Donovan v. Rose Law Firm

• Decision Date: 22 July 1985
• Docket Number: No. 84-1863,84-1863
• Citation: 768 F.2d 964
• Parties: 119 L.R.R.M. (BNA) 3345, 54 USLW 2088, 103 Lab.Cas. P 11,513 Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Appellee, v. The ROSE LAW FIRM, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 964

768 F.2d 964

119 L.R.R.M. (BNA) 3345, 54 USLW 2088,

103 Lab.Cas. P 11,513

Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Appellee, v. The ROSE LAW FIRM, Appellant.

No. 84-1863.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 14, 1985.

Decided July 22, 1985.

Jim Hunter Birch, Little Rock, Ark., for appellant.

Romino Salazar, Dept. of Labor, Washington, D.C., for appellee.

Before BRIGHT, Senior Circuit Judge, and ARNOLD and BOWMAN, Circuit Judges.

BOWMAN, Circuit Judge.

This case has its origins in an organizing drive by the United Brotherhood of Carpenters and Joiners of America at the Monark Boat Company plant in Monticello, Arkansas. During the drive, Monark hired an attorney from the Rose Law Firm to conduct discussions with Monark employees. The Department of Labor subsequently contacted the Rose Law Firm and asked the firm to file certain labor consultant reporting forms as required by section 203(b) of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) (codified at 29 U.S.C. Sec. 433(b)). ¹ LMRDA Sec. 203(c) (codified at 29 U.S.C. Sec. 433(c)) qualifies the required disclosure. ²

The basic controversy between the parties in the present case concerns the extent of the disclosure mandated by Sec. 203 of the LMRDA. The Department of Labor insists that once any person, pursuant to any agreement or arrangement with an employer, engages in persuader activity, Sec. 203 obligates that person to file within thirty days after entering into the agreement or arrangement a report detailing the terms and conditions thereof, and also to file an annual report of its receipts from and disbursements on behalf of every employer for whom that person performed any service or gave any advice on account of labor relations. The Rose Law Firm agrees with the Department insofar as acknowledging that the disclosure requirement of Sec. 203 is triggered by engaging in persuader activity, and does not dispute the Department's assessment of the thirty-day report. The firm argues, however, that the annual disclosure mandated by Sec. 203 need include only receipts and disbursements relating to services performed for and advice given to those employers for whom persuader activity is performed.

Pursuant to its view of the annual disclosure required by Sec. 203, the Rose Law Firm disclosed to the Department only its receipts and disbursements relating to labor services it provided to Monark, the sole employer for whom the firm had engaged in persuader activity. This disclosure was rejected by the Department as incomplete. When the firm refused to disclose its receipts and disbursements on account of clients for whom it had not performed any persuader activity, the Department sued the firm in the United States District Court for the Eastern District of Arkansas to compel what it regards as complete disclosure under Sec. 203. The District Court granted the relief sought by the Department.

The Rose Law Firm contends that the District Court erred in granting the relief sought by the Department, and argues, as it did in the District Court, that its interpretation of the disclosure required by Sec. 203 is correct for three reasons. First, the firm contends that the intent of Congress in enacting the LMRDA was to require the disclosure of receipts and disbursements only with regard to labor relations services provided to employers for whom persuader activity is performed. Second, it asserts that the Department's interpretation of the disclosure provisions impermissibly requires the disclosure of privileged attorney-client information. Finally, it asserts that the Department's interpretation of the disclosure provisions unduly infringes on the First and Fourth Amendment rights of the firm and of its clients. Because we agree that Sec. 203 of the LMRDA does not require the annual report submitted thereunder to include receipts and disbursements on account of labor relations services and advice rendered to employers for whom the person reporting has not performed persuader activities, we reverse the judgment of the District Court. In view of this result, we need not reach the other issues raised by the Rose Law Firm. ³

I.

The issue before this Court is one of first impression in this Circuit. At present, decisions in four other Circuits support the position here advocated by the Department. See Humphreys, Hutcheson and Moseley v. Donovan, 755 F.2d 1211 (6th Cir.1985); Master Printers Association v. Donovan, 699 F.2d 370 (7th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 703, 79 L.Ed.2d 168 (1984); Price v. Wirtz, 412 F.2d 647 (5th Cir.1969) (en banc); Douglas v. Wirtz, 353 F.2d 30 (4th Cir.1965), cert. denied, 383 U.S. 909, 86 S.Ct. 893, 15 L.Ed.2d 665 (1966). We shall discuss each of these decisions, but before doing so we offer a brief overview of the legislative history of the statutory language here in issue, with the thought that it will make what follows more readily understandable.

Much of the language of the consultant reporting provisions found in Secs. 203(b) and (c) of the LMRDA appeared originally as Sec. 103(b) of the Kennedy-Ives bill, S. 3974, 85th Cong., 2d Sess. (1958), which bill passed the Senate, but failed to pass the House. See Beaird, Reporting Requirements for Employers and Labor Relations Consultants in the Labor-Management Reporting and Disclosure Act of 1959, 53 Geo.L.J. 267, 272-73 (1965). The language reappeared in altered form as Secs. 103(b) and (c) of the Kennedy-Ervin bill, S. 505, 86th Cong., 1st Sess. (1959), and remained Secs. 103(b) and (c) when, following amendment in the Senate Committee on Labor and Public Welfare, the Kennedy-Ervin bill reemerged as S. 1555, which bill was eventually passed by the Senate. Later, after the House had passed its own labor bill (H.R. 8342, 86th Cong., 1st Sess. (1959)), which differed substantially from S. 1555 in its consultant reporting requirements (H.R. 8342 Secs. 203(b) and (c)), the Conference Committee of the House and Senate voted to substitute the text of Secs. 103(b) and (c) of S. 1555 for the text of Secs. 203(b) and (c) of the House bills. That language taken from S. 1555 thus became Secs. 203(b) and (c) of the LMRDA. See Aaron, The Labor-Management Reporting and Disclosure Act of 1959, 73 Harv.L.Rev. 851, 853-56 (1960).

Section 203(b) creates a broad duty of disclosure on the part of persons engaging in persuader activity. Taken alone and read literally, it fully supports the Department's position in this case. Section 203(c), however, appears sharply to limit the duty created by Sec. 203(b), but the limiting extent of Sec. 203(c) is not clearly determinable from a reading of the statute. Our task is to reconcile these two apparently conflicting provisions in a way that will be faithful to the intent of Congress, as best we can ascertain that intent.

A.

In Douglas v. Wirtz, the Fourth Circuit had little difficulty reconciling the apparent conflict between Secs. 203(b) and (c). Citing to S.Rep. No. 187, 86th Cong., 1st Sess. 12, reprinted in 1959 U.S.Code Cong. & Ad.News 2318, the court held that "Sec. (b) encompassed not only an annual report of receipts from persuasion activities but all receipts 'on account of labor relations advice.' " 353 F.2d at 32 (quoting S. 3974 Sec. 103(b); S. 1555 Sec. 103(b)). The court found support for this result in S.Rep. No. 1684, 85th Cong., 2d Sess. 8-9 (1958). S.Rep. No. 1684 relates to the Kennedy-Ives bill (a predecessor to the LMRDA) and states that the language that ultimately became Sec. 203(c) of the LMRDA was intended to serve as a proviso to the part of the bill that became Sec. 203(b) so as to guard against misconstruction. See 353 F.2d at 33. The court found further support for its conclusion in the fact that both S.Rep. No. 1684 to the Kennedy-Ives bill and S.Rep. No. 187 to S. 1555 indicate that subsection (c) contains a specific exemption stating that an attorney or consultant who confines himself to giving advice, taking part in collective bargaining, and appearing in court or administrative proceedings would not be among those required to file reports under subsection (b). Id. District Judge Lewis, sitting by designation, dissented without opinion.

B.

In Price v. Wirtz, the Fifth Circuit en banc drew heavily on the Fourth Circuit's opinion in Douglas in upholding the Department of Labor's interpretation of Sec. 203, relying primarily on the view of the Fourth Circuit that the purpose of Sec. 203(c) was merely to make the implicit explicit: that " '[a]n attorney or consultant who confines himself to giving legal advice ... would not be included among those required to file reports under [subsection (b) ].' " 412 F.2d at 651 (quoting Wirtz v. Fowler, 372 F.2d 315, 327 (5th Cir.1966)).

Judge Dyer, who was joined by four other judges, authored a dissent from the holding of the majority in Price v. Wirtz. See 412 F.2d at 651-56. The dissent disagreed with the majority's reading of the legislative history. While it did not take issue with the probative value of the specific excerpts from the legislative history relied on by the majority, the dissent did believe that reliance on such excerpts was not persuasive, especially when the legislative history as a whole tended to show that the primary thrust and purpose of the LMRDA was to publicize persuader activity. The dissent saw little justification for the Department's wish to have the LMRDA interpreted to require the reporting by persuaders of non-persuader activity. The dissent also perceived serious constitutional difficulties with the majority's interpretation of Sec. 203, and would have construed the disclosure requirements of that section more narrowly so as to avoid the constitutional issues raised by a broad interpretation.

C.

In Master Printers Association v. Donovan, a panel of the Seventh Circuit by a two-to-one vote also upheld the Department's interpretation of Sec....