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December 10, 1981


The opinion of the court was delivered by: 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.


The facts are not in dispute. The Association is an unincorporated trade organization comprised of approximately 800 non-union 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.


The LMRDA grew out of the lengthy and well publicized McClellan Committee investigations into organized labor in the late 1950's.*fn1 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.*fn2 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).*fn3

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

  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 employees*fn4 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

Aaron, The Labor Management Reporting and Disclosure Act of 1959, 73 Harv.L.Rev. 851, 891 (1960). It is precisely this ambiguity that we are called upon to resolve in the case at bar.

The Secretary reads § 203(b) to require the reporting of receipts and disbursements for all clients who received any labor relations advice if a labor consultant engages in any persuader activity.*fn5 Thus, the Secretary treats the rendering of persuader services as a trigger which compels full disclosure of information otherwise non-reportable under § 203(c). The sole function of paragraph (c) is to exempt from the filing requirements labor consultants who engage in no persuader services and limit their activity to the giving of advice and the representative functions listed in the Act. A consulting firm must confine itself solely to non-persuader activity unless it wants to incur a duty to make financial disclosure as to all its clients, even those who receive only advice outside the scope of direct or indirect employee persuasion. Plaintiff's Memorandum in Support at 6-8.

The defendant offers several counter interpretations of the Act, urging that it can be best reconciled by restricting the reporting requirement to all labor relations services — including advice — to any employer who receives persuader services, but not to employers who receive only non-persuader services. Defendant's Memorandum in Support at 20-22.*fn6 Defendant argues that this interpretation is preferable because the Secretary's reading of the statute renders section (c) a mere repetition of what is already apparent from section (b). Id. at 23. Defendant further argues that this interpretation is consistent with the Congressional purpose of focusing the "floodlights of publicity" on those who provide persuader services. Only where there is persuader activity — contact between the consultant and employees — did Congress exhibit a concern sufficient to require the report of receipts and disbursements.

Both parties argue that the considerable legislative history accompanying the Act supports their view; and both sides agree that judicial interpretation to date generally supports the Secretary's interpretation of the Act. See 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); Wirtz v. Fowler, 372 F.2d 315 (5th Cir. 1966) overruled, Price v. Wirtz, 412 F.2d 647 (5th Cir. 1969) (en banc). For the reasons stated below, we find that the Secretary offers the proper construction of the Act and as construed the reporting sections do not violate defendant's constitutional rights.

The Fourth Circuit in Douglas, the first case to address the subject reporting requirement of the LMRDA, held, in a 2-1 opinion, that ยง 203 requires the reporting of all advice given by a labor relations consultant who engaged in even a single instance of persuader activity. The Fifth Circuit initially took the ...

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