of employers and consultants fall under the National Labor Relations Act which is administered by the National Labor Relations Board.

The consultant reporting provisions of Landrum-Griffin are contained in section 203 of the act. That section says reports are required from, and I quote:

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 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.

Consultants who engage in any of these activities must file two types of reports with the Labor Department. The first is an agreement and activities report, form LM-20. A consultant must file a separate LM-20 within 30 days of each agreement or arrangement with an employer to undertake reportable activities.

A report must be filed by anyone engaged in persuader or spying activities, either directly or indirectly, including persons who secure the services of others.

I should point out that the word "activity" might be a little misleading. The Labor Department has made it clear that, for the purposes of filing the LM-20 report, a consultant is considered to have undertaken reportable activities when he agrees to perform them. It is not necessary that they have in fact been performed. The requirement to report is triggered by the agreement, and the 30-day deadline is based on the date of the agreement, not the date activities are performed.

I would further note the agreement does not have to be in writing. It may be no more than an oral understanding that reportable services will be performed.

A consultant or individual who undertakes any activity that requires the filing of an LM-20 report also must file an annual financial statement with the Labor Department. This second report, a form LM-21, must include all receipts and disbursements from all employers for whom labor relations advice and services have been rendered.

The annual financial report has been the subject of considerable controversy because it requires consultants to report payments received from services and advice that in and of themselves would not require the filing of an LM-20 activities report.

I would like to give you an example. Take the case of a consultant who gives labor relations advice and services to 10 clients. During the course of a year, the consultant makes a speech to the employees of just one of the clients to persuade them about exercising their collective-bargaining rights.

Because giving the speech is a persuader activity, the consultant must report it on an LM-20 activities form. And because the consultant has undertaken a reportable activity for one client, he then must file an annual financial report listing receipts and disbursements from all 10 of his labor relations clients.

The annual financial report listing all 10 clients must be filed even if the consultant did not undertake a single reportable activity for any of the other clients. In this particular example, if the consultant had not delivered the persuader speech, no reports would have been required.

The requirement that a consultant who engages in any reportable activity must file an annual financial report on all labor relations clients has been upheld in a number of court tests. And the courts have held that this provision applies not only to consultants but to attorneys who are also acting as consultants.

Some labor relations consultants, and some employers too, excuse their failure to comply with the reporting requirements by arguing that the law is vague. Indeed, there are situations where the wisdom of Solomon might be helpful in determining whether a report is required. But such instances are the exception rather than the rule.

When an employer hires a labor relations consultant or attorney, both parties usually have a clear understanding of the purpose of the agreement. From there, it should not be too difficult to determine if a report is required.

What are reportable activities?

I already mentioned giving a speech. Other persuader activities that clearly require a consultant to file a report include:

Setting up a company union and encouraging employees to join. Organizing an antiunion rally for employees.

Influencing union members to vote against a strike.

Showing an antiunion movie to employees.

Urging employees to organize a committee against unionism or a similar organization.

Setting up some type of community organization which tells employees that it is in the best interest of the community for them not to join a union.

A report also is required if a consultant writes an advertisement for an employer that indicates the employees would be better off without a union and which appears under the consultant's name or the name or someone other than the employer.

No report is required, however, if a consultant prepares an ad that appears under the employer's name and expresses the employer's view in connection with an organizing drive.

Also certain activities clearly do not require a report. Consultants who are engaged solely in negotiating contracts for employers do not have to report. Nor do consultants whose labor relations services to employers are limited to giving advice or interpreting the law.

Arrangements involving persuader activities are one of the two principal categories of agreements between consultants and employers that require reports under Landrum-Griffin. The other is information-gathering agreements. Here, too, there are clear guidelines on what must be reported and what is exempt.

A consultant who agrees to persuade an employee to report on the union's bargaining tactics must file a report. And so does a consultant who agrees to plant phony employees in a firm to find out how the workers feel about a union's attempt to organize them.

No report is required if the information the consultant obtains concerns a union involved in a dispute with the employer as long as it is to be used exclusively in connection with an administrative or arbitration proceeding or a court case. And no report is required if a consultant is hired by an employee to plant agents in a competitor's firm to learn if a union organizing drive is affecting employee morale or productivity at this other firm.

There is one distinction worth noting between the basic reporting requirements for persuader activities and those for information gathering. A report is required on an information-gathering agreement between a consultant and an employer, only if the agreement is made in connection with an organizing drive or labor dispute involving that employer. But an agreement to undertake persuader activities must be reported regardless of whether there is an organizing drive or a labor dispute.

A few minutes ago I pointed out that consultants who limit their activities solely to giving advice to employers are exempt from the reporting requirements of Landrum-Griffin. No provision of the act has caused more confusion or controversy because, although the exemption is clear, the line between advice and persuasion is not. It is clear that a report is required when a consultant prepares material and delivers it directly to employees to persuade them about their bargaining rights.

It is also clear that a report is not required when a consultant merely gives advice on the legality of material prepared by an employer to deliver to his employees to persuade them about their bargaining rights.

But when the consultant prepares the material for the employer, the line begins to blur.

The Labor Department has long taken the position that an agreement to prepare material for an employer does not ordinarily require reporting unless there is some indication that the underlying motive goes beyond advice to the employer. In a situation where the employer is free to accept or reject material written by a consultant, the fact that the consultant drafted the material in its entirety will not in itself generally be sufficient to require a report. This interpretation troubles me because, when stretched to its extreme, it permits a consultant to prepare and orchestrate the dissemination of an entire package of persuader material while sidestepping the reporting requirement merely by using the employer's name and letterhead or avoiding direct contact with employees.

We are now reviewing the question of where advice ends and persuasion begins to make sure the Department's position is consistent with the intent of the law and adequate to deal with the approaches to persuader activities that have evolved since the law was enacted more than 20 years ago.

The interpretation and enforcement of a rather complex law such as Landrum-Griffin is naturally an evolutionary process. In the early years of Landrum-Griffin there was a great deal of activity, spurred partly by the need to interpret a new statute and partly by the number of complaints and allegations received by the Department.

Until recently, however, the number of complaints about reportable agreements, and consequently the Department's activites, had declined significantly.

One possible reason was that unions came to feel that the reporting provisions of the law were not an effective means to counteract the activities of employers and consultants. More effective results could be obtained through NLRB rulings on unfair labor practice charges which could result in cease-and-desist orders and other remedial action such as certification without a representation election.

Even if it ultimately were found that the employer had not committed an unfair labor practice, the NLRB record would disclose the pertinent information concerning the activities of the employer and the consultant in the case.

Another reason for the decline in activity may have been a number of court decisions which narrowed the reporting provisions and greatly increased the Department's burden of proof. One of these decisions emphasized that the Department must prove not only that consultant had committed an activity described in section 203(b) but also that an object of the agreement between the consultant and employer was for the consultant to perform a 203(b) activity.

The court further held that an NLRB ruling that there was an unfair labor practice was not sufficient to prove the object of the employer. That critical factor had to be proven independently. The decision also raised doubts as to whether the Department could compel an employer to admit on a reporting form what had been denied before the NLRB.

Our enforcement efforts also have been hindered by difficulty in obtaining the information we need to pursue investigations. We often have to issue subpenas to obtain information from parties who may be obliged to file reports, and in some instances we have to seek court enforcement of these subpenas.

Although the courts generally have held that the Department's subpena authority under Landrum-Griffin is extremely broad, in two recent cases district courts have declined to enforce subpenas on constitutional grounds.

Both cases involve possible employer contributions to nonprofit antiunion organizations and employee-committees which may have been involved in persuading employees concerning their collective bargaining rights.

Although these are not typical employer-consultant reporting cases and although we expect to appeal the district court decisions, they raise questions about the Department's ability to obtain essential information.

Despite the period during which we received relatively few complaints, and despite the investigative and legal difficulties created by court decisions, the Department has made a number of significant rulings in recent years.

In one case, for example, a member of an employer association asked the association to send his employees some antiunion literature. The association complied with the request. Although the litrature was rather vague, its antiunion bias was unmistakable and as sent out during a union organizing drive.

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We therefore concluded that the object of the agreement between the association and the employer-member was to persuade employees concerning their collective-bargaining rights. Reports were obtained from both parties.

In another significant case, we learned that a consultant firm had developed a system to obtain information about the union sentiments of employees in a way that discouraged union support in an organizing drive.

Even though the consultant firm had no direct contact with employees, we concluded that its close supervision of the information-gathering system clearly indicated that it had gone beyond merely giving advice.

We also concluded that the nature and context of the activities showed that the object of the arrangement was to persuade employees and gather information about their union sentiments. After litigation was instituted, the consultant firm submitted the required reports.

In another case, an employer association, upon the request of employer-members, would provide to employees a subscription to a trade journal which occasionally contained antiunion articles. Since the journal was published by the employer association and distributed directly to employees, we concluded that this activity went beyond giving advice.

Further, we concluded that there was an agreement or arrangement since the subscriptions were provided at the request of employer-members.

Finally, we concluded that an object to persuade could reasonably be inferred from the presumed awareness of both the association and the employer-members of the existence of the antiunion articles.

The district court agreed with the Department's determination and ordered reports to be filed. The appellate court, however, remanded the case to the district court for additional hearings to ascertain whether an object to persuade could reasonably be inferred. After the hearings, the district court again concluded that reports must be filed. The case is still subject to appeal.

This case illustrates the tremendous resources required to administer the consultant and employer reporting provisions. Because of the detailed information necessary to determine the existence of a reporting obligation, the investigation and analysis, which included litigation to enforce a Department subpena, took over 2 years. That phase of the case was followed by more than 2 years of court proceedings, and there may be more to come.

The pursuit of this and other precedent-setting cases indicates the Department's continuing concern that the consultant and employer reporting provisions of the Landrum-Griffin Act be properly administered.

Over the past year there has been a substantial upsurge in our enforcement activities. This has been due in large measure to an increase in union utilization of these procedures. We have received a greater number of complaints with supporting documentation from unions.

Since the beginning of this fiscal year in October 1979, we have opened approximately 150 consultant reporting and a similar