A United States Judge issued an injunction this month blocking enforcement of a Department of Labor’s (DOL) final rule on financial reporting by labor unions. The court found unions would suffer “irreparable harm if forced to start complying with new reporting requirements by Jan. 1.” Upset by the scope of DOL’s new requirements,The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) filed action for judicial review of the final rule under the Administrative Procedure Act late last year. The rule, announced in the Federal Register on Oct. 9, 2003, expands the financial reporting requirements of all labor unions with annual receipts of $250,000 or more. Judge Gladys Kessler agreed with the AFL-CIO that the new reporting requirements were burdensome and unions did not have enough time to make the extensive and sophisticated accounting changes necessary for compliance. This could cost as much as $1 billion and would affect more than 5,000 mostly local unions -- which are already subjected to far stricter reporting requirements than corporations -- requiring vast amounts of time and money to be reallocated from contract negotiations, grievance handling, organizing and other core union activities. In a letter to the administration just before the rule was finalized, 22 House Republicans expressed their dismay at the plan. “These unions will have less than two months to purchase new computers, revamp their existing systems, train personnel and perform related compliance tasks before January in order to track their finances under the new rule,” they wrote. The final rule requires each labor union with annual receipts of $250,000 or more to file Form LM-2 electronically and to itemize receipts and disbursements by categories (such as lobbying or contract negotiation) of $5,000 or more. Receipts or disbursements to a single entity that will eventually add up to $5,000 or more by the end of the year must also be reported. The revised LM-2 will also require unions to report investments and to report the number of members by category. Lastly, the Form LM-2 will ask for a breakdown on each officer and employee's time and percentage of salary spent on each functional category. In addition to the newly revised Form LM-2, labor unions will also be required to file Form T-1 for any trust in which the labor organization is interested, if the trust has $250,000 or more in receipts and the labor organization contributed $10,000 or more to the trust during the year. John Sweeney, president of the AFL-CIO, said the true motivation was political: “While unions support reasonable financial disclosure requirements for all types of organizations, the Bush administration’s rules are craftily designed to weaken unions -- the strongest advocates for American workers -- as our nation prepares for the 2004 elections. The rules target unions and go far beyond what is required of corporations or other not-for-profit organizations.” While Judge Kessler did order a year injunction from the rule, she has not yet ruled on whether the new rule will stand.