Donovan v. MASTER PRINTERS ASS'N, ETC.

• Decision Date: 10 December 1981
• Docket Number: No. 80 C 1768.,80 C 1768.
• Citation: 532 F. Supp. 1140
• Parties: Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. MASTER PRINTERS ASSOCIATION, A DIVISION OF PRINTING INDUSTRY OF ILLINOIS ASSOCIATION, Defendant.
• Court: U.S. District Court — Northern District of Illinois

532 F. Supp. 1140

Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. MASTER PRINTERS ASSOCIATION, A DIVISION OF PRINTING INDUSTRY OF ILLINOIS ASSOCIATION, Defendant.

No. 80 C 1768.

United States District Court, N. D. Illinois, E. D.

December 10, 1981.

Michael S. O'Connell, Asst. U. S. Atty., Chicago, Ill., for plaintiff.

Jerry Kronenberg, Lisa S. Kohn, Borovsky, Ehrlich & Kronenberg, Chicago, Ill., for defendant.

MEMORANDUM OPINION

MARSHALL, District Judge.

This case involves a challenge to the Secretary of Labor's ("Secretary") interpretation of § 203 of the Labor Management Reporting and Disclosure Act ("LMRDA" or "Act"), 29 U.S.C. § 433 (1959). The Secretary seeks to compel defendant, Master Printers Association ("Association") to disclose the names and various aspects of its relationship with clients who receive labor relations advice from the Association. The Association contests the Secretary's interpretation of the Act and alternatively raises several constitutional objections to the disclosure requirements. Both sides have moved for summary judgment pursuant to Rule 56, Fed.R.Civ.Pro. and exhaustive briefs have been filed. The records and files of the case present no genuine issues of material fact and the case is ready for decision.

I

The facts are not in dispute. The Association is an unincorporated trade organization comprised of approximately 800 nonunion printing shops. The purpose of the Association is, in part, to counsel and advise its members on how to keep their employees unorganized. To this end the Association provides a variety of services for its members, including literature, meetings and counseling on how to maintain "open" shops, and establishing credit unions and other benefit programs for the unorganized employees. Affidavit of Robert Lindgren, Exhibit D.

In 1976 the former executive director of the Association made three separate speeches directly to employees of three of its member employers. The Secretary, pursuant to Title II of the LMRDA, Section 203, 29 U.S.C. § 433(b), determined that these speeches constituted "persuader activity" within the meaning of the Act and therefore ordered reports and disclosure of the relationship between the Association and those employers. In addition the Secretary ordered the Association to report the names and disbursement records of all other employers who had received labor relations advice regardless of whether they received persuader services. The Association filed the required reports for the three employers, but refused to comply with respect to its other member-employers. The Secretary instituted this action to compel disclosure. The questions presented here are whether the LMRDA supports the broad disclosure interpretation urged by the Secretary and, if it does, whether the reporting sections of the Act can withstand constitutional scrutiny.

II

The LMRDA grew out of the lengthy and well publicized McClellan Committee investigations into organized labor in the late 1950's.¹ The legislation which ultimately passed after several years of debate and many attempts dealt primarily with insuring internal union democracy and public disclosure of union financial arrangements.² In addition, the LMRDA and its precursors, the Kennedy-Ives Bill, S. 3974, 85th Cong., 2d Sess. (1958), the Kennedy-Ervin Bill, S. 505, 86th Cong., 2d Sess. (1959), and finally S. 1555, 86th Cong., 1st Sess. (1959) authored by Senator John F. Kennedy, focused on the influence of "middlemen" employed by management to influence employees in the exercise of their rights under § 7 of the National Labor Relations Act (NLRA), 29 U.S.C. § 157 (1976). The Senate Report accompanying the Act explained:

It is also plain that there are important sections of management that refused to recognize that the employees have a right to form and join unions without interference and to enjoy freely the right to bargain collectively with their employer concerning their wages, working conditions, and other conditions of employment. ... Employers have employed so-called middlemen to organize "no-union committees" and engage in other activities to prevent union organization among their employees. They have financed community campaigns to defeat union organization. They have employed investigators and informers to report on the organizing activities of employees and unions. It is essential that any legislation which purports to drive corruption and improper activities out of labor-management relations contain provisions dealing effectively with these problems. S.Rep. 187, 86th Cong., 1st Sess. at 10 reprinted in 1959 U.S.Code & Admin.News 2318, 2322-23 (1959).³

It is clear that Congress did not look favorably on the activity of outside consultants and believed they frequently engaged in practices of questionable legality.

The committee notes that in almost every instance of corruption in the labor-management field there have been direct or indirect management involvements sic. The report of the McClellan committee describes management middlemen flitting about the country on behalf of employers to defeat attempts at labor organization....

The committee believes that employers should be required to report their arrangements with these union-busting middlemen. Further, the Committee on Labor and Public Welfare has received evidence in prior hearings showing that large sums of money are spent in organized campaigns on behalf of some employers for the purpose of interfering with the right of employees to join or not to join a labor organization of their choice, a right guaranteed by the National Labor Relations Act. Sometimes these expenditures are hidden behind committees or fronts; however the expenditures are made, they are usually surreptitious because of the unethical content of the message itself. The committee believes that this type of activity by or on behalf of employers is reprehensible. These expenditures may or may not be technically permissible under the National Labor Relations Act ..., or they may fall in a gray area. In any event, where they are engaged in they 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 them.

S.Rep., supra at 2326-37.

In response to the problems outlined above the LMRDA provides criminal sanctions for improper payments by middlemen to employees⁴ and requires disclosure of the employer-middlemen relationship. Section 203 of the Act, 29 U.S.C. § 433 (1976), provides in relevant part:

(b) Every person who pursuant to any agreement or arrangement with an employer undertakes activities where an object thereof is, directly or indirectly —

(1) 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

(2) to supply an employer with information concerning the activities of employees or a labor organization in connection with a labor dispute involving such employer, except information for use solely in conjunction with an administrative or arbitral proceeding or a criminal or civil judicial proceeding;

shall file within thirty days after entering into such agreement or arrangement a report with the Secretary, signed by its president and treasurer or corresponding principal officers, containing the name under which such person is engaged in doing business and the address of its principal office, and a detailed statement of the terms and conditions of such agreement or arrangement. Every such person shall file annually, with respect to each fiscal year during which payments were made as a result of such an agreement or arrangement, a report with the Secretary, signed by its president and treasurer or corresponding principal officers, containing a statement (A) of its receipts of any kind from employers on account of labor relations advice or services, designating the sources thereof, and (B) of its disbursements of any kind in connection with such services and the purpose thereof. In each such case such information shall be set forth in such categories as the Secretary may prescribe.

(c) Nothing in this section shall be construed to require any employer or other person to file a report covering the services of such person by reason of his giving or agreeing to give advice to such employer or representing or agreeing to represent such employer before any court, administrative agency, or tribunal of arbitration or engaging or agreeing to engage in collective bargaining on behalf of such employer with respect to wages, hours, or other terms or conditions of employment or the negotiation of an agreement or any arising thereunder.

It should be apparent from reading the Act that the language of paragraphs (b) and (c) requires reconciliation. What the Act requires in terms of reporting obligations in paragraph (b) it appears to exempt in paragraph (c). As one commentator noted,

There seems to be some confusion, however, concerning whether a consultant who has an agreement with any one employer to persuade employees or to furnish information must then include in his annual report receipts from, and disbursements on behalf of, all other employers for whom he has performed labor-relations services that would otherwise not have to be reported. Read literally, section 203(b) seems to compel that conclusion; but the opposite conclusion is indicated by section 203(c), which specifically states that consultants need not report the mere giving of advice to employers, or the representation of employers in an arbitration, administrative, or judicial proceeding. This is another example of the ambiguities produced by the inartistic draftsmanship which characterizes much of the statute.

Aaron, The Labor Management Reporting and Disclosure Act of 1959, 73 Harv.L.Rev. 851,...