US Attorneys > USAM > Title 9 > Criminal Resource Manual 2413
prev | next | Criminal Resource Manual

2413

Outline of 29 U.S.C. 186 (Taft-Hartley Act Sec. 302)

  1. Introduction

    Section 186(a) proscribes bribery, graft, and conflict-of-interest payments of money and other prohibited things of value to representatives of employees, labor union officials, and labor organizations by employers, and persons acting in the interest of employers, whose labor-management relations are governed by the Labor Management Relations Act (29 U.S.C. Sec. 141, et seq.).[FN1] The request or acceptance by any person of payments described in the statue is also prohibited. 29 U.S.C. Sec. 186(b)(1).[FN2] Federal courts have authority to enjoin violations of the statute in actions by private parties or the United States. 29 U.S.C. Sec. 186(e).[FN3]

      FN1. Undocumented aliens who are employed within the United States are subject to the LMRA provided that their occupations are not otherwise excluded from coverage. Sure Tan, Inc. v. NLRB, 467 U.S. 883, 891-94 (1984). The statute does not apply to payments affecting the labor-management relations of agricultural employees, domestic laborers, governmental workers, or employees in the railway and airline industry. See 29 U.S.C. Sec. 152(2) and (3). Unlawful payments by railway and airline carriers to labor representatives of their employees are punished by the Railway Labor Act (45 U.S.C. Sec. 152).

      FN2. The specific prohibition of the solicitation or acceptance of things of value by labor unions or their agents from motor vehicle operators in connection with the unloading of cargo is not considered here. See 29 U.S.C. Sec. 186(b)(2).

      FN3. There is no record of the United States having sought civil injunctive relief against prohibited payments since the statute's enactment in 1947. Civil litigation under the statute has been pursued by private litigants and parties to collective bargaining.

    The maximum criminal penalty is imprisonment for five (5) years and a fine for each violation occurring after October 12, 1984, in which the amount of money or thing of value involved in the prohibited transaction exceeds $1,000. For prohibited transactions of $1,000 and below the maximum penalty is imprisonment for one (1) year and a fine. See 29 U.S.C. Sec. 186(d), as amended (1984). Violations of the statute which occurred before October 12, 1984, are subject to the misdemeanor penalty without regard to the amount of value involved in the transaction. Felony or misdemeanor violations may be prosecuted as racketeering acts under the Racketeer Influenced and Corrupt Organizations (RICO) statute (18 U.S.C. Sec. 1961, et seq.).

  2. Elements of Proof

    1. Prohibited Payments to Representatives of Employees or Labor Unions or Labor Union Officials with Potential Representative Relationships with Employees; 29 U.S.C. Sec. 186(a)(1) or (a)(2), (b)(1), and (d)(1) or (d)(2).

      In order to establish a violation of the statute pertaining to prohibited payments to representatives of employees or labor union officials, the government must prove the following elements:

      1. PAYOR: the source of the prohibited payment was a statutory employer,[FN4] including an agent of an employer; an association of employers; a person who acted as a labor relations expert, advisor, or consultant to an employer; or a person who acted in the interest of an employer.

          FN4. 29 U.S.C. Sec. 152(2) excludes employers which are governments, governmental corporations, and railroads, and airlines whose employees are subject to the Railway Labor Act (45 U.S.C. 152).

      2. TRANSACTION: the payor paid, lent, delivered, or agreed to pay, lend or deliver, any money or other thing of value (other than 9 types of financial transactions excepted in the statute) to a recipient;

        OR ALTERNATIVELY,

        ANY PERSON requested, demanded, received, accepted, or agreed to receive or accept, a payment, loan, or delivery of money or other thing of value (other than 9 types of financial transactions excepted in the statute) to a recipient.

      3. RECIPIENT: the actual or intended recipient was an

        1. a representative (individual or organization) of any of the employees of the employer described in element #1 [29 U.S.C. Sec. 186(a)(1)] or

        2. an officer or employee of a labor organization[FN5] which represented, sought to represent, or would have admitted to membership any of the employees of the employer described in element #1 [29 U.S.C. Sec. 186(a)(2)] or

            FN5. 29 U.S.C. Sec. 152(5).

        3. a labor organization which represented, sought to represent, or would have admitted to membership any of the employees of the employer described in element #1 [29 U.S.C. Sec. 186(a)(2)].

      4. JURISDICTION: the employer's employees[FN6] were employed in an industry affecting interstate or foreign commerce;[FN7]

          FN6. 29 U.S.C. Sec. 152(3) excludes workers employed as agricultural laborers, supervisors, independent contractors and in domestic service.

          FN7. 29 U.S.C. 152(6) and (7).

      5. SCIENTER: a participant (or aider and abettor) of the transaction who is charged as a criminal defendant acted willfully with knowledge of the transaction without proof of any corrupt purpose or specific intent to violate the law [29 U.S.C. Sec. 186(d)(2)][FN8]

          FN8. See United States v. Phillips, 19 F.3d 1565 (11th Cir. 1994), cert. denied sub. nom. USX Corp. v. United States, 115 S.Ct. 1312 (1995), and cases cited in that decision.

          NB: unless the transaction involved the following special circumstances described at 29 U.S.C. Sec. 186(d)(1) which require that the participant have acted

        1. willfully with knowledge of the transaction, and

        2. with intent "to benefit himself or to benefit other persons he knows are not permitted to receive a payment, loan, money, or other thing of value under subsections (186)(c)(4) through (c)(9)" where the transactions involve

          1. the improper withholding and payment by employers of employees' membership dues or equivalent fees to a labor organization contrary to 29 U.S.C. Sec. 186(c)(4) below;

          2. the improper payment by employers of contributions to employee pension or welfare (health) benefit plan trusts on behalf of employees contrary to 29 U.S.C. Sec. 186(c)(5)-(8) below; or

          3. the improper funding of labor-management cooperation committees contrary to 29 U.S.C. Sec. 186(c)(9) below.

            In the special transactions described in 29 U.S.C. Sec. 186(d)(1) occurring after October 12, 1984, in which employer remittance of membership dues, employee benefit contributions, and labor-management cooperation funding is prohibited because the parties have failed to comply with structural or procedural requirements of the statute, criminal prosecution requires a higher standard of scienter than a "willful" violation and knowledge of the operative facts of the transaction. In such prosecutions, a corrupt purpose underlying the transaction must be demonstrated.[FN9]

              FN9. See United States v. Papia, 910 F.2d 1357 (7th Cir. 1990), where an employer's payment of bogus dues to the union on behalf of some employees who never knew they were union members (in order to evade paying union-scale wages and benefits for all employees in the bargaining unit) was upheld as a basis for conviction under the higher scienter requirements for dues payments. Compare United States v. Gruttadauro, 818 F.2d 1323 (7th Cir. 1987), where in a similar pre-1984 bogus dues case, but without the post-1984 higher scienter, a employer paid monies to the union for bogus membership cards which could be displayed to other unions' organizers in an effort to avoid any union organization.

            Requiring the higher scienter for criminal prosecution of such transactions is a safeguard that inadvertent violations of the statute involving deficient dues checkoffs, payments to improperly structured benefit trusts, and the like will not be subject to criminal prosecution. Absent proof of the higher scienter in these special transactions, the prohibited payments remain subject to the civil injunctive provisions of the statute at 29 U.S.C. Sec. 186(e).

    2. Bribery Payments to Individual Union Officials With or Without Representative Relationships with Employees;

      29 U.S.C. Sec. 186(a)(4), (b)(1), and (d)(2).

      In order to establish a violation of statute pertaining to the bribery of labor union officials, the government must prove the following elements:

      1. PAYOR: see element #1 above;

      2. TRANSACTION: see element #2 above;

      3. INDIVIDUAL RECIPIENT: the actual or intended recipient was an officer or employee of a labor organization;

      4. JURISDICTION: the recipient's labor organization was engaged in an industry affecting interstate or foreign commerce;[FN10]

          FN10. United States v. Burge, 990 F.2d 244 (6th Cir. 1992), upholds the bribery conviction of a union official who accepted sham consulting fees in return for influence with a labor organization which would not admit the paying employer's employees to membership. This case holds that a union official can be bribed in violation of 29 U.S.C. 186(a)(4) as "an officer or employee" of his union without being bribed as a "representative of employees."

      5. SCIENTER: a participant (or aider and abettor) of the transaction who is charged as a criminal defendant acted

        1. willfully with knowledge of the transaction

          [29 U.S.C. Sec. 186(d)(2)], and

        2. with intent to influence[FN11] the individual recipient in respect to any of his/her actions, decisions, or duties either as a representative of employees OR as an officer or employee of his/her labor organization[FN12] [29 U.S.C. Sec. 186(a)(4)];

            FN11. Although bribery payments in violation of 29 U.S.C. Sec. 186(a)(4) and (b)(1) carry no additional statutory penalty than gratuities and conflict-of-interest payments prohibited by the statute, the Federal sentencing guidelines impose a base offense value for bribery which is four levels above other prohibited payments. U.S.S.G. 2E5.1. Moreover, conviction of the bribery portions of the statute invoke the employment disability at

            FN12. See United States v. Bloch, 696 F.2d 1213 (9th Cir. 1983), which upheld the bribery conviction of a labor union official who accepted payments from band promoters in order to certify under the immigration laws that foreign musicians should be allowed entry for the purpose of performing within the United States despite the promoters' failure to comply with union rules requiring one-for-one hiring of local musicians. The Mexican musicians could not be admitted to membership in the labor organization.

          29 U.S.C. Sec. 504 which disqualifies individuals convicted of "bribery" and felonies involving abuse of union office for illegal gain at the expense of union members.

          OR ALTERNATIVELY,

          b. with knowledge[FN13] that the payor intended to influence the individual recipient in respect to any of his/her actions, decisions, or duties either as a representative of employees OR as an officer or employee of his/her labor organization

          [29 U.S.C. Sec. 186(b)(1)].

            FN13. See United States v. Bloch, 696 F.2d 1213, 1216 (9th Cir. 1982), where the court stated that a "'willful' violation of 29 U.S.C. §186 [(b)(1) and (a)(4)] requires only that the defendant [recipient] act with knowledge that the payments are from a person acting in the interest of an employer and are intended to influence the defendant's duties as a union employee." Id. at 1216; material in brackets and emphasis added. Compare United States v. Ferrara, 458 F.2d 868, 873, n.5 (2d Cir. 1972), where a conviction predicated on a union official's "intent to be influenced" was sustained. But see United States v. Boylan, 620 F.2d 359, 362 (2d Cir. 1980), where the court held that Section 186 does not require that the taker of prohibited payments have an "intent to be influenced."

    3. Bribery of Employees and Anti-Union Committees of Employees

      29 U.S.C. 186(a)(3), (b)(1), and (d)(2)

      1. PAYOR: see element #1 above.

      2. TRANSACTION: the payor paid, lent, delivered, or agreed to pay, lend or deliver, money or other thing of value in excess of an employee's normal compensation to the recipient;

        OR ALTERNATIVELY,

        ANY PERSON requested, demanded, received, accepted, or agreed to receive or accept, a payment, loan, or delivery of money or other thing of value in excess of an employee's normal compensation to the recipient.

      3. RECIPIENT: the actual or intended recipient was an employee or group or committee of employees of the employer on whose behalf payment is made (other than payments to employees who act openly for the employer in matters of labor relations or personnel administration described in 29 U.S.C. Sec. 186(c)(1));

      4. JURISDICTION: the employee(s) of the employer were employed in an industry affecting interstate or foreign commerce;

      5. SCIENTER: a participant (or aider and abettor) of the transaction who is charged as a criminal defendant acted

        1. willfully with knowledge of the transaction

          [29 U.S.C. Sec. 186(d)(2)], and

        2. for the purpose of causing the employee or group or committee of employees directly or indirectly to influence other employees in the exercise of the right to organize and bargain collectively with employers [29 U.S.C. Sec. 186(a)(3)];

        OR ALTERNATIVELY,

        b. with knowledge that the payor intended to cause the recipient to directly or indirectly to influence other employees in the exercise of the right to organize and bargain collectively with employers. 29 U.S.C. Sec. 186(b)(1) and (d)(2).

    4. Excepted Transactions and Defenses

      29 U.S.C. 186(c).

    The statute excepts participants in 9 categories of transactions from liability under 29 U.S.C. Sec. 186(a) and (b). Therefore, in any criminal prosecution, the government has the burden of rebutting, by proof beyond a reasonable doubt, any evidence of the following excepted transactions:

    1. Payment or receipt of compensation for, or by reason of, service as an employee of the employer on whose behalf the payment is made pursuant to 29 U.S.C. Sec. 186(c)(1);[FN14]

        FN14. See United States v. Burge, 990 F.2d 244 (6th Cir. 1992) (receipt of sham consulting fees which were not bona fide compensation for services rendered to the paying employer).

    2. Payments in satisfaction of court judgments, arbitration awards, and in settlement of litigation in the absence of fraud or duress described in 29 U.S.C. Sec. 186(c)(2);

    3. Delivery of things of value with respect to the sale or purchase of an article or commodity at the prevailing market price in the regular course of business described in 29 U.S.C. Sec. 186(c)(3);[FN15]

        FN15. United States v. Carlock, 806 F.2d 535 (5th Cir. 1986) (rental payments for non-operative equipment).

    4. Employer payment of union membership dues or equivalent fees which have been deducted from each employee's wages pursuant to a written authorization called a "checkoff" at 29 U.S.C. Sec. 186(c)(4);[FN16]

        FN16. United States v. Papia, supra (bogus dues payments to avoid payment of union scale wages and benefits).

    5. Employer transmittal of contributions on behalf of employees, including employees' contributions on their own behalf, to an employee pension or welfare benefit trust established in accordance with the provisions of 29 U.S.C. Sec. 186(c)(5) - (c)(8). Such trusts must be jointly administered by equal (voting) numbers of representatives of employees and employers. The detailed basis for contributions to the trust must be specified in writing.

      Benefits may be used for employees, their families and dependents, but only for purposes specified in the statute such as retirement, health benefits, etc. Pension and welfare benefit plans which are established both by employers and organizations representing employees are also regulated by the Employee Retirement Income Security Act (ERISA). 29 U.S.C. Sec. 1002(1) and (2) and 1003(3).

    6. Employer contributions to labor-management cooperation committees established for purposes allowed by the Labor-Management Cooperation Act. 29 U.S.C. Sec. 186(c)(9) and 29 U.S.C. Sec. 175a.

[cited in USAM 9-132.010]