WASHINGTON – A federal judge on Thursday upheld a new Labor Department regulation requiring unions to disclose more details about their finances but she delayed the effective date to July 1.
The AFL-CIO (search) sued in November, asking the judge to invalidate the rule, which was to take effect Jan. 1. The AFL-CIO contended Labor Secretary Elaine Chao did not have the authority to issue the rule or to require unions to report detailed transactions.
U.S. District Judge Gladys Kessler ruled that the secretary did have the rulemaking authority and that the rule was "reasonable, adequately explained and not arbitrary or capricious."
Kessler also ruled that unions did not have enough time to prepare for the new reporting requirements, such as developing new accounting systems, purchasing new computer systems and software, and training staff.
Kessler blocked the department from imposing the new regulation until July 1, or until 90 days after it makes available a "fully tested version" of the electronic reporting software (search) it has promised unions, whichever is later.
That followed the judge's decision Dec. 31 to grant a preliminary delay for a year.
"This decision is a major victory for rank-and-file union members and affirms that the new union transparency reforms (search) are inherently reasonable," Chao said in a written statement.
The rule requires national, regional and local unions with an income of more than $250,000 to provide much more financial detail in the annual reports they are required to file with the Labor Department.
Unions will have to detail transactions of more than $5,000 for politics, gifts, administration, member representation activities and benefits. For the first time, larger unions also will be required to detailed the finances of related trusts.
Labor leaders claim the requirements are overly burdensome and will give companies the upper hand in unionizing efforts by the disclosure of their finances.
The department says current reporting requirements do not clearly tell rank-and-file union members how their dues are spent.