain records
relevant to that status pursuant to E.O. 13496 (Notification of
Employee Rights Under Federal Labor Law). See 29 CFR part 471, in
particular subsection 471.2(d), which states that employers must post
the notice where employees covered by the NLRA engage in activities
relating to the performance of the contract. Instead, the rule will
result only in an increase in reporting burden of 5 minutes per Form
LM-10 and an overall increase of 2,900 burden minutes, or 48.3 burden
hours, for Form LM-10 filers. The Department received just one comment
on this analysis, which agreed with the overall assumptions and
conclusions. Specifically, it rejected an estimate higher than five
minutes per form, even suggesting that two additional minutes per form
would suffice. However, the Department will retain the five-minute
estimate, as it is more consistent with past estimates for similar
tasks in this and other LM forms.
The final revision will have no impact on the other 11 information
collections approved under ICR #1245-0003. The summary of the burden
below accounts for the burden for all ICs (reports) in ICR 1245-0003.
C. Conclusion
As this final form revision requires a revision to an existing
information collection, the Department is submitting, contemporaneous
with the publication of this document, an ICR to amend the burden
estimates under OMB Control Number 1245-0003 and revise the PRA
clearance to address the clearance term. A copy of this ICR, with
applicable supporting documentation, including among other items a
description of the likely respondents, proposed frequency of response,
and estimated total burden may be obtained free of charge from the
RegInfo.gov website at: https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=1245-0003 (this link will be updated
following publication of this rule) or from the Department by
contacting OLMS at 202-693-0123 (this is not a toll-free number)/email:
[email protected].
Agency: Department of Labor, Office of Labor-Management Standards.
Type of Review: Revision of a currently approved collection.
OMB Number: 1245-0003.
Title of Collection: Labor Organization and Auxiliary Reports.
Forms: LM-1--Labor Organization Information Report, LM-2, LM-3, LM-
4--Labor Organization Annual Report, LM-10, Employer Report, LM-15--
Trusteeship Report, LM-15A--Report on Selection of Delegates and
Officers, LM-16--Terminal Trusteeship Report, LM-20--Agreement and
Activities Report, LM-21--Receipts and Disbursements Report, LM-30--
Labor Organization Officer and Employee Report, S-1--Surety Company
Annual Report.
Affected Public: Private Sector--Business or other for-profits and
not-for-profit institutions.
Estimated Number of Annual Respondents: 33,021.
Estimated Number of Responses: 35,067.
Frequency of Response: Varies.
Estimated Total Annual Burden Hours: 4,644,785.
Estimated Total Annual Other Burden Cost: $0.
D. Unfunded Mandates Reform
This final revision will not include any federal mandate that may
result in increased expenditures by State, local, and tribal
governments, in the aggregate, of $100 million or more, or in increased
expenditures by the private sector of $100 million or more.
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E. Small Business Regulatory Enforcement Act of 1996
This final revision is not a major rule as defined by section 804
of the Small Business Regulatory Enforcement Fairness Act of 1996. This
revision will not result in an annual effect on the economy of
$100,000,000 or more; a major increase in costs or prices; or
significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
companies to compete with foreign-based companies in domestic and
export markets.
List of Subjects in 29 CFR Part 405
Employers, Reporting and recordkeeping requirements
Signed in Washington, DC.
Jeffrey R. Freund,
Director, OLMS.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix A--Form LM-10
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[FR Doc. 2023-15510 Filed 7-27-23; 8:45 am]
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