Republican Legislators Ask Department of Labor to Rule that “Worker Centers” are Labor Organizations

Previant Law Firm

On July 25, 2013, Republican Congressmen John Kline (MN) and Phil Roe (TN) asked the Department of Labor to rule on whether worker centers are labor organizations for the purposes of the Labor Management Reporting and Disclosure Act. “Worker centers” is a term used broadly to refer to organizations that offer a variety of services, including worker training, employment services, lobbying and advocacy, as well as providing information about workers rights and sometimes legal services, to individuals and members who are often low-wage workers. Worker centers are usually non-profit.

In their letter to the DOL Secretary, Kline and Roe advocate for the “labor organization” designation because worker centers “have also taken direct action to alter conditions of employment and organize employees.” Kline and Roe take issue with the organization Korean Immigrant Worker Advocates (KIWA), which undertook a 4-year campaign that included a boycott of restaurants and an attempt to organize an independent union, which ultimately culminated with increased worker wages. Specifically, Kline and Roe identified worker centers such as the Organization United for Respect at Walmart, the Retail Action Project, the Coalition of Immokalee Workers, the Restaurant Opportunities Center and Fast Food Forward.

If worker centers are determined to be labor organizations, they will become subject to the many reporting and disclosure requirements of the LMRDA. Additionally, the tax-deductible status of donations to these organizations may be jeopardized. Contributions and donations to labor organizations under 501(c)(5) of the IRS code (“labor organizations”) are not tax deductible for the donor; only donations to 501(c)(3) organizations—traditional non-profit organizations, are usually tax deductible. (For example, donations to the Retail Action Project are tax-deductible, while those to OUR Walmart, which has an organizing focus, are not.)

Kline and Roe made the determination request in response to forthcoming DOL “Persuader” rules which are expected to increase employer reporting requirements under the LMRDA, and Kline alleges, harm employer free speech on the basis that “Workers have a right to hear from their employers on important issues surrounding union representation. Yet the Obama administration is engaged in a campaign to silence employers on union matters.” Essentially, he is concerned that employers will be unable to intimidate employees related to collective activity.