Over the last 6 years, the Labor Department took several important steps to improve the financial disclosure rules that apply to labor unions. The newest round of improvements was finalized in January and was set to be implemented early this year. However, one of the first acts of the new administration was to delay the effective date of the latest enhanced disclosure requirements and now the Labor Department has proposed repealing these revisions altogether.

Yesterday, the Chamber filed comments opposing the Department’s planned rollback of union financial disclosure rules. The Labor Department’s principal stated reason for rolling back the new rules is that it believes that more experience is necessary under the old rules and that the new requirements may be too burdensome. However, as noted in the Chamber’s comments the Department of Labor is already on the record stating that:

In developing the proposals, the Department has had the opportunity to review thousands of [union financial disclosure] forms and to tap the experience gained by its staff in investigating Form LM-2 issues and from their dialogue with union officials and union members while providing Form LM-2 compliance assistance to them. … Through this experience it became evident to the Department’s staff that the Form LM-2 incompletely reflected the compensation paid to union officials. Notably missing from the reports was a true reflection of the amounts of compensation being paid to or on behalf of individual officers.

This is just one example of how the evidence (including the opinions and experience of its own career staff) before the Department runs counter to its new position.

The Chamber’s comments are also critical of the Department’s assertion that the Department is withdrawing the revisions because it would be too burdensome:

If the Department now believes that its burden hour estimate for the … procedure is understated it should develop a more accurate estimate based on the public record that it received, instead of rescinding the reasonable … procedure that was published in the 2009 final rule. To simply rescind this portion of the 2009 final rule without putting some other process in place is statutorily irresponsible regardless of what the burden estimate is. … If indeed legitimate concerns with the burden of the 2009 final rule exist, it is incumbent upon the Department to consider alternatives and, at a minimum, explain why such alternatives were not pursued.

The Chamber’s comments conclude:

The Department’s proposal to withdraw the 2009 final rule is arbitrary and capricious and is simply bad policy. The 2009 final rule, if enacted, will significantly help improve union transparency consistent with [union financial disclosure laws]. The Department’s new lack of confidence in the regulatory process approving the 2009 final rule is inconsistent with the facts that demonstrate the Department carefully scrutinized and justified each element of the proposal when it was promulgated. For these reasons we urge the Department to retain the 2009 final rule.

The Labor Department may no longer believe that sunlight is the best disinfectant when it comes to union financial disclosure laws, but at least we can shine a little light on them as they pull the drapes shut.