Petition — Master Printers Ass'n v. Donovan

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Office -Supreme Court, U.S.

FiLeED

No. A-56

— Sipg6 1983

IN THE ALEXANDER L. STEVAS,

CLERK

Supreme Court of the United States

OCTOBER TERM, 1983

MASTER PRINTERS ASSOCIATION, A Division of

Printing Industry of Illinois,

Petitioner,

RAYMOND J. DONOVAN,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

FRANCIS T. COLEMAN, JR.*

| ELIZABETH L. LEWIS

| BooTHE, PRICHARD & DUDLEY

1000 Potomac Street, N.W.

(202) 333-9532

CYNTHIA WICKER

STEPHEN A. BOKAT

NATIONAL CHAMBER LITIGATION

CENTER, INC.

1615 H Street, N.W.

Washington, D.C. 20062

| (202) 463-5337

Attorneys for Master Printers

Association

* Counsel of Record

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON. D.C. 20001

QUESTION PRESENTED

1. Whether it is a violation of the constitutional rights

of trade association members to require an association

that is subsequently held to have engaged in persuader

activities within the meaning of Section 203(b) of the

Labor Management Reporting and Disclosure Act, 29

U.S.C. § 433(b) (1982), to disclose the identity and the

amount of dues and other financial contributions of all

members, even though said persuader activities were con-

fined to only a small number of association members and

even though said persuader activities were rendered un-

beknownst to all but the members involved in such

activities.

(i)

TABLE OF CONTENTS

Se a

RES

CONSTITUTIONAL AND STATUTORY PROVI-

aes

THE DISCLOSURE OBLIGATION IMPOSED

BY THE DECISION OF THE COURT BELOW

RUNS AFOUL OF A LONG LINE OF DECI-

SIONS OF THE SUPREME COURT AND THE

CIRCUIT COURTS OF APPEAL ..........................

A. The Decision Of The Court Below Is Inconsist-

ent With A Long Line Of Decisions Of This

Court Which Prohibit Governmental Infringe-

ment Of The Right To Associate In Privacy

Except When Certain Strict Conditions Are

B. The Decision Of The Court Below Cannot Be

Reconciled With The Well Reasoned Decision

Of The United States Court Of Appeals For

The Fifth Circuit, Carefully Circumscribing

Governmental Infringement Of The Right To

See ec cccereenccuees

C. The Court Below Ignored This Court’s Instruc-

tions To Allow Flexibility In The Kind And

Amount Of Proof Required To Demonstrate

First Amendment Violations .......000000000.....

D. The Decision Of The Court Below Is Inconsist-

ent With Decisions Of This Court Which Con-

strain The Governmental Infringement Of

TABLE OF AUTHORITIES

CASES: Page

Barenblatt v. United States, 360 U.S. 109 (1959). 11

Brown v. Socialist Workers’ 74 Campaign Com-

mittee, 108 S, Ct. 416 (1982) oon... cccccccceeeee 7,9,12

Buckley v. Valeo, 424 U.S. 1 (1976) ......00..0....... 7,8, 12, 14

Communist Party v. Subversive Activities Control

Bene, S07 OB. 2. (06) 8

Dreher v. Siclaff, 636 F.2d 1141 (7th Cir. 1980). 13

Familias Unidas v. Briscoe, 619 F.2d 391 (5th

FE: , Ree ES IE A tp PM ETS 10, 11, 12

Gibson v, Florida Legislative Investigation Com-

wuntes, S72 TS. Be (I0GR) a 4502

Griswold v. Connecticut, 381 U.S. 479 (1965) ....... 7

Intern’l Union, Etc. v. Nat’l Right to Work, 590

F.2d 1189 (D.C. Cir. 1979) ............. ie ee aL 7

Konigsberg v. State Bar of California, 366 U.S.

TOR RD anno can seine ces Peek oe &

Master Printers Ass'n v. Donovan, 699 F.2d 370

(7th Cir. 1983) . EDU tecd EO) Bon 2 ae

Master Printers Association v. " Donovan, “532

Py. Sapp. 3140 (0D, Th 0 3 1

Master Printers of America v. Donovan, 108 LRRM

2050 (E.D. Va. 1981), appeal docketed No. 82-

R000: (50 Cle, Dek. SE: TON 6

NAACP v. Alabama, 357 U.S. 449 (1958)... 7,8

NAACP v., Button, 424 U.S. 415 (1963)... 14

Primus, In Re, 436 U.S. 412 (1978) ...........000000.000.... 8,14

Sweezy v. New Hampshire, 354 U.S. 234 (1957).. 7

Thomas v. Collins, 323 U.S. 516 (1945)... 13

Uphaus v. Wyman, 360 U.S. 72 (1959) 8

CONSTITUTIONAL PROVISIONS:

United States Constitution

Soe SR, GI Bin or as passim

Chas SUNN RIS We ee eee 2

STATUTES AND RULES:

United States Code

Se Gene B ROEED oc ee 2

SP UB. SI) on eee 12

TABLE OF AUTHORITIES—Continued

Page

RA aia nececasnnet ceneheintiobiaden 9

(ad a |) RR ae emer eenmnier cca sna passim

as I a sias cases cstceeserchncntacrsacecsicionmnan aaa ae

I I 2 dacs eoiaemannbbieaiin 13

MISCELLANEOUS:

1 Encyclopedia of Associations §§ 1, 16 (17th ed.

(APRA REEAS LARe RG Sean RRR Re ed earn 6

1959 United States Code, Cong. and Administrative

Oe a cad dhasaesiensdeioesinnen 9

IN THE

Supreme Court of the United States

OCTOBER TERM, 1983

No. A-56

MASTER PRINTERS ASSOCIATION, A Division of

Printing Industry of Illinois,

Petitioner,

Vv.

RAYMOND J. DONOVAN,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

OPINIONS BELOW

The short decision of the United States Court of Ap-

peals for the Seventh Circuit, adopting the decision of

the United States District Court for the Northern Dis-

trict of Illinois, is reported at 699 F.2d 370. The order

of the United States Court of Appeals for the Seventh

Circuit denying rehearing en banc is unreported. The

decision of the United States District Court for the

Northern District of Illinois is reported at 532 F.Supp.

1140. The district and circuit court decisions are re-

printed in the Appendix to this Petition.

JURISDICTION

The United States Court of Appeals for the Seventh

Circuit entered judgment in this case on January 31,

1983. Petitioner filed a Petition for Rehearing and Sug-

gestion of Rehearing en banc, which was denied on May

12, 1983. On July 28, 1982, Petitioner requested enlarge-

ment of the time to petition this Court for writ of cer-

tiorari to September 26, 1983. The Court granted per-

mission by order dated July 29, 1983.

Jurisdiction to hear this case is conferred upon this

Court by 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS

The First Amendment to the Constitution of the

United States provides:

Congress shall make no law respecting an establish-

ment of religion, or prohibiting the free exercise

thereof; or abridging the freedom of speech, or of the

press; or the right of the people peaceably to assem-

ble, and to petition the Government for a redress of

grievances.

The Fifth Amendment provides, in pertinent part:

No person shall... be deprived of life, liberty, or

property, without due process of law... .

Section 203 of the Labor Management Reporting and

Disclosure Act, 29 U.S.C. § 433 (1982) provides, in per-

tinent part:

(b) Every person who pursuant to any agreement or

arrangement with an employer undertakes ac-

tivities where an object thereof is, directly or in-

directly—

(1) to persuade employees to exercise, or per-

suade employees as to the manner of exer-

cising, the right to organize and bargain col-

lectively through representatives of their

own choosing; or

(2) to supply an employer with information con-

cerning the activities of employees or a la-

bor organization in connection with a labor

dispute involving such employer, except in-

formation for use solely in conjunction with

an administrative or arbitral proceeding or

a criminal or civil judicial proceeding;

shall file within thirty days after entering into

such agreement or arrangement a report with

the Secretary, signed by its president and treas-

urer or corresponding principal officers, contain-

ing the name under which such person is engaged

in doing business and the address of its princi-

pal office, and a detailed statement of the terms

and conditions of such agreement or arrange-

ment. Every such person shal] file annually, with

respect to each fiscal year during which pay-

ments were made as a result of such an agree-

ment or arrangement, a report with the Secre-

tary, signed by its president and treasurer or a

statement (A) of its receipts of any kind from

employers on account of labor relations advice or

services, designating the sources thereof, and

(B) of its disbursements of any kind, in connec-

tion with such services and the puropses thereof.

In each such case such information shall be set

forth in such categories as the Secretary may

prescribe.

(ec) Nothing in this section shall be construed to re-

quire any employer or other person to file a re-

port covering the services of such person by rea-

son of his giving or agreeing to give advice to

such employer or representing or agreeing to

represent such employer before any court, ad-

ministrative agency, or tribunal of arbitration

or engaging or agreeing to engage in collective

bargaining on behalf of such employer with re-

spect to wages, hours, or other terms or condi-

tions of employment or the negotiation of an

agreement or any question arising thereunder.

STATEMENT OF THE CASE

The Master Printers Association (““MPA” or “Associa-

tion”) represents approximately 800 employers and exists

in part to promote open (non-union) printing shops.

(App. at 12a.) Toward this end, the Association pro-

vides its members with lawful counsel, advice, and serv-

ice designed to promote progressive labor relations. (App.

at 46a.) In 1976, Robert Lindgren, former Executive

Director of the Association, delivered speeches to the em-

ployees of three member employers. (App. at 47a.)

The Secretary of Labor, acting pursuant to Title II

of the Labor Management Reporting and Disclosure Act

(‘“LMRDA” or the “Act’’), determined that these three

speeches constituted instances of “persuader’” activity

under Section 203(b) of the LMRDA, 29 U.S.C. § 483 (b) ;

he directed that receipts from, and details of all labor

relations advice by the Association were reportable to the

Secretary pursuant to the requirements of Section 203(b)

of the Act. The Secretary and Association subsequently

agreed that only details of the “persuader” activity were

reportable. The Association filed reports concerning only

these three speeches, as required by the Secretary, pur-

suant to a settlement agreement dated June 9, 1978.

(App. at 12a, 47a-48a. )

Subsequent to this submission, however, the Secretary

demanded additional reports. He contended, and asserts

in this case, that Section 203(b) of the Act requires an

association who has engaged in activities pursuant to a

“persuader agreement” to disclose not only receipts and

disbursements with respect to employer/members who

have entered into persuader agreements, but also re-

ceipts and disbursements with respect to any employer/

member, for whom any non-persuader labor relations ad-

vice or services have been rendered. Using this inter-

pretation, the Secretary has sought to compel the As-

sociation to disclose its entire membership list, and all

monies received and disbursed in connection with the

Association’s non-persuader labor relations advice and

services on behalf of all of its members. (App. at 44a.)

The Association refused to file the additional report

demanded by the Secretary, on the grounds that his in-

terpretation was contrary to the legislative history, statu-

tory scheme and clear meaning of the Act, and would

violate the constitutional rights of the Association and

its members to freedom of speech, freedom of associa-

tion, freedom from unreasonable searches and seizures,

and due process. The Association also relied on the settle-

ment agreement of June 9, 1978 in refusing to file the

additional materials sought by the Secretary. (App. at

47a-48a. |

On April 10, 1980, the Secretary of Labor filed an

action in the United States District Court for the North-

ern District of Illinois seeking to compel the Association

to file the additional reports. (App. at 42a.) The parties

filed cross-motions for summary judgment on February 3,

1981, with memoranda and affidavits in support thereof.

(App. at lla.)

On December 10, 1981, the United States District

Court, Judge Prentice Marshail presiding, granted the

Secretary’s motion for summary judgment and denied

MPA’s motion, holding that the Association was required

to file the complete reports requested by the Secretary.

(App. at 39a.) The Court rejected MPA’s contrary in-

terpretation of the Act’s requirements and overruled its

constitutional objections. Judge Marshall stayed his own

order pending appeal on January 27, 1982. The Judge

noted that this was a case of firsi impression in the

Seventh Circuit and that MPA had raised “several im-

portant statutory and constitutional questions.”

MPA appealed the district court’s decision, and on Jan-

uary 31, 1983, a panel of the Seventh Circuit, over the

strong dissent of Judge Pell, affirmed, adopting the de-

cision of the district court.

REASONS FOR GRANTING THE WRIT

THE DISCLOSURE OBLIGATION IMPOSED BY THE

DECISION OF THE COURT BELOW RUNS AFOUL

OF A LONG LINE OF DECISIONS OF THE SU-

PREME COURT AND THE CIRCUIT COURTS OF

APPEAL.

The Seventh Circuit ruled in this case that when MPA

engaged in “persuader” activity on behalf of three of its

members, it incurred the obligation to disclose to the

Secretary of Labor the identities of all its eight hundred

members, as well as the amount of each member’s finan-

cial support to the Association. The panel majority re-

jected the Association’s protestations that such a result

was neither mandated by the Act nor permitted by the

Constitution.

MPA urges this Court to grant review to correct the

erroneous conclusion of the court below. That decision

has onerous implications that extend far beyond the facts

of this case.' There are more than 3,300 employer as-

sociations in this country, whose memberships span from

very few to over two-hundred thousand.* One of the rea-

sons employers become members of associations is to pur-

sue commonly shared goals and purposes in anonymity,

a constitutionally guaranteed right.

The massive disclosure of what was heretofore con-

sidered confidential information which the decision would

trigger is irrelevant to the Congressional purpose which

prompted enactment of the LMRDA, and would severely

“chill” employers in exercising their right to free associa-

tion. Moreover, the lower court decision is irreconcilable

with prior decisions of this Court, and a decision of the

1The Secretary is seeking the same disclosures in litigation

pending in the Fourth Circuit. Master Printers of America v.

Donovan, 108 LRRM 2050 (E.D. Va. 1981), appeal docketed No.

82-1990 (4th Cir. Oct. 25, 1982).

21 Encyclopedia of Associations §§ 1, 16 (17th ed. 1983).

United States Court of Appeals for the Fifth Circuit

which raised the identical issue.

A. The Decision Of The Court Below Is Inconsistent

With A Long Line Of Decisions Of This Court Which

Prohibit Governmental Infringement Of The Right

To Associate In Privacy Except When Certain Strict

Conditions Are Met.

This Court, long ago affirmed that “[o]ur form of

government is built on the premise that every citizen

shall have the right to engage in political expression and

association. This right was enshrined in the First

Amendment of the Bill of Rights.” Sweezy v. New

Hampshire, 354 U.S. 234, 250-51 (1957).° Fundamental

to free association is the protection of mutual legal and

economic interests. Griswold v. Connecticut, 381 U.S. 479

(1965).

It is equally well-established that the mere fact of com-

pelled disclosure can violate the right to associate and

pursue common goals in privacy. Buckley v. Valeo, 424

U.S. 1, 64 (1976) ; Gibson v. Florida Legislative Investi-

gation Committee, 372 U.S. 539 (1963); NAACP v. Ala-

bama, 357 U.S. 449 (1958). The vitality of this principle

was reinforced this past term in Brown v. Socialist Work-

ers’ 74 Campaign Committee, 103 S. Ct. 416, 420 (1982),

when this Court stated, “‘[i]nviolability of privacy in

group association may in many circumstances be indis-

pensable to preservation of freedom of association, par-

ticularly where a group espouses dissident beliefs.’” (Ci-

tations omitted)

It is a time-honored principle that disclosure laws like

the LMRDA, can only withstand constitutional scrutiny

* “Expression and association related to labor issues will fre-

quently constitute political activity which lies at the core of first

amendment protections.” Intern. Union, Etc. v. Nat. Right to

Work, 590 F.2d 1139, 1148 (D.C. Cir. 1979). However, even

“economically motivated association” is protected activity. /d.

when there exists a “substantial relationship between the

information sought and the government’s overriding and

compelling interest.” Jd. In order to avoid an unwar-

ranted chill on first amendment rights, such disclosure

laws must be drawn with narrow specificity, so that they

are the least restrictive means of achieving the govern-

mental end. Buckley v. Valeo, 424 U.S. 1, 64-68 (1976) ;

NAACP v. Alabama, 377 U.S. 288, 307-8 (1958) ; Com-

pare In Re Primus, 436 U.S. 412, 434 (1978).

Only in rare circumstances has this Court found a

governmental interest sufficiently compelling to justify

the kind of disclosure required by the decision of the court

below. Indeed, such laws have been vindicated only when

the “free functioning of our national institutions is in-

volved.” Buckley v. Valeo, 424 U.S. at 66, citing Com-

munist Party v. Subversive Activities Control Board, 367

U.S. 1 (1961); Uphaus v. Wyman 360 U.S. 72 (1959),

appeal dismissed, 364 U.S. 388 (1960) (Court compelled

disclosure of list of people at a camp believed to be a

communist front) ; Konigsberg v. State Bar of California,

366 U.S. 36 (1961) (inquiry permitted into bar appli-

cant’s membership in communist party ).*

In the present case, the court below paid lip service

to the principles governing disclosure statutes, but its

anaylsis belies any serious application of those principles

to the unde. lying facts. First, this case is not related to

any aspect of national security. As the lower court stated,

the purpose of the disclosure obligation in the LMRDA is

*It is noteworthy that in these cases, even while finding the

governmental interest “compelling,” this Court balanced the inter-

est against mitigating circumstances. For example, in Uphaus v.

Wyman, 360 U.S. 72 (1959), the information was available from

an independent source. In Konigsberg v. State Bar, 366 U.S. 36

(1961), the information was made available to a limited number of

persons. A profitable comparison does not exist here. The infor-

mation that the government seeks is and has been maintained on

a confidential basis and would, if the government is successful, be

made available to the public at-large.

to inform employees of a consultant’s interests when the

consultant seeks to influence the outcome of a union or-

ganization drive. While a legitimate interest, it is hardly

compelling, being in no way related to the “free func-

tioning of our national institutions”.

Second, the disclosures being sought will not substan-

tially further the government’s ends. Indeed, there is no

reasonable corrlation between the LMRDA’s purposes,

and the revelation of the entire membership list and finan-

cial structure of MPA. See Brown v. Socialist Workers’

74 Campaign Committee, 103 S. Ct. at 420. The LMRDA

was enacted in 1959 after the McClellan Committee hear-

ings. Its purpose was two-fold. It was enacted primarily

to curb the abuse of power by union leaders, and sec-

ondarily to prevent employers from interfering with

union organizing activities by covertly financing the ac-

tivities of union-busting “middlemen.” Master Printers

Ass’n v. Donovan, 699 F.2d 370 (7th Cir. 1983) ; see also

S. Rep. 187, 86th Cong., 1st Sess., reprinted in 1959 U.S.

Code Cong. & Ad. News, 2318, 2322-23.

The Act’s disclosure provisions, then, were intended to

publicize the identities of union-busting middlemen, to

prevent such activities from influencing employees’ vot-

ing in organizing campaigns. The assumption was that

publication would discourage these activities. In this case

there is no question as to the identity of MPA. MPA is

an unabashed, outspoken association of employers. No em-

ployee could mistake MPA for a neutral third party. It

is not a third party at all, since any employer for whom

the issue arises is a member. Knowledge of the identity

and character of MPA, standing alone, is sufficient to

fulfill the congressional goal of identifying for employees

any person who might seek to influence their votes in an

organizational drive.°

5The definition of “employer” in the LMRDA itself clearly

contemplates the identity of interest between an employer and an

employer association. 29 U.S.C. § 402(e) provides that “employer”

means “any employer or any group or association of employers.”

Third, as demonstrated by the Fifth Circuit decision in

Familias Unidas v. Briscoe, 619 F.2d 319 (5th Cir.

1980), the disclosure obligation required by the court be-

low, lacks the specificity mandated by the First Amend-

ment. At most, the statute could require MPA to report

the identity and the financial commitment of its three

members whose employees the former association execu-

tive addressed. Consequently, the decision below exceeds

the compass of the long line of decisions in which this

Court has artfully crafted the boundaries between per-

missible and impermissible government intrusions upon

members of associations who coalesce for commonly shared

goals.

B. The Decision Of The Court Below Cannot Be Recon-

ciled With The Well Reasoned Decision Of The

United States Court Of Appeals For The Fifth

Circuit, Carefully Circumscribing Governmental In-

fringement Of The Right To Associate In Private.

The issues raised in Familias Unidas v. Briscoe, 619

F.2d 391 (5th Cir. 1980), were virtually identical to those

raised here. In Familias, the court declared unconstitu-

tional a provision in the Texas Education Code, which

authorized a local court to order the “disclosure of the

membership of any organization . . . consider[ed] to be

engaged in activities designed to interfere with the peace-

ful operation of the public schools.” 619 F.2d at 394.

The organization argued strenuously on behalf of its mem-

bers, that the compelled disclosure was “an impermissible

state intrusion upon the rights of association and privacy

in association guaranteed ... by the First and Fourth

Amendments (footnote omitted).” Jd. at 398.

Even while finding the governmental interest in main:

taining peaceful schools “compelling,” the Fifth Circuit,

relying on decisions of this Court, found the Texas statute

objectionable in several respects. The Court found no re-

lation between the state’s interest and the effect of the

statute in subjecting to public recrimination,

members who not only may not have participated in,

but who may not have approved or even been aware

of, their organization’s involvement in the disruptive

activities that triggered the disclosure provision.

With respect to these people, disclosure bears no rela-

tion at all to the state interest in deterring school dis-

ruptions: One cannot be deterred from participating

in that which he has already foresworn, nor be dis-

suaded from supporting that of which he is unaware.

619 F.2d at 401.

The court took note of the fact that this Court had, in

several cases, permitted membership disclosures as a

“means of deterring groups from engaging in illicit

activities.” 619 F.2d at 400 (citations omitted, emphasis

added). The court pointed out that “members of such

organizations necessarily knew or should have known of

the illicit goals or proclivities of the organizations of

which they are a part.” Jd. at 401.

The court expressly disapproved subjecting a “passive

member of an historically benign organization” to the con-

sequences of disclosure.

While disclosure and the attendant public recrimina-

tions may be tolerated for knowing members of

groups openly avowing unlawful goals, it need not be

tolerated for those who have had no reason to antici-

pate that their organization would engage in pro-

scribed conduct. The Supreme Court seems implicitly

to have recognized this principle in Gibson v. Florida

Legislative Investigation Committee, where, in dis-

allowing compelled disclosures from NAACP mem-

bership rolls, it observed at that “this Court ‘had up-

held ... legislation aimed at the Communist problem

which in a different context would certainly have

raised constitutional issues of the gravest charac-

ter.’” 372 U.S. at 547 n.2, 83 S.Ct. at 894 n.2, quot-

ing Barenblatt v. United States, 360 U.S. 109, 128,

79 S. Ct. 1081, 1098, 3 L.Ed.2d 1115 (1959).

619 F.2d at 401.

For the same reasons, the disclosure ordered by the

court below cannot be permitted. MPA is not an organi-

zation avowed to ovefthrow the government. Nor is its

philisophy, doctrines or goals illegal.* Thus, the decision

of the court below is in stark conflict with the decision

of the Fifth Circuit in Familias Unidas v. Briscoe.

C. The Court Below Ignored This Court’s Instructions

To Allow Flexibility In The Kind And Amount Of

Proof Required To Demonstrate First Amendment

Violations.

The panel majority ran afoul of this Court’s admoni-

tion to avoid “unduly strict requirements of proof” and

to employ “flexibility” in this regard. Brown v. Socialist

Workers, 103 S. Ct. at 421, citing Buckley v. Valeo, 424

U.S. 1, 74. Indeed, “[t]he evidence offered need show

only a reasonable probability that the compelled disclosure

. will subject [members] to threats, harassment, or

reprisals from either government officials or private

parties.” Id.

As Judge Pell aptly stated in his dissenting opinion:

It takes no effort of the imagination to conceive what

capital Union organizers could make of the Associa-

tion: “With a union shop this money which is now

paid to an outsider would be coming your way in the

form of increased wages.” This would be only one

example of the use to which the information could be

put. As I noted earlier herein, trade unions have

been particularly traditionally associated with the

printing craft. It is an uneasy situation for the

printer wishing to maintain a non-union shop, which

it is privileged to do, if a majority of the employees

do not desire unionization. I note also the difficulty

of getting affidavits from the member-employers on

®Indeed, MPA’s right to engage in the activities which gave

rise to this action, is guaranteed by the First Amendment and the

LMRDA. See 29 U.S.C. 433(f) and section 8(c) of the Labor

Management Relations Act, 29 U.S.C. § 158(c).

the chilling aspect as the very execution and filing

would result in an indirect disclosure of that which

is now sought directly.’

D. The Decision Of The Court Below Is Inconsistent

With Decisions Of This Court Which Constrain The

Governmental Infringement Of Free Speech.

This Court has long subjected to strict scrutiny any

legislation that deters free expression. The LMRDA’s re-

porting requirement, as construed by the court below, is

such a broad requirement that it infringes upon the pro-

tected right of employers to communicate with their

employees. A similar requirement was disapproved by

this Court in Thomas v. Collins, 323 U.S. 516 (1945).

In Thomas v. Collins, this Court struck down a Texas

statute that required similar disclosures from union or-

ganizers. At issue was the extent to which the state

could restrain union officials from discussing with and

informing employees concerning their rights to organize.

This Court emphasized the importance of free speech in

a labor relations context:

Free discussion concerning the conditions in industry

and the causes of labor disputes appears to us indis-

pensable to the effective and intelligent use of the

processes of popular government to shape the destiny

of modern industria] society ... The right thus to

discuss, and inform people concerning, the advan-

tages and disadvantages of unions and joining them

is protected not only as part of free speech, but as

part of free assembly.

823 U.S. at 582.

7 With all due deference to the majority, we agree with Judge

Pell that, contrary to Fed. R. Civ. P. 56, “the district court did

not accept [MPA'’s| allegations as true.” Master Printers, 699 F.2d

at 374 (Pell, J., dissenting). Rather, it resolved what it per-

ceived to be disputed issues of fact. This was clearly erroneous.

Dreher v. Sielaff, 686 F.2d 1141, 1143 n.4 (7th Cir. 1980).

This Court flatly rejected the state’s contention that

its disclosure law did not censor any protected activity,

stating:

If one who solicits support for the cause of labor may

be required to register as a condition to the exercise

of his right to make a public speech, so may he who

seeks to rally support for any social, business, reli-

gious or political cause. We think a requirement that

one must register before he undertakes to make a

public speech to enlist support for a lawful movement

is quite incompatible with the requirements of the

First Amendinent.

Id. at 540.

MPA’s members are likewise protected in their right to

communicate with their employees. See 29 U.S.C. § 208

(f). Yet the Seventh Circuit’s overly broad interpretation

would deter employers from obtaining professional as-

sistance and advice, thereby necessarily limiting com-

munication with their employees. Thus, review is needed

in order to resolve the conflict between the Seventh Circuit

decision in this case and Thomas v. Collins.

Broad prophylactic rules in the area of free expression

have always been inherently “suspect.” It is irrelevant

whether the deterrent on free expression arises “not

through direct government action, but indirectly as an

unintended but inevitable result of the government’s con-

duct in requiring disclosure (footnotes omitted).” Buckley

v. Valeo, 424 U.S. at 65. “Precision of regulation must

be the touchstone in an area so closely touching our most

precious freedoms.” Button, 424 U.S. 415, 488 (1963) ;

In re Primus, 486 U.S. 412 (1978).

The decision of the court below is irreconcilable with

these well-established protections. Thus, review by this

Court is appropriate for rectifying the misapplication of

these important constitutional principles that occurred

below.

CONCLUSION

For all of the foregoing reasons, a writ of certiorari

should be issued to review the judgment of the United

States Court of Appeals for the Seventh Circuit.

ean: submitted,

Draws | Coarme—

FRANCIS T. COLEMAN, JR.*

ELIZABETH L. LEWIS

BooTHE, PRICHARD & DUDLEY

1000 Potomac Street, N.W.

(202) 333-9532

CYNTHIA WICKFR

STEPHEN A. BOKAT

NATIONAL CHAMBER LITIGATION

CENTER, INC.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

Attorneys for Master Printers

Association

* Counsel of Record

APPENDIX

Contents App. Page

United States Court of Appeals for the Seventh Cir-

I a eiineadbeibiohisionds la

United States District Court for the Northern District

of Illinois, Eastern Division’s Memorandum Opinion... lla

Order Denying Petition for Rehearing En Banc .......... 40a

Initial Complaint filed by Secretary of Labor ................ 42a

Affidavit of Robert Lindgren (without exhibit) ............. 45a

APPENDIX

IN THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 82-1459

MASTER PRINTERS ASSOCIATION, a Division of

Printing Industry of Illinois,

Defendant-A ppellant,

Vv.

RAYMOND J. DONOVAN, Secretary of Labor,

United States Department of Labor,

Plaintiff-A ppellee.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 80 C 1768—Prentice H. Marshall, Judge.

ARGUED NOVEMBER 30, 1982—DECIDED JANUARY 31, 1983

Before PELL, BAUER, Circuit Judges, and TIMBERS,

Senior Circuit Judge.*

BAUER, Circuit Judge. The Secretary of Labor initiated

this action against Master Printers Association (MPA),

alleging that MPA violated section 203 of the Labor

*The Honorable William H. Timbers, Senior Judge of the

United States Court of Appeals for the Second Circuit, is sitting

by designation.

Management and Disclosure Act, 29 U.S.C. § 433, by

failing +o file complete reports of its labor relations

activity. MPA defended on the grounds that the Secre-

tary’s reading of section 203’s disclosure requirements

was overly broad and contrary to the legislative history,

the statutory scheme and the plain language of the stat-

ute. It also contended that by interpreting section 203 to

require complete disclosure of persuader and nonpersuader

labor relations activity whenever a labor consultant en-

gaged in any persuader activity violated the constitutional

rights of MPA and its members to freedom of speech,

freedom of association, freedom from unreasonable

searches and seizures, and due process.

The parties filed cross motions for summary judgment.

The district court granted the Secretary’s motion for

summary judgment and denied MPA’s motion for sum-

mary judgment, holding that section 203 required MPA

to file the complete reports of all its labor relations

activity for any year in which it engaged in some per-

suader activity. In rendering its memorandum opinion

the district court thoroughly and carefully analyzed all

the issues raised in this appeal. Accordingly, we affirm

and adopt the excellent opinion of the district court, which

is reprinted below.

PELL, Circuit Judge, dissenting. The memorandum

opinion of the district court, by virtue of adoption by the

majority of the panel hearing this appeal, is now the

opinion of this court. Because I regard the district

court’s opinion, notwithstanding the thorough and ob-

jective analysis it provides in its some 34 pages, to have

reached an incorrect result I respectfully dissent.

As a beginning point, it appears important to me to

focus on the undisputed facts. One is that the Master

Printers Association (Association) is comprised of ap-

proximately 800 printing shops all of which are non-

union plants, which status is probably a particularly

uneasy one in the traditionally well organized craft of

printing. In 1976 the former executive director of the

Association delivered on three occasions speeches to em-

ployees of three different members employers. The Sec-

retary of Labor determined that these three speeches

constituted instances of “persuader” activity under Sec-

tion 203 of the Labor-Management Reporting and Dis-

closure Act of 1959, 29 U.S.C. § 433(b) (the Act). The

Secretary’s interest in the Association did not stop there,

however, as the Secretary demanded reports uncer the

Act not only from the three employers in question but for

the other some 797 members; members for whom no

“persuader” services had been rendered. In effect and in

actuality, the Secretary has sought to compel the Associa-

tion to disclose its entire membership list and all monies

received and disbursed in connection with the Associa-

tion’s non-persuading labor relations advice and services

on behalf of all of its members. It is also important to

focus on the fact that the Secretary on this appeal con-

cedes that if the three speeches had not been made the

Association would not have had to furnish the informa-

tion now demanded.

The Secretary on this appeal and the district court in

its opinion rely heavily on two cases from other circuits,

Douglas v. Wirtz, 353 F.2d 30 (4th Cir. 1965), cert.

denied, 383 U.S. 909 (1966); and Price v. Wirtz, 412

F.2d 647 (5th Cir. 1969) (en banc). Those two cases in-

volved attorneys who gave advice on labor relations mat-

ters but who had gone across the line into direct contact

with employees to have become persuaders within the

meaning of the Act. Price, the later case, even in the

limited sphere of contacts of attorneys as contrasted to

the broad relationship here involved, came from a closely

divided 5th Circuit. The fact that there was a majority

opinion joined in by six judges and a strong dissent by

Judge Dyer, joined in by Judges Gewin, Coleman, Ains-

worth and Godbold, emphasizes the perilous voyage into

the shoals of constitutional violation inherent in the judi-

cial gloss put on the Act by the present majority opinion.

An important additional element, and one differing from

Douglas and Price, exists in the present case and that is

the associational aspect of this membership organization.

Thus, in the present case, it appears to me if the Congress

had meant what the Secretary, district court, and the

majority opinion of this court say it meant, not only

would there have been an infringement of the Asso-

ciation’s right of free speech and due process, but an

infringement on the First Amendment right of free

association.

The pertinent parts of Section 203 of the Act involved

here read as follows:

i eee

Every such person [who undertakes persuader ac-

tivity] shal! file annually, with respect to each fiscal

year during which paymerts were made as a result

of such an agreement or arrangement, a report with

the Secretary, signed by its president and treasurer

or corresponding principal officers, containing a state

ment (A) of its receipts of any kind from employers

on account of labor relations advice or services,

designating the sources thereof, and (B) of its dis-

bursements of any kind, in connection with such

services and the purposes thereof. In each such case

such information shall be set forth in such categories

as the Secretary may prescribe.

(ec) Nothing in this section shall be construed to

require any employer or other person to file a report

covering the services of such person by reason of his

giving or agreeing to give advice to such employer or

representing or agreeing to represent such employer

before any court, administrative agency, or tribunal

of arbitration or engaging or agreeing to engage in

collective bargaining on behalf of such employer with

respect to wages, hours, or other terms or conditions

of employment or the negotiation of an agreement or

any question arising thereunder.

I find it difficult to read (c) other than as a limitation,

specifying the boundaries of the report required in (b)

as those instances where only those employers to whom

or at which persuader activities were provided and elimi-

nating from the scope of (b) those persons who were

merely the recipient of advice such as that rendered by

the Association in this case. Nevertheless, the district

court, accepting what I regard as the weird construction

placed on the Act by the Secretary, refers to this as being

the clear expression of Congressional intent. Yet else

where in its opinion, the district court candidly states

that it is “apparent from reading the act that the language

of paragraphs (b) and (c) requires reconciliation.” The

district court then follows with a quotation, which ap-

parently it approves, from Aaron, The Labor Manage-

ment Reporting and Disclosure Act of 1959, 73 Harv. L.

Rev. 851, 891 (1960):

Read literally, Section 203(b) seems to compel [the]

conclusion [that one persuader activity triggers the

requirement of 100% reporting including non-per-

suader activities]; but the opposite conclusion is

indicated by section 203(c), which specifically states

that consultants need not report the mere giving of

advice to employers, or the representation of em-

ployers in an arbitration, administrative, or judicial

proceeding. This is another example of the ambigui-

ties produced by the inartistic draftsmanship which

characterizes much of the statute. (Emphasis added.)

I have a conceptual difficulty in equating clear expression

of “Congressional intent” with “ambiguities.” Further,

the district court while referring to the “potentially con-

fusing language” of the Act then eliminates the poten-

tiality by finding persuasively that the exemption was

included in 203/c) merely “to guard against misconstruc-

tion.” That Congress should legislate in the form of

limiting Section 203(c) for the purpose of guarding

against misconstruction of Section 203(b) by clarifying

what it had just said is scarcely flattering to the legisla-

tive draftsmanship.

We have been provided on this appeal with extensive

references to the utterances of the members of Congress

in connection with the evolution of the Act, including

references to its predecessor, pre-cursor, earlier enact-

ments, and, as the district court correctly pointed out,

both parties take the position that “the legislative history

accompanying the act supports their view.” In my exami-

nation of the cited legislative history, I agree that both

parties could find supportive statements. From my read-

ing, however, this legislative history is valueless for any

clear and explicit statement to the effect that one who

engaged in a persuader activity as to one employer of

labor thereby opens its books as to all other employers

“as to whom it has engaged only in advice without the

direct persuader activity.”

In my opinion, the Association has reconciled the in-

consistent two paragraphs so as to give meaning to both

sections, which position I think this court would have

been well advised to have taken. The Association con-

tends that the “advice” which subsection (c) excludes is

that advice given to an employer for whom no persuasion

activities are also performed. In other words, if Consult-

ant A has agreements with Employer X to provide advice

and persuasion, with Employer Y to provide only advice

and with Employer Z to provide persuasion, it would

have to include in its annual report all of its receipts

and disbursements for X and Z and nothing at all for Y.

Advice becomes reportable only when it is done as part

of a persuasion agreement or for an employer for whom

a consultant also does persuasion,

This construction not only avoids the constitutional

problems inherent in the approach by the Secretary and

adopted by the district court but gives full effect to Sec-

tion 203 in its entirety. The district court in its extended

opinion emphasizes the danger posed by middlemen in

the labor relations field, a strong connection between cor-

ruption in the labor field and the activities of manage-

ment persuaders, and that Congress viewed management

persuaders as inherently suspect and their activities sub-

ject to abuse in an extremely sensitive field. In the dis-

trict court’s opinion the Congressional concern with

persuader activities apparently acquired, at least a ma-

jority of the Congressional minds, an evil connotation.

Leaving aside the possibly questionable conclusion that

employees in today’s sophisticated labor market would be

more likely to be influenced improperly by direct contact

from an outside source than they would be by activities

of their own management, the fact remains that under

the Act, as construed by the Secretary and not negated

by the district court’s opinion, the Association could chan-

nel information and advice to its some 800 members who

could then use that advice and information as their own

and in the absence of direct contact between the Associ-

tion and the employees there would be no duty under the

Act to make the full disclosure with which the Association

is now confronted.

The construction of the Act advanced by the Associa-

tion, and the one which I believe is a proper one, is one

which avoids the distinct likelihood of constitutional in-

firmity. The five judges dissenting opinion in Price v.

Wirtz, supra, adverted to the desirability of avoiding

constitutional difficulties inherent in the majority’s in-

terpretation by a different construction of the Act which

would have precluded the disclosure contended for by

the Secretary. 412 F.2d at 656. Again it must be borne

in mind that the constitutional issues which the dissenters

found to constitute grave deficiencies in the majority

opinion did not include the important additional one of

freedom of association which exists in the present case.

The Supreme Court very recently reemphasized the canon

or statutory construction which, in my opinion, is brought

into play by the grave constitutional deficiencies existing

in the majority opinion. In United States v. Security

Industrial Bank, —— U.S. ——, 108 S. Ct. 407 (1982)

the Court, after considering the potentiality of constitu-

tional violations in the recently adopted Bankruptcy Act,

stated that it considered the statutory question because

of the

“ ‘cardinal principle that this Court will first ascer-

tain whether a construction of the statute is fairly

possible by which the constitutional question may be

avoided.’” Lorillard v. Pons, 484 U.S. 575, 577

(1978), quoting Crowell v. Benson, 285 U.S. 22, 62

(1932).

Id. at 412. Applying this “cardinal principle” of statutory

construction, I can reach only one conclusion and that is

that all of the language of the two subparagraphs be

given effect in the manner set out earlier herein; the

construction given by the district court, and adopted by

this court, not only renders meaningless some of the

language in the subsections but further renders them

subject to constitutional attack.

In connection with the chilling effect of the complete

disclosure, I am not unmindful that the district court

expressed skepticism of the “fears” expressed by the

defendants. The court followed this statement of skepti-

cism by stating that even accepting their allegations as

true, it did not believe that those allegations made out a

claim under the First Amendment. The Court’s rationale

apparently was that governmental interests were suffi-

ciently important to outweigh the possibility of infringe

ment. But I search in vain for any demonstration of

governmental! interest in requiring the disclosure of the

membership of the Association when 797 members of the

Association have only been potential recipients of advice,

when there would have been no disclosure required by the

statute if all 800 had received only advice.

Further, unfortunately, the district court did not accept

the allegations as true. Affidavits were submitted show-

ing that the order of disclosure did indeed have a chilling

effect. Under any circumstances summary judgment was

inappropriate. At the very least, there should have been

a trial on the matter of whether under the particular labor

relations situation here involved there was a chilling im-

pact on the right of free association.

It appears to me, however, on the basis of the affidavits

that summary judgment in favor of the Association was

appropriate. It takes no effort of the imagination to con-

ceive what capital Union organizers could make of the

disclosure of the membership and their payments to the

Association: “With a union shop this money which is now

paid to an outsider would be coming your way in the form

of increased wages.”’ This would be only one example of

the use to which the information could be put. As I noted

earlier herein, trade unions have been particularly tra-

ditionally associated with the printing craft. It is an

uneasy situation for the printer wishing to maintain a

non-union shop, which it is privileged to do, if a majority

of the employees do not desire unionization. I note also

the difficulty of getting affidavits from the member-

employers on the chilling aspect as the very execution and

filing would result in an indirect disclosure of that which

is now sought directly.

The district court itself recognized that “Congress has

specifically provided, and the Supre:ne Court has held,

that employers in the labor relations field are protected

under the constitution.” I am not aware that the First

Amendment right of free arsociation would be treated

any differently. The district court quotes approvingly

10a

from Buckley v. Valeo, 424 U.S. 1, 64-65 (1976), that

there be “‘relevant correlation” or “substantial relations”

between the governmental] interests and the information

required to be disclosed. At the risk of being repetitive,

I again search in vain for any substantial relationship

between governmental interest and the disclosure of the

membership data of the entire Association.

The Secretary concedes that if the Association had only

engaged in one act of directly speaking to employees of

one member of the Association, full disclosure of the other

799 members would have been demanded by the Secretary.

On the other hand, if there had been no persuader activity

whatsoever there would have been no demand. I cannot

regard the result as being other than not only unwar-

ranted but peculiar.

Finally, the district court opines that the act would be

less than effective if it permitted the targets of the pub-

licity to be entirely free from public scrutiny where they

are able to couch their function as “advice” rather than

persuasion. This expression of alarm might have been

more persuasive if it were not for the fact that the so-

called targets of publicity are concededly entirely free of

public scrutiny where they impart information in the

form of advice rather than persuasion. The Secretary

does not contend otherwise.

lla

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

No. 80 C 1786

RAYMOND J. DONOVAN, Secretary of Labor,

Department of Labor,

Plaintiff,

MASTER PRINTERS ASSOCIATION, A DIVISION OF

PRINTING INDUSTRY OF ILLINOIS ASSOCIATION,

Defendant.

MEMORANDUM OPINION

PRENTICE H. MARSHALL, District Judge

This case involves a challenge to the Secretary of La-

bor’s (“Secretary”) interpretation of § 203 of the Labor

Management Reporting and Disclosure Act (“LMRDA”

or “Act”), 29 U.S.C. § 433 (1959). The Secretary seeks

to compel defendant, Master Printers Association (““As-

sociation’) to disclose the names and various aspects of

its relationship with clients who receive labor relations

advice from the Association. The Association contests

the Secretary’s interpretation of the Act and alterna-

tively raises several constitutional objections to the dis-

closure requirements. Both sides have moved for sum-

mary judgment pursuant to Rule 56, Fed. R. Civ. Pro.

and exhaustive briefs have been filed. The records and

files of the case present no genuine issues of material

fact and the case is ready for decision.

The facts are not in dispute. The Association is an

unincorporated trade organization comprised of approxi-

12a

mately 800 non-union printing shops. The purpose of the

Association is, in part, to counsel and advise its mem-

bers on how to keep their employees unorganized. To this

end the Association provides a variety of services for its

members, including literature, meetings and counseling

on how to maintain “open” shops, and establishing credit

unions and other benefit programs for the unorganized

employees. Affidavit of Robert Lindgren, Exhibit D.

In 1976 the former executive director of the Associa-

tion made three separate speeches directly to employees

of three of its member employers. The Secretary, pur-

suant to Title II of the LMRDA, Section 203, 29 U.S.C.

$ 433(b), determined that these speeches constituted

“persuader activity” within the meaning of the Act and

therefore ordered reports and disclosure of the relation-

ship between the Association and those employers. In

addition the Secretary ordered the Association to report

the names and disbursement records of all other employ-

ers who had received labor relations advice regardless of

whether they received persuader services. The Associa-

tion filed the required reports for the three employers,

but refused to comply with respect to its other member-

employers. The Secretary instituted this action to compel

disclosure. The questions presented here are whether the

LMRDA supports the broad disclosure interpretation

urged by the Secretary and, if it does, whether the re-

porting sections of the Act can withstand constitutional

scrutiny.

The LMRDA grew out of the lengthy and well pub-

licized McClellan Committee investigations into organ-

ized labor in the late 1950’s.'' The legislation which ulti-

mately passed after several years of debate and many

attempts dealt primarily with insuring internal union

1See Interim Report of the Select Committee on Improper

Activities in the Labor or Management Field [McClella:: Report],

S. Rep. 1417, 85th Cong., 2nd Sess. (1958).

13a

democracy and public disclosure of union financial ar-

rangements.* In addition, the LMRDA and its precur-

sors, the Kennedy-Ives Bill, S. 3974, 85th Cong., 2d Sess.

(1958), the Kennedy-Ervin Bill, S. 505, 86th Cong., 2d

Sess. (1959), and finally S. 1555, 86th Cong., 1st Sess.

(1959) authored by Senator John F. Kennedy, focused

on the influence of “middlemen” employed by manage-

ment to influence employees in the exercise their rights

under $7 of the National Labor Relations Act (NLRA),

29 U.S.C. § 157 (1976). The Senate Report accompany-

ing the Act explained:

It is also plain that there are important sections

of management that refused to recognize that the

employees have a right to form and join unions with-

out interference and to enjoy freely the right to

bargain collectively with their employer concerning

their wages, working conditions, and other condi-

tions of employment. . . . [Employers] have em-

ployed so-called middlemen to organize “no-union

committees” and engage in other activities to pre-

vent union organization among their employees. They

have financed community compaigns to defeat union

organization. They have employed investigators and

informers to report on the organizaing activities of

employees and unions. It is essential that any legis-

lation which purports to drive corruption and im-

proper activities out of labor-management relations

contain provisions dealing effectively with these

problems.

S. Rep. 187, 86th Cong., 1st Sess. at 10 reprinted in

[1959] U.S. Code & Admin. News 2318, 2322-23 (1959) .*

2The Act contains the so-called Bill of Rights for union mem-

bers and requires far more extensive reporting and disclosure

requirements of unions and their officers than it does of employers

and consultants. See §§ 101-105, 201, 202, 301-306, 401-404, 29

U.S.C. §§ 411-415, 431, 432, 461-466, 481-483, 501-504 (1976).

8 There is a great deal of legislative history accompanying the

LMRDA as passed and the two preceeding attempts (Kennedy-

l4a

It is clear that Congress did not look favorably on the

activity of outside consultants and believed they frequently

engaged in practices of questionable legality.

The committee notes that in almost every instance

of corruption in the labor-management field there

have been direct or indirect management involve-

ments [sic]. The report of the McClellan committee

describes management middlemen flitting about the

country on behalf of employers to defeat attempts at

labor orgenization. .. .

The committee believes that employers should be

required to report their arrangements with these

union-busting middlemen. Further, the Committee

on Labor and Public Welfare has received evidence

in prior hearings showing that large sums of money

are spent in organized campaigns on behalf of some

employers for the purpose of interfering with the

right of employees to join or not to join a labor or-

ganization of their choice, a right guaranteed by the

National Labor Relations Act. Sometimes these ex-

penditures are hidden behind committees or fronts;

however the expenditures are made, they are usually

surreptitious because of the unethical content of the

message itself. The committee believes that this type

of activity by or on behalf of employers is repre-

hensible. These expenditures may or may not be

Ives and Kennedy-Ervin) which failed in the House. The parties at

various places in their several briefs refer to reports and comments

on all three bills coming from a variety of sources. Unfortunately,

while there have been several extensive compilations of the history

of this legislation, no one source contains all of the statements

relied on by the parties or this opinion. We have drawn from three

separate sources: [1959] U.S. Code & Admin. News 2318 (1959) ;

Legislative History of the Labor-Management Reporting and Dis-

closure Act of 1959, National Labor Relations Board (1959) [here-

inafter cited as Leg. Hist. (NLRB)]; Legislative History of the

Labor-Management Reporting and Disclosure Act of 1959, Depart-

ment of Labor (1960) [hereinafter cited as Leg. Hist. (Labor) }.

l5a

technically permissible under the National Labor Re

lations Act ..., or they may fall in a gray area. In

any event, where they are engaged in they should be

exposed to public view, for if the public has an in-

terest in preserving the rights of employees then it

has a concommitant obligation to insure the free

exercise of them.

S. Rep., supra at 2326-37.

In response to the problems outlined above the LMRDA

provides criminal sanctions for improper payments by

middlemen to employees* and requires disclosure of the

employer-middlemen relationship. Section 203 of the Act,

29 U.S.C. § 483 (1976), provides in relevant part:

(b) Every person who pursuant to any agreement or

arrangement with an employer undertakes activities

where an object thereof is, directly or indirectly—

(1) to persuade employees to exercise or not to

exercise, or persuade employees as to the manner

of exercising, the right to organize and bargain

collectively through representatives of their own

choosing; or

(2) to supply an employer with information

concerning the activities of employees or a labor

organization in connection with a labor dispute

involving such employer, except information for

use solely in conjunction with an administrative

or arbitral proceeding or a criminal or civil

judicial proceeding;

shall file within thirty days after entering into such

agreement or arrangement a report with the Secre-

tary, signed by its president and treasurer or cor-

responding principal officers, containing the name

under which such person is engaged in doing business

*See § 5, 29 U.S.C. § 186 (1976).

l6a

and the address of its principal office, and a detailed

statement of the terms and conditions of such agree-

ment or arrangement. Every such person shall file

annually, with respect to each fiscal year during which

payments were made as a result of such an agree-

ment or arrangement, a report with the Secretary,

signed by its president and treasurer or correspond-

ing principal officers, containing a statement (A) of

its receipts of any kind from employers on account

of labor relations advice or services, designating the

sources thereof, and (B) of its disbursements of any

kind in connection with such services and the purpose

thereof. In each such case such information shall be

set forth in such categories as the Secretary may

prescribe.

(ce) Nothing in this section shall be construed to re-

quire any employer or other person to file a report

covering the services of such person by reason of his

giving or agreeing to give advice to such employer

or representing or agreeing to represent such em-

ployer before any court, administrative agency, or

tribunal of arbitration or engaging or agreeing to

engage in collective bargaining on behalf of such

employer with respect to wages, hours, or other terms

or conditions of employment or the negotiation of an

agreement or any arising thereunder.

It should be apparent from reading the Act that the

language of paragraphs (b) and (c) requires reconcilia-

tion. What the Act requires in terms of reporting obli-

gations in paragraph (b) it appears to exempt in para-

graph (c). As one commentator noted,

There seems to be some confusion, however, concern-

ing whether a consultant who has an agreement with

any one employer to persuade employees or to furnish

information must then include in his annual report

receipts from, and disbursements on behalf of, all

other employers for whom he has performed labor-

17a

relations services that would otherwise not have to be

reported. Read literally, section 203(b) seems to

compel that conclusion; but the opposite conclusion is

indicated by section 203(c), which specifically states

that consultants need not report the mere giving of

advice to employers, or the representation of em-

ployers in an arbitration, administrative, or judicial

proceedings. This is another example of the ambigui-

ties produced by the inartistic draftsmanship which

characterizes much of the statute.

Aaron, The Labor Management Reporting and Disclosure

Act of 1959, 73 Harv. L. Rev. 851, 891 (1960). It is

precisely this ambiguity that we are called upon to resolve

in the case at bar.

The Secretary reads § 203(b) to require the reporting

of receipts and disbursements for all clients who received

any labor relations advice if a labor consultant engages in

any persuader activity.° Thus, the Secretary treats the

rendering of persuader services as a trigger which com-

pels full disclosure of information otherwise non-re}ortable

under § 203(c). The sole function of paragraph (c) is to

exempt from the filing requirements labor consultants who

engage in no persuader services and limit their activity

to the giving of advice and the representative functions

listed in the Act. A consulting firm must confine itself

solely to non-persuader activity unless it wants to incur

a duty to make financial disclosure as to all its clients,

even those who receive only advice outside the scope of

direct or indirect employee persuasion. Plaintiff’s Memo

randum in Support at 6-8.

5 The Secretary’s view is well presented in a 1965 article by the

then Associate Solicitor of the United States Department of Labor.

See Beaird, Reporting Requirements for Employers and Labor Re-

lations Consultants in the Labor-Management Reporting and Dis-

closure Act of 1959, 53 Geo. L. J. 267 (1965) [hereinafter cited

as Beaird, Reporting Requirements}.

18a

The defendant offers several counter interpretations of

the Act, urging that it can be best reconciled by restrict-

ing the reporting requirement to all labor relations serv-

ices—including advice—to any employer who receives

persuader services, but not to employers who receive only

non-persuader services. Defendant’s Memorandum in Sup-

port at 20-22.° Defendant argues that this interpretation

is preferable because the Secretary’s reading of the statute

renders section (c) a mere repetition of what is already

apparent from section (b). Jd. at 23. Defendant further

argues that this interpretation is consistent with the Con-

gressional purpose of focusing the “floodlights of pub-

licity” on those who provide persuader services. Only

where there is persuader activity—contact between the

consultant and employees—did Congress exhibit a con-

cern sufficient to require the report of receipts and dis-

bursements.

Both parties argue that the considerable legislative

history accompanying the Act supports their view; and

both sides agree that judicial interpretation to date gen-

erally supports the Secretary’s interpretation of the Act.

See Douglas v. Wirtz, 353 F.2d 30 (4th Cir. 1965), cert.

denied, 383 U.S. 909 (1966); Wirtz v. Fowler, 373 F.2d

315 (5th Cir. 1966) overruled, Price v. Wirtz, 412 F.2d

647 (5th Cir. 1969) (en banc). For the reasons stated

below, we find that the Secretary offers the proper con-

struction of the Act and as construed the reporting sec-

tions do not violate defendant’s constitutional rights.

The Fourth Circuit in Douglas, the first case to address

the subject reporting requirement of the LMRDA, held,

in a 2-1 opinion, that § 203 requires the reporting of all

advice given by a labor relations consultant who engaged

*For an argument in support of the defendant’s position, see

generally, Note, Two Views of a Labor Relations Consultant’s Duty

to Report Under Section 203 of the LMRDA, 65 Mich. L. Rev. 752

(1967) [hereinafter cited as Note, Two Views].

19a

in even a single instance of persuader activity. The Fifth

Circuit initially took the contrary view in Wirtz v. Fowler,

but reversed iself, en banc, in Price v. Wirtz.

The Douglas court recognized the apparent conflict be-

tween paragraphs (b) and (c) and held “[a] reasonable

reconcilation . . . is to compel the reporting of all income

and expendituures in connection with labor relations ad-

vice and services, given or rendered aside from the per-

suasion activities, if the [consultant] has within the same

reporting period also either acted or received payment as

a persuader under § (b) (1).” Douglas at 32. The court

focused on the “by reason of” language in section (c) and

concluded :

. advice in itself and alone does not create an

obligation to report. But the two sections together

declare that when persuasion services or receipts

therefor and independent advice occur in the same

fiscal year, all of them must be reported. Jd.

In addition, Douglas relied on passages from two Sen-

ate Committee reports which indicate that a consultant

who “confines himself to giving legal advice” or other

activities listed in 203(c) need not report. Douglas at 33,

quoting S. Rep. 187, supra: By using the word “confines”

Congress intended that any provision of persuader services

forfeited the exemption. 7d. The opinion of the Fifth

Circuit in Price follows the Doug : reasoning. See Price

at 649. The court stated the matter succintly: “[Dis-

closure of all labor relations advice is the price the

attorney-persuader must pay if he wishes to engage in

those activities.” Jd. at 650.

Defendant vigorously contends that the Fourth and

Fifth Circuit erred in their construction of the Act. We

disagree. The Association’s principal argument is that the

Douglas interpretation renders section (c) meaningless—

a mere “truism that the non-reportable giving of advice

does not give rise to a duty to report.” Note, Two Views,

20a

at 756. They also contend that by using the language “an

object” in section (b) the drafters indicated disclosure is

required only where advice is accompanied by persuasion—

i.e. the argument has more than one object. Finally,

defendant relies on a number of comments in the ex-

tensive legislative history indicating that the main thrust

of Congressional concern was persuader activity, not the

giving of advice outside persuader agreements.’

Contrary to defendant’s argument, our reading of the

statute does not render section (c) meaningless. Rather,

it stands as a gloss on the potentially confusing language

of section (b) and indicates that engaging in the activi-

ties listed in section (c) does not, in and of itself, give

rise to a duty to report. The opening language of section

(ec), “Nothing in this section shall be construed to re-

quire .. .”, supports the view of (c) as a clarification

designed to avoid confusion. Moreover, the committee

report accompanying the Kennedy-Ives Bill, where the

management disclosure requirement originated, states:

Section 103(b) requires a labor-relations consult-

ant to file a financial report upon his labor-relations

activities if he undertakes to influence or affect em-

ployees in the exercise of their rights guaranteed by

the [NLRA] . .. Since attorneys at law and other

responsible labor-relations advisors do not themselves

engage in influencing or affecting employees in the

exercise of their rights . . . an attorney or other

7 Plaintiff, in its initial brief addressing the statutory question

at issue, relied on the statements of two opponents of the Act. It

has frequently been stated, and defendant was quick to point out in

response, that reliance on the statements of opponents is inappro-

priate when construing an act. See NLRB v. Fruit Packers, 377

U.S. 58, 66 (1964) ; Schwegmann Bros. v. Calvert Distillers Corp.,

341 U.S. 384, 394-95 (1951). We assure defendant that we have

placed no stock in the interpretation offerred by these opponents

and rely instead on the legislative history and statutory language

cited herein.

2la

consultant who confined himself to giving advice, tak-

ing part in collectively bargaining and appearing in

court and administrative proceedings [would not] be

required to report. Although this would be the mean-

ing of the language of the section 103(a) and (b)

in any event, a proviso to section 103(b) guards

, against misconstruction.

S. Rep. 1684, 85th Cong., 2d Sess. (1958) reprinted in

Leg. Hist. (Labor) at 390 (emphasis added).

Both parties agree in their briefs that reliance on com-

mentary to the Kennedy-Ives Bill is appropriate because

it is similar in content and structure with the LMRDA.

Section 103(b) referred to in the quoted comment is

almost identical with section 203(c) of the Act. The

proviso in the original bill ultimately became section

203(c). Thus, the statement that the exemption is in-

cluded merely to guard against misconstruction is par-

ticularly persuasive.” Further, we agree with the courts

8 The relevant section of the Kennedy-Ives Bill, S. 3974, is as

follows:

(b) Every person engaged in providing labor relations

consultant service to an employer engaged in an industry

affecting commerce pursuant to any agreement or arrange

ment under which such consultant undertakes—

(A) to influence or affect employees in the exercise of

their rights guaranteel by Section 7 of the National Labor

Relations Act, as amended, or by the Railway Labor Act,

as amended, or

(B) to provide an employer involved in a labor dispute

with the services of paid informants or investigators, or

any agency or instrumentality engaged in the business of

interfering with, restraining, or coercing employees in the

exercise of rights guaranteed by section 7 of the National

Labor Relations Act, as amended, by the Railway Labor

Act, as amended, or

shall file annually a report with the secretary [sic], signed by

its president and treasurer of corresponding principal officers,

containing the following information:

22a

in Douglas and Price that the “by reason of” language is

a strong indication that the purpose of section (c) is to

avoid any reliance on the giving of advice alone as a

trigger for the consultant’s duty to report.

Like the court in Price, we believe that the legislative

history supports, if it does not compel, this view. Price at

650. Defendant places considerable weight on the state-

ment of Senator Kennedy discussing the predecessor

legislation:

The Senate passed bill . . . contained a strong

detailed provision requiring employers and middle-

men to report transactions and arrangements as well

as payments and expenditures for activities intended

to influence or affect employees in the exercise of

rights guaranteed by the Labor Act.

(1) the name under which the labor relations consultant

is engaged in doing business and the address of its princi-

pal place of business;

(2) receipts of any kind from employers on account of

labor relations advice or services, designating the sources

thereof;

(3) disbursements of any kind, in connection with such

services and the purposes thereof; and

(4) a detailed statement of such agreement of arrange-

ment.

Provided, That nothing in this section shall be construed to

require a report from a labor relations consultant retained by

an employer by reason of his giving advice to such employer

or representing such employer in any court or administrative

agency or engaging in collective bargaining on behalf of such

employer with respect to wages, hours, or other terms or condi-

tions of employment or the negotiation of an agreement or any

question arising thereunder.

We note that it is the defendant who urged this court to rely on

statements regarding the earlier bills as relevant to the Act “Sena-

tor Kennedy’s remarks are equally applicable to the language of

Section 203 of the Act, since the reporting requirements in the

Act are virtually identical in material parts to the requirements

of the Kennedy-Ives bill . . .”). Defendant’s Memorandum in

Support at 28-29).

23a

Cong. Rec., 19033-34 (1958), reprinted in Leg. Hist.

(Labor) at 486. But no one is arguing in this case, least

of all the Secretary, with the contention that persuasion

is the principal evil addressed by the statute. The ques-

tion here is the scope of the reporting obligation incurred

by one who has engaged in persuader activity. Senator

Kennedy’s remarks simply do not address that issue.

The defendant also relies on a statement by Senator

Goldwater as one of the Senate conferees that § 203 re

quires “a report from an employer and labor relations

consultant of any agreement or arrangement whereby the

labor relations consultant undertakes activities to per-

suade employees in the exercise of their rights.” De-

fendant’s Answering Memorandum at 29. But defendant

fails to include Sen. Goldwater’s description of the content

of the report once the duty is incurred:

First. File a report with the Secretary within 30

days of entering into the agreement or arrangement

giving all details concern it.

Second. File annually with the Secretary for the

preceeding fiscal year if he received any payments

pursuant to an agreement or arrangement, a report

seting forth all receipts from all employers, and the

sources thereof, on account of labor relations advice

or services, as well as any disbursements and their

purposes in connection with such services,....

Leg. Hist. (Labor) at 624.°

This interpretation is consistent with the House con-

ferees statement that § 203(c) “grants a broad exemption

rad

® We rely, once again, on defendant’s brief for an explanation of

Senator Goldwater’s role in the legislation. Defendant’s Answer-

ing Memorandum at 27. While Senator Goldwater was originally an

opponent of the bill, he was a member of the conference committee

and supported the bill as it emerged from the conference and ulti-

mately became law.

24a

from the requirements of the section with respect to the

giving of advice.” Conf. Rep. 1147, 86th Cong., Ist Sess.,

reprinted in [1959] U.S. Code & Admin. News, at 2505.

Given the Congressional findings regarding the propen-

sity of management middlemen to engage in or encour-

age unfair labor practices, Congress might have sought to

require disclosure of the existence of employer-consultant

relationships even where the consultant refrained alto-

gether from persuader activity. Instead, Congress did

grant a broad exemption, one given its full scope by our

interpretation: any consultant or attorney who “confines

himself” to giving advice or the representative functions

listed incures no obligation to report. The numerous re-

ports on various versions of the Senate bill ultimately

passed by the Congress indicate that the exemption was

designed to accomodate those who have nothing to do

with attempts to persuade employees in the exercise of

their $7 rights. See S. Rep. 187, supra at 2356-57. We

agree with the courts in Douglas and Price that once a

consultant, such as Master Printers Association, engages

in persuasion of employees, they trigger the obligation

to report all labor relations advice rendered in that re-

porting year.

III

The defendant next argues that the Act, if so con-

strued, violates the first amendment rights of the As-

sociation and its members. As indicated earlier, the As-

sociation was formed, in part, to promote its members’

belief in “open” shops. It assists member-employers in

the conduct of their labor relations activities. Defendant

correctly points out that Congress has specifically pro-

vided, and the Supreme Court has held, that employer

speech in the labor relations field is protected under the

Constitution. See § 8(c) of the NLRA, 29 U.S.C. § 158

(ec); NLRB v. Gissel Packing Co., 395 U.S. 595 (1969).

The Act, however, does not prohibit any speech by

either employers or labor relations consultants. Rather

25a

it compels disclosure of the financial data and clients of

those who engage in a certain type of activity. We recog-

nize that it is well settled that compelled disclosure has

the potential to infringe upon first amendment freedoms.

See e.g. Gibson Vv. Florida Legislative Investigation Com-

mission, 373 U.S. 539 (1963); Louisiana v. NAACP, 366

U.S. 293 (1961); Bates v. Little Rock, 361 U.S. 516

(1960); NAACP v. Alabama, 357 U.S. 449 (1958). It

is equally well settled that disclosure requirements are

permissible provided that the chill placed on a person’s

first amendment rights is justified by a sufficient purpose

behind the legislation. California Medical Ass’n v. FEC,

101 S. Ct. 2712 (1981); Buckley v. Valeo, 424 U.S. 1

(1975) (per curiam) ; United States v. Harriss, 347 U.S.

612 (1954).

The standard for examining disclosure requirements

against first amendment attack was set out and discussed

at length in Buckley v. Valeo, where the Court upheld the

reporting and disclosure provision of the Federal Elec-

tion Commission Act of 1971, 2 U.S.C. § 431 et seq.

(1976) .%°

Since NAACP vy. Alabama we have required that the

subordinating interests of the State must survive ex-

acting scrutiny. We also have insisted that there be

a “relevant correlation” or “substantial relation” be-

tween the governmental interest and the information

required to be disclosed [citations omitted]. This

type of scrutiny is necessary even if any deterrent

effect on the exercise of First Amendment rights

arises, not through direct government action, but

indirectly as an unintended hut inevitable result of

the government’s conduct in requiring disclosure.

424 U.S. at 64-65.

10The FEC requires reporting of any campaign contribution

over $10, with additional information for contributions over $100,

2 U.S.C. §482(c), (d), accompanied by public disclosure of all

reported information. 2 U.S.C. § 488(a) (4).

26a

Defendant contends that both it and its members will

be chilled in the exercise of their first amendment rights

if forced to disclose the existence of their employer-

consultant relationship. Defendant asserts that employers

who do not use persuader services are discouraged from

associating with those who do because they fear “public

opprobrium” resulting from organized labor’s campaign

to “vilify” management consultants. They also fear that

reliance on advice from a consultant might become an

issue in collective bargaining and employee relations.

Finally, defendant argues that the Association itself is

chilled because the threat of compelled disclosure of all

clients who receive advice, given their clients’ desire to

keep their relationship private, keeps them from engag-

ing in any direct contact with employees. Defendant’s

Closing Memorandum at 22-24. As proof of the reason-

ableness of these fears defendant points to the affidavit

of its past executive director attesting to the fact that

since the Secretary’s order of disclosure the Association

has refrained from all persuader activity. Lingren Aff.

7 12.

We are somewhat skeptical of the ‘fears’ claimed by

the defendant.'' but even accepting their allegations as

true, we do not believe they make out a claim under the

first amendment. The Court in Buckley, held,

we have acknowledged that there are governmental

interests sufficiently important to outweigh the pos-

1! The allegations of chill here, while they are not inconsequential,

fall far short of the sort of threat of physical harm and loss of

employment found in NAACP v. Alabama and its progeny. At most

what defendant has alleged is that its members fear criticism of

their business practice of dealing with a labor relations consultant

and possible economic harm (though they have not indicated its

source) in the conduct of their labor relations. We do not fore-

close the possibility that on different facts, with an alleged chill of

greater magnitude, the statutory disclosure requirement might

have to give way to the first amendment interest. See Buckley v.

Valeo, 424 U.S. at 69-72.

27a

sibility of infringement, particularly when the “free

functioning of our political institutions” is involved.

[citation omitted].

The governmental interest sought to be vindicated

by the disclosure requirements are of this magnitude.

424 U.S. at 66. As in Buckley, the governmental interests

advanced by the reporting and disclosure provisions of the

LMRDA are sufficient to justify any of the chilling effects

alleged by the defendants.

We deal here with the unique and pervasively regulated

area of labor relations law. Congress has set out one of

the most detailed legislative and administrative frame-

works in our history to promote the free flow of commerce

and replace the economic warfare of the nineteenth cen-

tury with a system designed to encourage industrial peace.

The Supreme Court has recognized that even first amend-

ment rights may be required to yield to the special needs

of the labor relations field:

Any assessment of the precise scope of employer

expression, of course, must be made in the context of

its labor relations setting. Thus, an employer’s rights

cannot outweigh the equal rights of the employees to

associate freely, .... And any balancing of those

rights must take into account the economic depend-

ence of the employees on their employers, and the

necessary tendency of the former, because of that

relationship, to pick up intended implications of the

latter that might be more readily dismissed by a

more disinterested ear. Stating these obvious princi-

ples is but another way of recognizing that what is

basically at stake is the establishment of a non-

permanent, limited relationship between the employer,

his economically dependent employee and his union

agent, not the election of legislators or the enactment

of legislation. . .

28a

NLRB vV. Gissel Packing Co., 395 U.S. at 618-19. The

Court has permitted restrictions even on the content of

employer speech by classifying as an unfair labor practice

statements outside the scope of well drawn boundaries.

Gissel, at 618-19; J.P. Stevens & Co. v. NLRB, 638 F.2d

676, 686 (4th Cir. 1980); Chromalloy Mining and Min-

erals v. NLRB, 620 F.2d 1120, 1124 (5th Cir. 1980) ;

Nebraska Bulk Transport, Inc. v. NLRB, 608 F.2d 311,

314 (8th Cir. 1979); NLRB v. Gogin, 575 F.2d 596, 600

(7th Cir. 1978).

In a labor setting “the Court has concluded that an

employer’s freedom to communicate his views to his em-

ployees may be restricted by the requirement that any

predictions ‘be carefully phrased on the basis of objective

fact’”’ even though “[{s]uch restrictions would clearly vio-

late First Amendment guarantees if applied to political

expression concerning the election of candidates for public

office.” Virginia State Board of Pharmacy v. Virginia

Citizens Consumer Council, 425 U.S. 748, 778 (1978)

(Stewart, J., concurring). Clearly, the context of the

regulation sets the framework for our first amendment

analysis. Id. See also Ohralik v. Ohio State Bar Ass’n,

436 U.S. 447, 456 (1978).

The reporting and disclosure provisions of the LMRDA

are supported by extensive findings of the danger posed

by middlemen in the labor relations field. In its declara-

tion of findings, purposes and policy, made part of the

statute, Congress stated:

The Congress further finds, from recent investi-

gations in the labor and management fields, that

there have been a number of instances of breach of

trust, corruption, disregard of the rights of individual

employees, and other failures to observe high stand-

ards of responsibility and ethical conduct which re-

quire further and supplementary legislation that will

afford necessary protection of the rights and interests

29a

of employees and the public generally as they relate

to the activities of labor organizations, employers,

labor relations consultants, and their officers and

representatives.

§ 2(b), 29 U.S.C. § 401(b).

The record is replete with evidence that Congress be-

lieved that “union busting’? management middlemen were

working with employers to undermine employees in their

attempt to exercise their § 7 rights. Those activities in-

clude direct employee contact, spending large sums of

money behind the scenes or through committees to dis-

tribute distorted information, setting up company domi-

nated unions, and other practices that Congress felt were

unethical if not illegal. S. Rep. 187, supra. See also,

Cong. Rec. 11374-77, 86th Cong., lst Sess. (1959), re-

printed in Leg. Hist. (Labor) at 561-63. The Senate

Committee concluded:

All of the activities required to be reported by this

section are not illegal nor are they unfair labor prac-

tices. However, since most of them are disruptive of

harmonious labor relations and fall into a gray area,

the committee believes that if an employer or a con-

sultant indulges in them, they should be reported.

S. Rep. at 187, supra at 2328. Thus, it appears thet the

committee was mindful of the advice of Mr. Justice

Brandeis, recalled by the Court in Buckley,

Publicity is justly commended as a remedy for

social and industrial diseases. Sunlight is said to be

the best of disinfectants; electric light the most

efficienct policeman.

424 U.S. at 67, quoting L. Brandeis, Other People’s

Money 72 (1933).

The fact that persuader contact and advice is not

itself illegal is not dispositive. What counts is that Con-

gress found a strong connection between corruption in

30a

the labor field and the activities of management per-

suaders. Similarly in Buckley a vast majority of cam-

paign contributions have absolutely no corrupting in-

fluence on the political process, yet the Court permitted

compelled disclosure of practically all campaign contribu-

tions because “disclosure requirements deter actual cor-

ruption and avoid the appearance of corruption by expos-

ing large contributors and expenditures to the light of

publicity.” 424 U.S. at 67. Moreover, disclosure serves

the purpose of letting the voters know where their in-

formation comes from, and last, but “not least significant,

record keeping, reporting and disclosure requirements are

an essential means of gathering the data necessary to

detect violations of the contribution limitations described

above.” Jd, at 67-68.

We find that justifications for the disclosure require-

ments in the LMRDA remarkably similar to those of the

Federal Election Commission Act discussed in Buckley.

The disclosure permits employees in a labor setting, like

voters in an election, to understand cine sources of the in-

formation being distributed. See also §§ 201, 202, 29

U.S.C. §§ 431, 432 (requiring extensive reporting from

labor organizations and their officers). The annual report

serves as a crosscheck on the accuracy of the 30 day

reports and serves to notify the Secretary of relationships

between a persuader and employer which may give rise

to a duty to file a 30 day report. More importantly, as we

have outlined above, Congress viewed management per-

suaders as inherently suspect and their activities subject

to abuse in an extremely sensitive field. Disclosure is

therefore justified as a means of discouraging potential

abuse where there is a demonstrated propensity for such

abuse. See United States v. Harriss, 347 U.S. 612 (1954) ;

Marshall v. Stevens People and Friends for Freedom,

— F.2d ——, 108 LRRM 2024 (4th Cir. 1981).

12 Our judgment is entirely consistent with the Fourth Circuit's

opinion in Marshall v. Stevens People and Friends for Freedom,

8la

Finally, it must be remembered that the evil Congress

was addressing was not “persuasion” in and of itself,

but the tendency of persuaders to engage in unfair labor

practices. Thus, the Act would be less than effective if

it permitted the targets of the publicity to be entirely

free from public scrutiny where they are able to couch

their function as “advice” rather than persuasion. As the

Fifth Circuit recognized in Price:

The legislative judgment that one who engages in the

persuader business must be subjected to the pressure

of revealing publicity is amply justified by the diffi-

culty in distinguishing between those activities that

are persuader activities and those that are not, and

by the opportunity for misleading concealment of the

true nature of such [persuader’s] work in situations

involving intricate corporate conglomerate associates

or, equally pressing, industry wide labor contro-

versies,

412 F.2d at 650.

The Association contends, relying principally on Fa-

milias Unidas v. Briscoe, 619 F.2d 391 (5th Cir. 1980),

that while these purposes may justify disclosure of the

employers who use persuader services, the Act is un-

constitutionally overbroad insofar as it requires report-

where the court engaged in a similar inquiry and upheld the

subpoena power of the Secretary under the same act against first

amendment attack. See § 601, 29 U.S.C. § 521. The Fourth Circuit

found the broad subpoena power justified by a substantial and well

founded Congressional concern with abuse in the labor field suffi-

cient to outweigh the associational claims of the non-employee

defendants. /d. at 2029-30. The interests advanced by the Secre-

tary “are substantially related to the information that he seeks.”

Id. We find the same is true of the disclosure requirement. The

court did not allow use of the subpoena power, however, to obtain

lists of the non-supervisory employees working at J.P. Stevens

who organized in opposition to the union. As to them, the court

found no governmental interest in disclosure because the statute

by its very terms maintains protection for employees to exercise

their section 7 rights—including organizing against a union. Z/d.

at 2029.

82a

ing of employers who receive only advice. In Familias

Unidas the Fifth Circuit struck down a statute requiring

disclosure of all members of any organization encouraging

interference with the peaceful operation of the public

schools. 619 F.2d at 394. The court found the statute

overbroad because “the mere presence of an individual’s

name on an organization’s membership rolls is insufficient

to impute to him the organization’s illegal goals.” Jd. at

401, quoting United States v. Robel, 389 U.S. 258, 266

n.16 (1967). With respect to people without knowledge

of the organization’s illegal activity “disclosure bears no

relationship at all to the state interest in deterring school

disruption.” Jd. at 401.

Defendant’s reliance on Familias Unidas is misplaced.

The Texas statute in question there contained no legisla-

tive history; the court assumed its sole rationale was that

[bly raising the spectre of public scrutiny and

opprobrium for individuals supporting organizations

engaged in disruptive activities, section 4.28 is in-

tended to deter participation in, active support of,

and affiliation with such groups and activities.

Id. at 400. The organizations in question were essentially

political with no past history of any illegal or suspect

activities. The court took care to distinguish its holding

from cases where the “organizations [have] a demon-

strated track record of illicit conduct...” Jd. at 401.

See Communist Party v. Subversive Activities Control

Board, 367 U.S. 1 (1961); Bryant v. Zimmerman, 278

U.S. 68 (1928). As we have outlined several times, Con-

gress believed that those who engage in persuader serv-

ices had just such a track record in the sensitive field of

labor-relations.

But more importantly, what defendant fails to recogs

nize is that this is not a membership case at all. Merely

belonging to the Association does not require reporting.

Disclosure under the LMRDA is only triggered by a

specific relationship—some type of labor relations con-

33a

tact—with an organization engaged in a suspect activity.

By focusing on the employer who receives only advice and

no persuader services, defendant has sought to deflect us

from the proper subject of the inquiry—the persuader.

There are two parties in every agreement which must be

disclosed under § 203. While Congress may not have

demonstrated a legitimate concern with the employers

receiving only advice, it did demonstrate substantial

justification for keeping an eye on those who engage in

persuader activity—here the Association itself. Thus,

unlike the statute in Familias Unidas, the scope of the

reporting requirement in the Act is tailored to meet a

concern articulated by Congress and supported by a com-

pelling state interest. See California Medical Ass’n, 101

S. Ct. at 2722-23 n.20.

Finally, the defendant argues vigorously that it does

not engage in unfair labor practices or any of the other

persuader activities Congress thought were undermining

national labor policy; that it is, in short, a good guy:

The Association has merely promoted its members’

common belief in the value of open shops in the print-

ing industry. It has informed its members of new

technological, legislative and political developments

affecting the printing industry; it has advised its

members of good management practices that will

prevent employee dissatisfaction and inefficiency; it

has sponsored employee benefits competitive with

those available through union representation. All of

these efforts promote better working conditions and

industrial peace.... Yet merely because the Associ-

ation assisted three members by speaking on their

behalf directly to their employees, without violating

the law or urging others to violate the law, the Secre-

tary now seeks to class the Association with the

traditional “union busters”...

Defendant’s Closing Memorandum at 5.

84a

We express no opinion as to defendant’s particular

labor relations practices. The record before us does not

contain information on how defendant advises its clients,

nor does that concern us. Regardless of the Association’s

business ethics, we are not free to substitute our judg-

ment for the clear expression of Congressiona] intent.

Congress deemed the management middleman who en-

gages in persuasion of employees as inherently suspect;

that judgment is supperted by adequate findings and

operates in a sensitive area of great national] interest.

The Association fits the Congressional definition of a per-

suader and it must therefore comply with the Secretary’s

order and submit the required information.

Defendant urges three other grounds in challenging

the statute and the Secretary’s order. While we have con-

sidered these arguments at length, we deal with them

somewhat summarily.

The Association contends that the statute is so vague

that it violates the due process clause of the fifth amend-

ment. It suffices to say that the Act is only vague be-

cause defendant chooses to make it so. The opinion of the

Fourth Circuit in Douglas and the Fifth Circuit in Price

have stood without any change by Congress in the statute

since 1965. While we admit that the structure and

language of the Act are not a model in legislative draft-

ing, the consistent construction by the courts leaves little

doubt as to the proper interpretation of the Act.** See

13 Defendant argues that neither the courts nor the Secretary

have maintained a consistent interpretation of the statute and cite

as authority a decision by the District Court for the Eastern Dis-

trict of Virginia in Donovan v. Master Printers Association, No. 80-

1040A (E.D. Va. April 15, 1981). Once again, defendant’s reliance

is misplaced. At issue in that case was the entirely separate ques-

tion of whether the defendant engaged in any persuader activity,

not the scope of the duty to report once persuader activity is en-

35a

Grayned v. City of Rockford, 408 U.S. 104, 109-10

(1972); United States v. Harris, supra; United States v.

Heilmen, 614 F.2d 1133, 1136-38 (7th Cir. 1980) ; Amato

v. Divine, 558 F.2d 364, 365 (7th Cir. 1977) ; Sheehan v.

Scott, 520 F.2d 825, 829 (7th Cir. 1975).

The Association also argues that the reporting require-

ments constitute an unreasonable search and seizure in

violation of the fourth amendment. It makes the point

that reporting and disclosure requirements can violate the

fourth amendment if they amount to an unreasonable in-

vasion of privacy and are unrelated to any permissible

state interest. See California Bankers Association Vv.

Schultz, 416 U.S. 21 (1974); United States v. Morton

Salt Co., 338 U.S. 6382 (1950).

While commercial enterprises benefit from the protec-

tion of the fourth amendment, see Marshall v. Barlow’s,

Ine., 486 U.S. 307 (1978); Camara v. Municipal Court,

387 U.S. 523 (1967), the privacy interest asserted by the

defendant is significantly diminished where, as here, we

deal with businesses engaged in operation for profit.’*

gaged in. The court held that “under the facts of this case MPA,

as distinguished from the employers involved, is not undertaking

activities which have as an object persuasion of employees.” Id.

at 1. The court found that all of the activities at issue in that case

constituted advice.

Further, the policy of the Department of Labor cited by the

court deals with defining the difference between advice and per-

suasion—not the question of what are the reporting obligations of

a persuader. Id. at 4. We express no opinion as to whether we

agree with the Virginia court on the issue of what constitutes per-

suasion because that question is not before us.

14 We note that in certain pervasively regulated industries,

where the governmental interest is especially strong and long

standing, no showing of probable cause is necessary before a physi-

cal search is conducted. Donovan v. Dewey, 101 S.Ct. 2534 (1981) ;

United States v. Biswell, 406 U.S. 311 (1972); Colonnade Catering

Corp. v. United States, 397 U.S. 72 (1970). Moreover, even where

the fourth amendment applies, all the government need show to

36a

The Court has recognized that in a disclosure setting

“neither incorporated nor unincorporated associations can

plead an unqualified right to conduct their affairs in

secret.” California Bankers Association, at 66-67 quoting

Morton Salt, at 652. The fourth amendment simply re-

quires that the reporting scheme imposed by the statute

bear a reasonable relationship to a permissible subject of

governmental inquiry and not place an undue burden on

the defendant. Jd.

It is unnecessary for us to engage in a protracted dis-

cussion of the difficult question of whether § 203 amounts

to a search and seizure because, as our discussion of the

statute and first amendment indicates, there is nothing

“unreasonable” about the reporting and disclosure of this

Act. California Bankers Association at 67-70.%

Finally, defendant argues that the government should

be estopped from requesting further reports in this case.

The estoppel argument is based on a letter from the De-

partment of Labor to the defendant dated June 9, 1978.**

obtain a warrant is that the search is in accord with a reasonable

administrative plan in conformity with statutory authority; far

less than the traditional probable cause standard. See Marshall

v. Barlow’s, Inc., 436 U.S. at 320-21.

16 Defendant bases its argument on the same grounds as its first

amendment attack: that the scope of the disclosure requirements

bears no relationship to any legitimate state purpose. Defendant’s

Closing Memorandum at 28-32. Since we have discussed the reason-

ableness of the reporting requirement at length in our discussion of

the first amendment, we do not repeat it here.

16 The letter relied on by defendant refers to discussions between

the Associations’s Executive Director and a Department of Labor

“Compliance Officer” and describes the contact between the Associ-

ation and employees on three occasions. The letter states in rele

vant part:

You are therefor required to file an LM-20 Agreement and

Activities Report for each of the three above-named Companies,

37a

Defendant argues that the letter constitutes a settlement

upon which defendant detrimentally relied in filing the 30

day report for the three employers who received persuader

services. At this point we adopt the recent statement of

Judge Bauer that “[wle tire of arguments of expediency

addressed to us under the guise of principle.” Gibbons v.

United States, Slip Op. No. 80-1786 at 8 (7th Cir., Aug.

26, 1981).

While it is no longer true that the government can

never be estopped, the “doctrine of estoppel must be ap-

plied with great caution to the government and its offi-

cials.” United States v. Gross, 451 F.2d 1855, 13858 (7th

Cir. 1971). See also Champaign County v. United States,

611 F.2d 1200, 1205 n. 8 (7th Cir. 1979). This is par-

ticularly true where the estoppel would prevent the effec-

tuation of Congressional intent by altering the meaning

of a statute. In such a situation estoppel will only be

applied on proof of affirmative misconduct on the part of

the government causing severe injury to the party affected.

See Leimbach v. Califano, 596 F.2d 300 (8th Cir. 1979) ;

California Pacific Bank v. SBA, 557 F.2d 218 (9th Cir.

1977); Santigo v. INS, 526 F.2d 488 (9th Cir.), cert.

denied 425 U.S. 971 (1975); cf. United States Immigra-

tion & Naturalization Service v. Hibi, 414 U.S. 5 (19738).

In the case at bar we find neither the affirmative mis-

conduct nor the type of injury to the defendant required

in order for an estoppel to apply. There is no indication

in the letter from the Department to the defendant, nor

any other evidence presented to this court, that the parties

entered into a settlement of the question being litigated

along with LM-21 Receipts and Disbursements Reports for

each, for respective meetings in 1976.

In view of the fact that these reports were actually due some

time ago, we anticipate receiving them no later than thirty

days following your receipt of this letter. In this connection

your attention is directed to Sections (sic) 210 of the Act,

as (sic) copy of which is enclosed.

38a

here. At most the letter could lead defendant to believe

its interpretation of the requirements of the Act was

correct, despite the holding of the Fourth and Fifth Cir-

cuits to the contrary.’’ However, a statement by an em-

ployee of a government agency contrary to applicable law

cannot operate to bar a correct interpretation of the law

except in the most egregious circumstances. See. e.g.,

Leimbach v. Califano; Simon v. Califano, 598 F.2d 121

(9th Cir. 1979); Goldberg v. Weinberger, 546 F.2d 477

(2d Cir. 1976), cert. denied, 481 U.S. 987 (1977).

Here we find no harm to the defendant resulting from

the letter. Defendant has admitted that there is a legal

duty to report instances of persuader activity. Yet it

argues now that it was prejudiced by the government’s

action because it filed a report that was restricted to

persuader activity. We find no such prejudice. The letter

did not hinder defendant in its ability to respond and

litigate the scope of the reporting requirements of the

Act, nor did it disclose any material other than that to

which the government is entitled. This might be a differ-

ent case were the Secretary seeking sanctions against the

defendant for its failure to file prior to the corrected

17 We note that this is not a case where the defendant has

alleged arbitrary and discriminatory enforcement on the part of

the government. Defendant’s claim is based solely on the communi-

cation by a government employee. Our analysis would be different

if defendant had proffered evidence of a discriminatory pattern of

enforcement or an agency abuse of discretion in violation of a

Congressional scheme. See e.g., Dunlop v. Bachowski, 421 U.S.

560 (1975); Yick Wo v. Hopkins, 118 U.S. 356 (1886).

18The evidence presented by defendant shows that it waited

one full year before producing the reports requested in the June 9,

1980 letter quoted in note 16. We have examined the forms filed and

note that they are one page in length and hardly appear that they

would require twelve months to complete. In light of defendant’s

year long delay in submitting the reports it agreed to send, we

hardly think defendant is in a position to appeal to our notion of

“equity” and argue the “bad faith” of the government. See

Defendant’s Exhibits A-C.

39a

notification sent by the Department.” As it stands now,

the only consequence of the June 8, 1978 communication

is that the Association filed the required reports for its

persuader clients. It did not, nor has it to this day,

filed the required reports for its “advice only” clients.

In these circumstances there is no justification for estop-

ping the government from seeking a proper interpreta-

tion of the Act and effectuating what Congress believed

to be the public interest.

For the foregoing reasons the Secretary of Labor’s

motion for summary judgment is granted and the Master

Printers Association’s motion for summary judgment is

denied. Defendant is ordered to comply with the Secre

tary’s request to produce the required LM-21 form within

30 days.

ENTER:

/s/ [Mlegible]

United States District Judge

Dated: December 10, 1981.

1%In contrast to the defendant’s delay, the Secretary notified

MPA by letter of the need to supplement its report on July 29,

1981, about six weeks after the incomplete reports were filed. To

our knowledge, no action, other than this suit to compel compliance

with the statute, has been taken against defendant.

40a

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

May 12, 1983

Before

Hon. WALTER J. CUMMINGS, Chief Judge

Hon. WILBUR F. PELL, JR., Circuit Judge

Hon. WILLIAM J. BAUER, Circuit Judge

Hon. HARLINGTON Woop, JR., Circuit Judge

Hon. RICHARD D. CUDAHY, Circuit Judge

HON. JESSE E. ESCHBACH, Circuit Judge

Hon. RICHARD A. POSNER, Circuit Judge

Hon. JOHN L. Correy, Circuit Judge

No. 82-1459

RAYMOND J. DONOVAN, Secretary of Labor,

United States Department of Labor,

Plaintiff-A ppellee,

vs.

MASTER PRINTERS ASSOCIATION, a division of

Printing Industry of Illinois Association,

Defendant-A ppellant.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division

No. 80 C 1768—Prentice H. Marshall, Judge

4la

ORDER

On consideration of the petition for rehearing and sug-

gestion for rehearing en banc filed in the above-entitled

cause by Defendant-Appellant Master Printers Associa-

tion, a vote of the active members of the court was re-

quested, and a majority of the active members of the

court * have voted to deny a rehearing en banc. A ma-

jority of the judges on the original panel ** have voted

to deny the petition for rehearing. Accordingly,

It is ordered that the aforesaid petition for rehearing

be, and the same is hereby, DENIED.

* The Honorable Wilbur F. Pell, Jr., and the Honorable Harling-

ton Wood, Jr., voted to grant a rehearing en banc.

**The original panel consisted of Judges Pell, Bauer, and

William H. Timbers, Senior Judge of the United States Court of

Appeals for the Second Circuit, who sat by designation. Judge

Pell voted to grant a rehearing. Judge Timbers did not participate

in the consideration of the suggestion for rehearing en banc.

42a

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

| EASTERN DIVISION

Civil Action No.

RAY MARSHALL, Secretary of Labor,

United States Department of Labor,

Plaintiff,

MASTER PRINTERS ASSOCIATION, A DIVISION OF

PRINTING INDUSTRY OF ILLINOIS ASSOCIATION,

Defendant.

COMPLAINT

Plaintiff brings this action under Title II of the Labor-

Management Reporting and Disclosure Act of 1959 (Act

of September 14, 1959, 73 Stat. 519 et seqg., 29 U.S.C.

401 et seq., hereinafter referred to as the Act.

Jurisdiction of this action is conferred upon the Court

by section 210 of the Act (29 U.S.C. 440).

III

Defendant is, and at all times relevant to this action

has been, a division of the Printing Industry of Illinois,

an unincorporated trade association with its principal of-

fice located at 20 East Ontario Street, in the City of

Chicago, County of Cook, State of Illinois, within the

jurisdiction of this Court.

43a

Defendant is, and at all times relevant to this action

has been, an association of employers engaged in an in-

dustry affecting commerce within the meaning of sections

8(e) and 203(a) of the Act (29 U.S.C. 402(e), and

433(a), and is a person within the meaning of section

3(d) of the Act (29 U.S.C. 402(d)).

Defendant, through its Executive Director, Robert

Lindgren, pursuant to agreements and arrangements

with three of its employer-members undertook activities,

an object of which was to persuade employees to exercise

or not to exercise, or to persuade employees as to the

manner of exercising, the right to organize and bargain

collectively through representatives of their own choosing.

On July 11, 1979, pursuant to section 203(b) of the

Act (29 U.S.C. 433(b) ), defendant filed with the plaintiff:

(a) three labor relations consultant reports designated

by the Secretary of Labor as Form LM-20, Agreement

and Activities Report, signed by Robert Lindgren which

indicated that defendant had engaged in activities de-

signed to persuade employees to exercise or not to exer-

cise, or to persuade employees as to the manner of exer-

cising, the right to organize and bargain collectively

through representatives of their own choosing; and

(b) a labor relations consultant report designated by

the Secretary of Labor as Form LM-21, Receipt and Dis-

bursements Report, covering the period January 1

through December 31, 1976, which listed three employers

from whom defendant received payments in connection

with labor relations advice or services regardless of the

purposes of the advice or services.

Vill

Defendant, during the period January 1 through De-

cember 31, 1976, received payment for labor relations

44a

advice or services from employers which receipts were

not acknowledged in the aforementioned Receipts and

Disbursements Report filed with the plaintiff on July 11,

1979.

Defendant has failed and refused after requests made

by plaintiff’s officers and agents to file a corrected Re-

ceipts and Disbursements Report for the fiscal year end-

ing December 31, 1976, as required by sections 203(b)

and 207(b) of the Act (29 U.S.C. 483(b) and 487(b)

and the Rules and Regulations promulgated by the Sec-

retary of Labor pursuant to section 208 of the Act (29

U.S.C. 438) and published in 29 C.F.R. 406.

WHEREFORE, plaintiffs prays for judgment:

(a) directing and compelling defendant to file an ade-

quate and complete Receipts and Disbursements Report

for the fiscal year ending December 31, 1976, as provided

by sections 203(b) and 207(b) of the Act (29 U.S.C.

433(b) and 437(b)), and regulations promulgated by the

plaintiff pursuant to the Act;

(b) enjoining and restraining defendant from further

violating any of the provisions of sections 203(b) and

207(b) of the Act (29 U.S.C. 433(b) and 487(b) and

by future failure and refusal to file the reports required

to be filed with the Secretary of Labor by said sections

of the Act;

(d) for such other relief as may be appropriate.

Respectfully submitted,

THOMAS P. SULLIVAN

United States Attorney

By:

MICHAEL 8. O’CONNELL

Assistant United States Attorney

45a

STATE OF ILLINOIS )

COUNTY OF Cook )

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Judge Prentice H. Marshall

Civil Action No. 80 C 1768

RAY MARSHALL, Secretary of Labor,

United Staves Department of Labor,

Plaintiff,

Vv.

MASTER PRINTERS ASSOCIATION, A Division of

Printing Industry of Illinois, Association,

Defendant.

AFFIDAVIT OF ROBERT LINDGREN

I Robert Lindgren, being first duly sworn, depose and

state as follows:

1. I am the General Manager of the Printing Industry

of Illinois/Indiana Association. I have held that position

since or or about September 1979.

2. From approximately January 1979 to September

1979 I was the Executive Director of Master Printers

Association (“the Association”), the defendant in the

above-captioned case. I am thoreughly familiar with the

activities of the Association during that period and up to

the present date.

46a

3. The Master Printers Association is an association

of employers in the printing industry. None of the Associ-

ation’s members have collective bargaining agreements

with any union. The purpose of the Association is to pro-

tect and further the members’ shared belief that pro-

gressive open shops provide the greatest opportunity for

employers to create new and better graphic arts products

and services for their customers ard to promote the most

satisfying and rewarding working life for their employees.

4. In furtherance of these common goals, the Associa-

tion, for many years, has provided a variety of services

to its members. The Association has conducted meetings,

distributed literature and engaged in counselling indi-

vidual members designed to inform and advise member

employers concerning trends in technology, good and pro-

gressive open shop labor relations, and wages, benefits

and working conditions in the printing industry. The

Association has also developed and sponsored an employee

credit union, and group employee benefit programs for

health and welfare insurance and dental care. These

group plans are intended to permit members to offer

their employees fringe benefits which are competitive with

benefits available in union shops in the local printing in-

dustry. In addition, as a continuous service to its mem-

bers, the Association advises its members of recent statu-

tory, regulatory and interpretive developments in the

areas of environmental protection, occupational safety and

health, minimum wage and overtime, child labor and equal

employment opportunity.

5. The Association is a division of a non-profit or-

ganization, exempt from taxation under Section 501 of the

Internal Revenue Code. The only income the Association

receives is the annual dues paid by its members. The

amount of dues is determined on a sliding scale based

solely on the size of the employer, and does not depend on

the degree of an employer’s participation in any particular

educational or industry-promotional program. Although

47a

Association members pay contributions or premiums to

group benefit plans if they elect to cover their employees

under these plans, these contributions and premiums are

used solely to provide health, welfare and dental care

benefits under the plans and do not go into the operating

funds of the Association, except in the form of direct

reimbursement for the expenses of operating the plans.

6. In Autumn 1976, I made three speeches to members’

employees, in the course of my duties as Executive Di-

rector. In each of the three instances, a member employer

approached the Association and specifically requested that

I speak to the member’s employees concerning their rights

to organize or to refrain from organizing for collective

bargaining. In each case, the employer determined the

content of and approved my talk in advance. In each

case, I gave a single talk to the employer’s assembled em-

ployees. The Association and I received no separate pay-

ment or fee for giving these talks.

7. On April 4, 1978, I attended a meeting with a De-

partment of Labor Compliance Officer, the Association’s

attorney and another Department official whose identity

is not known. At this meeting, the Department investi-

gated the nature of the Association’s activities and the

three talks in particular. Thereafter, the Compliance

Officer advised the Association’s attorney by telephone

that the Department had determined that the three talks

were “persuader activity” and that the Association would

be required to file reports pursuant to Section 203(b) of

the Labor Management Reporting and Disclosure Act.

8. On or about June 9, 1978, I received a letter from

Gerald H. Johnson, the Acting Area Administrator for

the Chicago area office of the Labor-Management Services

Administration summarized the Department’s determina-

tion and concluded:

You are therefore required to file an LM-20 Agree-

ment and Activities Report for each of the three

48a

above-named companies, along with LM-21 Receipts

and Disbursements Reports for each, for the fiscal

year covering the dates of the respective meetings in

1976.

A copy of that letter is attached as Defendant’s Exhibit E.

9. In reliance upon this agreement, and with the under-

standing that it was fully discharging its statutory re-

porting obligations for fiscal year 1976, the Association

filed four reports: 30-day reports, one for each of the

three employers named by the Department of Labor, and.

one annual report. Pursuant to its agreement with the

Department of Labor, the Association included in its

annual report only the receipts and disbursements which

arguably could be identified with labor relations services

performed for or on behalf of the three named employers.

Copies of these reports are attached as Defendant’s

Exhibits A, B, C, and D respectively.

10. The Association filed these reports despite its

serious questions as to the validity of the Department’s

determination that the Association was required to file

under Section 203(b).

11. On or about July 26, 1979, I received a letter from

Carl Rolnick, Director of the Department’s Office of

Labor-Management Standards Enforcement in Washing-

ton, D.C. in which Mr. Rolnick advised the Association

that the submitted forms were insufficient and that the

Department would now require that the Association file

an annual report for all of its approximately 800 member

employers. A copy of this letter is attached as Defendant’s

Exhibit F.

12. On or about February 25, 1980, the Association by

its attorney, Jerry Kronenberg, acting at my direction,

sent a letter to Mr. Rolnick, reminding him of the prior

agreement and seting forth the Association’s position that

it had fully complied with the agreement to settle the

49a

matter. A copy of this letter is attached as Defendant’s

Exhibit G.

11. On or about April 10, 1980, I received from Mr.

Rolnick’s successor, Richard G. Hunsucker, a letter in

which Mr. Hunsucker responded that no settlement agree-

ment had been made, and that the Department’s June 9,

1978 letter confirming the agreement “may be technically

incorrect which we assume may have occurred due to

some clerical errors”, and “in no way can that be con-

sidered a settlement agreement between the Department

and the Association.” In this same letter, Mr. Hunsucker

advised the Association that the Department had com-

menced this action to compel the Association to file a

revised form. A copy of this letter is attached as De-

fendant’s Exhibit H.

12. Ever since the Association learned in 1977 or

1978 that the Department interpreted Section 203(b) to

require the disclosure of the Association’s membership

lists, the Association, at my direction, has scrupulously

refrained in engaging in speeches to employees or any

activity that might arguably constitute persuader activity

within the meaning of Section 203(b) (1).

FURTHER AFFIANT SAYETH NOT.

/s/ Robert Lindgren

ROBERT LINDGREN

Subscribed and sworn to before me this 3rd day of

February, 1981

/s/ [Illegible]

Notary Public

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.