Union Report: New Federal Regulation Could Extend Financial Disclosure Rule to All State-Level NEA Affiliates
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A new regulation called the "intermediate bodies" rule may require numerous state affiliates of the National Education Association (NEA) to disclose their finances in detail. Currently, this reporting requirement applies only to private-sector unions, but if the rule is implemented, it would extend to midlevel public-sector unions as well. On August 9, the U.S. Department of Labor sent this rule to the White House Office of Information and Regulatory Affairs for final review.
According to the Landrum-Griffin Act of 1959, labor unions need to disclose and provide a detailed account of nearly every financial transaction they engage in on an annual basis. Public-sector unions are generally exempt from these requirements, unless they have at least one private-sector member. In such cases, the oversight of the act becomes applicable.
Most state affiliates of the American Federation of Teachers (AFT) already file a disclosure report known as an LM-2. NEA differs from AFT in that the majority of its state affiliates solely consist of public-sector members. For instance, both the California Teachers Association and the New Jersey Education Association do not have any private-sector members and have never submitted an LM-2 report.
However, the Pennsylvania State Education Association (PSEA) is an exception. It represents private-sector nurses and health professionals, making it necessary for them to file an LM-2 report. Since these PSEA members are also NEA members, NEA is obligated to file an LM-2 report as well.
According to the proposed new regulation, all NEA state affiliates would need to submit a disclosure report because they would be classified as "intermediate bodies" of a national union that falls under the jurisdiction of the Landrum-Griffin Act.
During President George W. Bush’s administration, the Labor Department attempted to implement this rule in 2003. However, NEA took legal action and the rule was tied up in litigation for several years until the courts ruled in favor of the department in 2009. Nevertheless, when President Barack Obama assumed office, his Labor Department rescinded the rule.
Anticipating an unfavorable ruling, it is likely that NEA will resort to legal action once again. The Massachusetts Teachers Association, which currently does not need to file an LM-2 report, has already set aside funds in their budget to prepare one for the 2019-20 fiscal year.
If the regulation is enacted, all expenditures made by NEA state affiliates will become publicly accessible information. However, it is important not to get too hopeful, as the regulatory process tends to be lengthy and bureaucratic. It is quite possible that a new president will be in office before the regulation takes effect.
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