LM-2: An Employer's Guide to Learning About a Union in Its Workplace

It's going to be one of those days. Before your coffee mug hits the desk your boss is at the door. A union flier was found in the breakroom. Everyone is in a full-on panic. She hands you a copy of the flier and demands to know: What do you know about this union?

Most HR professionals (and even most labor relations specialists) cannot answer that question off the top of their heads. Yet an employer must be able to quickly figure out who it's dealing with. Where do you start? The union's LM-2 form.

What Is an LM-2?

The LM-2 is like a tax return for a union. Each union is supposed to file one every year. An LM-2 is a form where the union reports things like how much it pays its officers and employees. The LM-2 is for large unions. If you're dealing with a small local union, it might file an LM-3 or an LM-4.

If you've ever seen an LM-2 form, you've probably only seen line 64, which is the amount spent on individual members. It is the most common thing shown. But there's a lot more to a union's LM-2 form than just that line.

The form contains a detailed summary of all receipts and disbursements from the union in that reporting year. In addition to payments for things like salaries you can also see payments to vendors for expenses like parties, travel by union officials, and fees to law firms or PR professionals. All of these expenditures can provide clues about the financial condition of the union and maybe even why a union flier has shown up in your breakroom.

What Can You Learn from an LM-2?

When a flier shows up at a workplace, most employers have two questions. First, "Is an attempt being made to organize my employees?"

If you don't think that's the case, the second question is, "Why me?"
In other words, is this part of a negative public relations campaign against my company? Do I have to prepare my people for ongoing disruptions? Or is this a one-time deal? For instance, is this like a Fight for $15 protest, and the company just happens to be on the parade route?

An LM-2 doesn't answer all of these questions. But it's a good place to start. For example, from an LM-2 you can learn more about a local union and its relationship with its international parent union.

An international union brings big guns to any organizing fight. Of course, many locals are formidable. But is there an international union behind this, bringing in international money and organizers? Or are you just dealing with local individuals who may or may not be great at what they do?

I'm going to show you briefly how you can look at clues in an LM-2 to learn a few things about a particular local in your area. Start by going to UnionReports.gov (this will take you to a page on the Department of Labor's website). You'll want to search a union in your area. Click on the "Union Search" link on that page.

Next, enter some basic information about your union. If you know a particular local that you want to search you can enter its name, otherwise just put in IBT-Teamsters and a local number. (I put in Local 856). Hit the "Submit" button at the bottom of the page, and you'll see a list of all the reports on file since 2001.

Here is a screenshot:

What do you notice first? Total membership (the last column) has almost doubled and total receipts (3rd column from the right) has almost tripled since 2001 to over $7.6 million. This is a union that is bucking the national trend and growing. It is also looks financially stable, with assets of more than $2.1 million against liabilities of just over $600,000. Based on this information, you know this local has resources.

One thing you might also notice, however, is that most of the membership growth happened in just two years, in 2008-09 and again in 2016-17. Each of those years the union added more than 1,500 new members. These jumps probably mean the union is growing by absorbing other Teamster locals instead of by organizing locations (1,000+ employee units are rare).

Next, click on the link for the 2016 report (the top entry in the column "Fiscal Year"). This will pull up the latest LM-2 document. You'd want to print this whole document out and share it with your boss. But there are a couple of other things you should look at.

You can see details on how the money is received or disbursed in the backup schedules. This includes how much the union pays its officers and employees. Some other interesting lines include line 13 (did the union discover a loss of funds during the year?) and line 48 (receipts from other sources). Schedules 14 and 15 are useful because they detail receipts from other sources and disbursements for representational activities, like organizing.

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Schedule 14 also shows that the International Teamsters is reimbursing this location over $130,000 annually for help on organizing campaigns (most likely against large national companies). You could surmise from this that the local has some good organizers but also that they might be busy focusing on these other campaigns.

As you can tell, these forms contain a lot of detailed information, much more than we can handle in one article. But this certainly gives you a start.

Phillip Wilson, president and general counsel of the Labor Relations Institute in Broken Arrow, Okla., is a member of the Society for Human Resource Management Labor Relations Special Expertise Panel.

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