§ 186. — Restrictions on financial transactions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 29USC186]
TITLE 29--LABOR
CHAPTER 7--LABOR-MANAGEMENT RELATIONS
SUBCHAPTER IV--LIABILITIES OF AND RESTRICTIONS ON LABOR AND MANAGEMENT
Sec. 186. Restrictions on financial transactions
(a) Payment or lending, etc., of money by employer or agent to
employees, representatives, or labor organizations
It shall be unlawful for any employer or association of employers or
any person who acts as a labor relations expert, adviser, or consultant
to an employer or who acts in the interest of an employer to pay, lend,
or deliver, or agree to pay, lend, or deliver, any money or other thing
of value--
(1) to any representative of any of his employees who are
employed in an industry affecting commerce; or
(2) to any labor organization, or any officer or employee
thereof, which represents, seeks to represent, or would admit to
membership, any of the employees of such employer who are employed
in an industry affecting commerce; or
(3) to any employee or group or committee of employees of such
employer employed in an industry affecting commerce in excess of
their normal compensation for the purpose of causing such employee
or group or committee directly or indirectly to influence any other
employees in the exercise of the right to organize and bargain
collectively through representatives of their own choosing; or
(4) to any officer or employee of a labor organization engaged
in an industry affecting commerce with intent to influence him in
respect to any of his actions, decisions, or duties as a
representative of employees or as such officer or employee of such
labor organization.
(b) Request, demand, etc., for money or other thing of value
(1) It shall be unlawful for any person to request, demand, receive,
or accept, or agree to receive or accept, any payment, loan, or delivery
of any money or other thing of value prohibited by subsection (a) of
this section.
(2) It shall be unlawful for any labor organization, or for any
person acting as an officer, agent, representative, or employee of such
labor organization, to demand or accept from the operator of any motor
vehicle (as defined in section 13102 of title 49) employed in the
transportation of property in commerce, or the employer of any such
operator, any money or other thing of value payable to such organization
or to an officer, agent, representative or employee thereof as a fee or
charge for the unloading, or in connection with the unloading, of the
cargo of such vehicle: Provided, That nothing in this paragraph shall be
construed to make unlawful any payment by an employer to any of his
employees as compensation for their services as employees.
(c) Exceptions
The provisions of this section shall not be applicable (1) in
respect to any money or other thing of value payable by an employer to
any of his employees whose established duties include acting openly for
such employer in matters of labor relations or personnel administration
or to any representative of his employees, or to any officer or employee
of a labor organization, who is also an employee or former employee of
such employer, as compensation for, or by reason of, his service as an
employee of such employer; (2) with respect to the payment or delivery
of any money or other thing of value in satisfaction of a judgment of
any court or a decision or award of an arbitrator or impartial chairman
or in compromise, adjustment, settlement, or release of any claim,
complaint, grievance, or dispute in the absence of fraud or duress; (3)
with respect to the sale or purchase of an article or commodity at the
prevailing market price in the regular course of business; (4) with
respect to money deducted from the wages of employees in payment of
membership dues in a labor organization: Provided, That the employer has
received from each employee, on whose account such deductions are made,
a written assignment which shall not be irrevocable for a period of more
than one year, or beyond the termination date of the applicable
collective agreement, whichever occurs sooner; (5) with respect to money
or other thing of value paid to a trust fund established by such
representative, for the sole and exclusive benefit of the employees of
such employer, and their families and dependents (or of such employees,
families, and dependents jointly with the employees of other employers
making similar payments, and their families and dependents): Provided,
That (A) such payments are held in trust for the purpose of paying,
either from principal or income or both, for the benefit of employees,
their families and dependents, for medical or hospital care, pensions on
retirement or death of employees, compensation for injuries or illness
resulting from occupational activity or insurance to provide any of the
foregoing, or unemployment benefits or life insurance, disability and
sickness insurance, or accident insurance; (B) the detailed basis on
which such payments are to be made is specified in a written agreement
with the employer, and employees and employers are equally represented
in the administration of such fund, together with such neutral persons
as the representatives of the employers and the representatives of
employees may agree upon and in the event the employer and employee
groups deadlock on the administration of such fund and there are no
neutral persons empowered to break such deadlock, such agreement
provides that the two groups shall agree on an impartial umpire to
decide such dispute, or in event of their failure to agree within a
reasonable length of time, an impartial umpire to decide such dispute
shall, on petition of either group, be appointed by the district court
of the United States for the district where the trust fund has its
principal office, and shall also contain provisions for an annual audit
of the trust fund, a statement of the results of which shall be
available for inspection by interested persons at the principal office
of the trust fund and at such other places as may be designated in such
written agreement; and (C) such payments as are intended to be used for
the purpose of providing pensions or annuities for employees are made to
a separate trust which provides that the funds held therein cannot be
used for any purpose other than paying such pensions or annuities; (6)
with respect to money or other thing of value paid by any employer to a
trust fund established by such representative for the purpose of pooled
vacation, holiday, severance or similar benefits, or defraying costs of
apprenticeship or other training programs: Provided, That the
requirements of clause (B) of the proviso to clause (5) of this
subsection shall apply to such trust funds; (7) with respect to money or
other thing of value paid by any employer to a pooled or individual
trust fund established by such representative for the purpose of (A)
scholarships for the benefit of employees, their families, and
dependents for study at educational institutions, (B) child care centers
for preschool and school age dependents of employees, or (C) financial
assistance for employee housing: Provided, That no labor organization or
employer shall be required to bargain on the establishment of any such
trust fund, and refusal to do so shall not constitute an unfair labor
practice: Provided further, That the requirements of clause (B) of the
proviso to clause (5) of this subsection shall apply to such trust
funds; (8) with respect to money or any other thing of value paid by any
employer to a trust fund established by such representative for the
purpose of defraying the costs of legal services for employees, their
families, and dependents for counsel or plan of their choice: Provided,
That the requirements of clause (B) of the proviso to clause (5) of this
subsection shall apply to such trust funds: Provided further, That no
such legal services shall be furnished: (A) to initiate any proceeding
directed (i) against any such employer or its officers or agents except
in workman's compensation cases, or (ii) against such labor
organization, or its parent or subordinate bodies, or their officers or
agents, or (iii) against any other employer or labor organization, or
their officers or agents, in any matter arising under subchapter II of
this chapter or this chapter; and (B) in any proceeding where a labor
organization would be prohibited from defraying the costs of legal
services by the provisions of the Labor-Management Reporting and
Disclosure Act of 1959 [29 U.S.C. 401 et seq.]; or (9) with respect to
money or other things of value paid by an employer to a plant, area or
industrywide labor management committee established for one or more of
the purposes set forth in section 5(b) of the Labor Management
Cooperation Act of 1978.
(d) Penalties for violations
(1) Any person who participates in a transaction involving a
payment, loan, or delivery of money or other thing of value to a labor
organization in payment of membership dues or to a joint labor-
management trust fund as defined by clause (B) of the proviso to clause
(5) of subsection (c) of this section or to a plant, area, or industry-
wide labor-management committee that is received and used by such labor
organization, trust fund, or committee, which transaction does not
satisfy all the applicable requirements of subsections (c)(4) through
(c)(9) of this section, and willfully and with intent to benefit himself
or to benefit other persons he knows are not permitted to receive a
payment, loan, money, or other thing of value under subsections (c)(4)
through (c)(9) violates this subsection, shall, upon conviction thereof,
be guilty of a felony and be subject to a fine of not more than $15,000,
or imprisoned for not more than five years, or both; but if the value of
the amount of money or thing of value involved in any violation of the
provisions of this section does not exceed $1,000, such person shall be
guilty of a misdemeanor and be subject to a fine of not more than
$10,000, or imprisoned for not more than one year, or both.
(2) Except for violations involving transactions covered by
subsection (d)(1) of this section, any person who willfully violates
this section shall, upon conviction thereof, be guilty of a felony and
be subject to a fine of not more than $15,000, or imprisoned for not
more than five years, or both; but if the value of the amount of money
or thing of value involved in any violation of the provisions of this
section does not exceed $1,000, such person shall be guilty of a
misdemeanor and be subject to a fine of not more than $10,000, or
imprisoned for not more than one year, or both.
(e) Jurisdiction of courts
The district courts of the United States and the United States
courts of the Territories and possessions shall have jurisdiction, for
cause shown, and subject to the provisions of section 381 of title 28
(relating to notice to opposite party) to restrain violations of this
section, without regard to the provisions of section 17 of title 15 and
section 52 of this title, and the provisions of chapter 6 of this title.
(f) Effective date of provisions
This section shall not apply to any contract in force on June 23,
1947, until the expiration of such contract, or until July 1, 1948,
whichever first occurs.
(g) Contributions to trust funds
Compliance with the restrictions contained in subsection (c)(5)(B)
of this section upon contributions to trust funds, otherwise lawful,
shall not be applicable to contributions to such trust funds established
by collective agreement prior to January 1, 1946, nor shall subsection
(c)(5)(A) of this section be construed as prohibiting contributions to
such trust funds if prior to January 1, 1947, such funds contained
provisions for pooled vacation benefits.
(June 23, 1947, ch. 120, title III, Sec. 302, 61 Stat. 157; Pub. L. 86-
257, title V, Sec. 505, Sept. 14, 1959, 73 Stat. 537; Pub. L. 91-86,
Oct. 14, 1969, 83 Stat. 133; Pub. L. 93-95, Aug. 15, 1973, 87 Stat. 314;
Pub. L. 95-524, Sec. 6(d), Oct. 27, 1978, 92 Stat. 2021; Pub. L. 98-473,
title II, Sec. 801, Oct. 12, 1984, 98 Stat. 2131; Pub. L. 101-273,
Sec. 1, Apr. 18, 1990, 104 Stat. 138; Pub. L. 104-88, title III,
Sec. 337, Dec. 29, 1995, 109 Stat. 954.)
References in Text
The Labor-Management Reporting and Disclosure Act of 1959, referred
to in subsec. (c)(8), is Pub. L. 86-257, Sept. 14, 1959, 73 Stat. 519,
as amended, which is classified principally to chapter 11 (Sec. 401 et
seq.) of this title. For complete classification of this Act to the
Code, see Short Title note set out under section 401 of this title and
Tables.
Section 5(b) of the Labor Management Cooperation Act of 1978,
referred to in subsec. (c)(9), probably means section 6(b) of Pub. L.
95-524, which is set out as a note under section 175a of this title.
Section 381 of title 28, referred to in subsec. (e), was omitted
from the revision of Title 28, Judiciary and Judicial Procedure, by act
June 25, 1948, ch. 646, 62 Stat. 869. See rule 65 of Federal Rules of
Civil Procedure set out in the Appendix to Title 28.
Chapter 6 (Sec. 101 et seq.) of this title, referred to in subsec.
(e), is a reference to act Mar. 23, 1932, ch. 90, 47 Stat. 70, popularly
known as the Norris-LaGuardia Act.
Amendments
1995--Subsec. (b)(2). Pub. L. 104-88 substituted ``(as defined in
section 13102 of title 49)'' for ``(as defined in part II of the
Interstate Commerce Act)''.
1990--Subsec. (c)(7)(C). Pub. L. 101-273 added subcl. (C).
1984--Subsec. (d). Pub. L. 98-473, in amending subsec. (d)
generally, added par. (1), designated existing provisions as par. (2),
inserted reference to par. (1), and inserted provisions relating to
commission of a felony.
1978--Subsec. (c)(9). Pub. L. 95-524 added cl. (9).
1973--Subsec. (c)(8). Pub. L. 93-95 added cl. (8).
1969--Subsec. (c)(7). Pub. L. 91-86 added cl. (7).
1959--Subsec. (a). Pub. L. 86-257 amended subsec. (a) generally.
Prior to amendment subsec. (a) read as follows: ``It shall be unlawful
for any employer to pay or deliver, or to agree to pay or deliver, any
money or other thing of value to any representative of any of his
employees who are employed in an industry affecting commerce.''
Subsec. (b). Pub. L. 86-257 amended subsec. (b) generally. Prior to
amendment subsec. (b) read as follows: ``It shall be unlawful for any
representative of any employees who are employed in an industry
affecting commerce to receive or accept, or to agree to receive or
accept, from the employer of such employees any money or other thing of
value.''
Subsec. (c). Pub. L. 86-257 substituted ``in respect to any money or
other thing of value payable by an employer to any of his employees
whose established duties include acting openly for such employer in
matters of labor relations or personnel administration or to any
representative of his employees, or to any officer or employee of a
labor organization, who is also an employee or former employee of such
employer, as compensation for, or by reason of, his service as an
employee of such employer'' for ``with respect to any money or other
thing of value payable by an employer to any representative who is an
employee or former employee of such employer, as compensation for, or by
reason of, his services as an employee of such employer'' in cl. (1),
and added cl. (6).
Effective Date of 1995 Amendment
Amendment by Pub. L. 104-88 effective Jan. 1, 1996, see section 2 of
Pub. L. 104-88, set out as an Effective Date note under section 701 of
Title 49, Transportation.
Applicability to Collective Bargaining Agreements
Amendment by Pub. L. 95-524 not to affect terms and conditions of
any collective bargaining agreement whether in effect prior to or
entered into after Oct. 27, 1978, see section 6(e) of Pub. L. 95-524,
set out as an Effective Date note under section 175a of this title.
Section Referred to in Other Sections
This section is referred to in sections 432, 433, 523, 1002, 1111 of
this title; title 18 section 2516; title 26 sections 9702, 9712; title
33 section 917.
