Jeff Gappa

November 26, 2002

Economics of Labor Management

Landrum-Griffin Act: Union Corruption

Do you know of someone who is corrupt? Most likely, you do. Corruption is loss of purity or integrity, depravity, wickedness, impurity, or bribery and is an issue that is evident throughout the whole world to this day and can have a damaging reputation on people, especially employers. Whether it is the people or actions that are taken, we recognize that this issue will probably present as long as life is in existence.

When discussing union corruption, we must discuss the Landrum-Griffin Act. U.S. Congress passed the Landrum-Griffin Act in 1959. The Landrum-Griffin Act is also known as Labor-Management Reporting and Disclosure Act (LMRDA), resulting from hearings of the Senate committee on improper activities in the field of labor and management (Landrum-Griffin Act, October 27, 2002)). This act is administered by the National Labor Relations Board (NLRB). The Landrum-Griffin Act is also an amendment to the Taft-Hartley Labor Act of 1947. The Landrum-Griffin Act guarantees union democracy (Fossum pg. 398).

This act was put into effect because of corrupt practices in labor-management relations (Fossum 2002, pg. 72). There had been improper activities in the fields of labor and management, which uncovered evidence of collusion between dishonest employers and union officials (Landowska). In addition to these improper activities, Michael Nelson states that the embezzlement (which is a fraudulent appropriation of property by a person to whom it has been intrusted) of union member dues is a federal crime, and in addition to the embezzlement, the Landrum-Griffin Act should give union members certain rights to act as a check on the power of union bosses, which includes right to sue for breaches of fiduciary duty and the right to some financial information.

The Landrum-Griffin Act put this corruption to an end. It also granted certain rights to union members and protected their interests by promoting democratic procedures within labor organizations (Labor-Management Reporting and Disclosure Act, October 27, 2002).

The Landrum-Griffin Act in essence established a Bill of Rights for union members, and they are as follows:

Title I

· Union members have equal rights to nominate candidates for union office, vote in elections, and participate in meetings.

· Unions may impose assessments and raise dues only by democratic procedures.

· Unions must inform their members about provisions of the LMRDA.

· Members may use Title I rights through a private suit against the union.

· Union and nonunion employees have the right to receive or to inspect

· Collective bargaining agreements. This right may be enforced by a union member or by the Secretary of Labor.

· Another law, the Labor Management Relations Act (LMRA), which is also the Taft-Hartley Act, is amended by the LMRDA concerning strikes, boycotts, and picketing.

Can be found at www.rbpubs.com/ls/ls19.htm

A prime example of union corruption took place in New York City. In 1995, federal investigators discovered that around $8 million had vanished from the pension fund of Teamsters Local 875 (Horowitz 2002, pg. 2). This is money that was looked forward to when these employees were to retire. For years, union officials neglected to pay their pension contributions (Horowitz 2002, pg. 2). This local has had a history of corruption, with embezzlement being the main conviction (Horowitz 2002, pg. 2). My question is once you become corrupt, is there any chance of getting rid of it? I think this could be the problem. Once you start, you cannot stop. The funny thing is that corruption can be seen in both your good and your bad companies. Some are just better than others at hiding it.

According to Michael Nelson (2002), there are eight ways to deter and punish the union embezzlements. I will mention four of them.

First, Nelson believes that the Landrum-Griffin should be amended to require annual audits and quarterly reports from unions similar to those required bye the Securities and Exchange Commission (SEC). This may be a start to helping prevent this from happening. Next, the act should cover all unions. There are certain unions that are exempt that should be included for the main fact that they can still escape the Landrum-Griffin Act.

Also, Nelson states that congress should impose term limit on union bosses. With a longer term, bosses have more time to figure out their scheme to cause problems like embezzlement. I may not know much, but I think this would be a very good idea. Instead of finding out about the corruption after the boss is to quit or retire, catch it before this happens.

Finally, he says that the maximum prison sentence that a judge can impose on union embezzlers is only 5 years. He believes that the sentence should be raised to 10 years. In all honesty, embezzlers are getting off easy. They are destroying what can be the employers and employees savings.

Now the big question is how do we solve this corruption or can it even be solved? I believe that the people that do this are good at what they do, but obviously, they need to be stopped. The problem is how. Maybe an anti-corruption policy might help. Without this, con artists, racketeers, and goons will keep reappearing and committing the same act of crime as before. Also, congress should refuse to set aside funds for union advocacy (Horowitz 2002, pg. 56).

References

Fossum John A, Christopher Faille. Labor Relations Eight Edition. Boston: McGraw-Hill Irwin, 2002.

O’Conner David E. Basic Economic Principles. Westport: Greenwood Press, 2000.

Horowitz, Carl F. Union Corruption: Why It Happens, How To Combat It. Retrieved September 11, 2002 from the National Institute for Labor Relations Research at the Website: http://www.nilrr.org/corruption.htm

Nelson, Michael. Law Review Article Offers Reforms to Combat Union Corruption. Retrieved October 27, 2002 from the Website: http://www.nlpc.org/ew/06-2olap.htm

Labor-Management Reporting and Disclosure Act (n.d.) Retrieved October 27, 2002 from http://www.rbpubs.com/ls/ls19.htm

Landrum-Griffin Act (n.d.) Retrieved October 27, 2002 from http://www.infoplease.com/ce6/bus/A0828769.html

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