BILL REQ. #:  H-3238.2 

Read first time 01/17/12.   Referred to Committee on State Government & Tribal Affairs.

     AN ACT Relating to protecting public sector workers' rights through public disclosure of public sector unions' finances; adding a new section to chapter 41.58 RCW; adding a new section to chapter 28B.52 RCW; adding a new section to chapter 41.56 RCW; adding a new section to chapter 41.59 RCW; adding a new section to chapter 41.76 RCW; adding a new section to chapter 41.80 RCW; adding a new section to chapter 47.64 RCW; creating a new section; prescribing penalties; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds the power of workers to make sound decisions concerning their careers, workplace choices, workplace representation, and other areas of importance hinges on a worker's access to useful and relevant information. The legislature finds it is important to ensure public sector workers are provided with useful information concerning their membership in a labor union through thorough and complete public disclosure of union finances and by protecting a worker's freedom of speech, assembly, and other rights.
     The legislature finds today's workforce is more educated, empowered, and familiar with financial data and transactions than at any time in the state's history. Workers are presented with more choices concerning their careers than in the past, in areas such as compensation packages, benefits, and other matters related to their careers. Whether and how to exercise a worker's self-governance rights is among the choices a worker faces.
     The legislature finds transparency in organizational finances central to sound decision making. The legislature recognizes the federal labor management reporting and disclosure act provides for the reporting of financial data for private sector labor organizations. The legislature intends for all public sector labor organizations in Washington to provide similar, relevant financial data to their members.
     Residents of Washington state have a cherished populist tradition of involvement in and knowledge of public affairs. The people have already called for open public meetings, government documents upon request, increased legislative awareness through various traditional and electronic media, and transparency of candidate and campaign committee finances. These methods serve as a powerful deterrent against corruption and for people to make decisions about their individual and collective futures.
     The legislature intends for increased transparency and financial disclosure to provide public sector workers with the knowledge they need to make wise decisions about themselves, their careers, and their families. Sound decision making depends on sound information, and workers cannot be expected to make decisions in their own best interest without access to unbiased and candid information. The legislature intends to ensure members of labor organizations are provided with more complete, timely, and comprehensible information about their union's financial practices, investments, solvency, and expenditures to empower them to protect their personal financial interests and exercise their democratic rights of self-governance.

NEW SECTION.  Sec. 2   A new section is added to chapter 41.58 RCW to read as follows:
     (1) An employee organization must annually, not more than sixty days after the end of its fiscal year, provide financial disclosure information to all employees in the bargaining unit and to the general public by filing with the commission a report containing the following information, detailed by functional spending categories, that accurately discloses its financial condition and operations for the preceding fiscal year:
     (a) Assets and liabilities at the beginning and end of the fiscal year;
     (b) Salary, the cost of fringe benefits, allowances, and other direct or indirect disbursements to each officer of the local, the employee organization, and the support staff, as well as all contributions to state or national affiliates and any official or employee thereof;
     (c) All income received or the value of services furnished to an employee organization by either a parent affiliated labor organization or by any other labor organization on behalf of the employee organization;
     (d) A report of the total amount spent by the employee organization, and an itemization of expenditures of more than one thousand five hundred dollars for:
     (i) Contract negotiation and administration;
     (ii) Organizing activities;
     (iii) Strike activities;
     (iv) Litigation, specifying the matters and cases involved;
     (v) Public relations activities;
     (vi) Political activities, including contributions to candidates, ballot measures, member communications, and get out the vote efforts;
     (vii) Activities attempting to influence the passage or defeat of federal, state, or local legislation or the content or enforcement of federal, state, or local regulations or policies;
     (viii) Voter education and issue advocacy activities;
     (ix) Training activities for each officer of the employee organization or employee organization support staff; and
     (x) Conference, convention, and travel activities engaged in by the employee organization;
     (e) The percentage of the employee organization's total expenditures that were spent for each of the activities described in (d) of this subsection;
     (f) The names, addresses, and activities of any of the law firms, public relations firms, or lobbyists whose services are used by the employee organization for any activity described in (d) of this subsection;
     (g) A list of political candidates, political organizations, charitable organizations, nonprofit organizations, and community organizations to which the employee organization contributed financial or in-kind assistance and the dollar amount of such assistance; and
     (h) The name and address of any political action committees with which the employee organization is affiliated or to whom it provides contributions, the total amount of contributions to those committees, the candidates or causes to which the committees provided any financial assistance, and the amount provided to each candidate or cause.
     (2) The report required in subsection (1) of this section must be prepared by an auditing organization, independent of the employee organization, using generally accepted auditing standards and generally accepted accounting principles, that ensures the accuracy and veracity of the information provided by the employee organization. All expenditures must be reported as either germane to collective bargaining, contract administration, or grievance processing, or not so related.
     (3) The employee organization must disclose information to all employees in the bargaining unit and to the general public by filing with the commission a report signed by its president and secretary or corresponding principal officers, and containing the following information:
     (a) The name of the employee organization, its mailing address, and any other address at which it maintains its principal office or at which it keeps records;
     (b) The name and title of each of its officers;
     (c) The initiation fee or fees required from a new or transferred member;
     (d) The regular dues or fees or other periodic payments required to remain a member of the reporting employee organization; and
     (e) Detailed statements regarding the provisions made and procedures followed with respect to each of the following:
     (i) Qualifications for, or restrictions on, membership;
     (ii) Levying of assessments;
     (iii) Participating in insurance or other benefit plans;
     (iv) Authorization for disbursement of funds of the employee organization;
     (v) Audit of financial transactions of the employee organization;
     (vi) The calling of regular and special meetings;
     (vii) The selection of officers and stewards;
     (viii) Discipline or removal of officers or agents;
     (ix) Imposition of fines, suspensions, and expulsions of members, including the grounds for such an action and any provision made for notice, hearing, judgment, and appeal;
     (x) Authorization for bargaining demands; and
     (xi) Ratification of contract terms.
     (4) Any change in the information required by subsection (3) of this section must be reported to the commission at the time the employee organization files with the commission the annual financial report required in subsection (1) of this section.
     (5) Every officer of an employee organization and every employee of an employee organization, other than an employee performing exclusively clerical or custodial services, shall file with the commission within sixty days of the end of its fiscal year a signed report listing and describing for the preceding fiscal year:
     (a) Any stock, bond, security, loan given or received, or other interest, legal or equitable, which he or she or a spouse or minor child directly or indirectly held in, and any income or any other benefit with monetary value, including reimbursed expenses, which he or she or a spouse or minor child directly or indirectly derived from, any business any part of which consists of buying from, selling or leasing to, or otherwise dealing with, the employer;
     (b) Any stock, bond, security, loan given or received, or other interest, legal or equitable, which he or she or a spouse or minor child directly or indirectly held in, and any income or any other benefit with monetary value, including reimbursed expenses, which he or she or a spouse or minor child directly or indirectly derived from, a business any part of which consists of buying from, or selling or leasing directly or indirectly to, or otherwise dealing with, the employee organization;
     (c) Any direct or indirect business transaction or arrangement between him or her or a spouse or minor child and the employer or any subsidiary thereof whose employees the organization represents or is actively seeking to represent, except work performed and payments and benefits received as a bona fide employee of the employer; and
     (d) Any payment of money or other thing of value, including reimbursed expenses, which he or she or a spouse or minor child received directly or indirectly from any person who acts as a labor relations consultant to the employer.
     (6) The provisions of subsection (5)(a) through (d) of this section do not require any officer or employee to report his or her bona fide investments in securities traded on a securities exchange registered as a national securities exchange under the securities exchange act of 1934, in shares in an investment company registered under the investment company act, or in securities of a public utility holding company registered under the public utility holding company act of 1935, or to report any income derived therefrom.
     (7) Every person required to file any report under subsections (1), (3), and (5) of this section shall maintain records on the matters required to be reported which will provide in sufficient detail the necessary basic information and data from which the documents filed with the commission may be verified, explained or clarified, and checked for accuracy and completeness, and shall include vouchers, worksheets, receipts, and applicable resolutions, and shall keep the records available for examination for a period of not less than six years after the filing of the documents based on the information which they contain. The commission shall preserve the statements or reports for not less than ten years. The contents of the reports and documents filed with the commission under subsections (1), (3), and (5) of this section are public information and shall be made available to the public in the following manners:
     (a) The commission shall by rule make reasonable provision for the inspection and examination, on the request of any person, of the information and data contained in any report or other document filed under subsections (1), (3), and (5) of this section.
     (b) The commission shall furnish copies of reports or other documents filed with the commission under subsections (1), (3), and (5) of this section at a charge based on the cost of the service.
     (c) By ninety days after the effective date of this section, the commission shall operate a web site or contract for the operation of a web site that allows public access to reports, copies of reports, or copies of data and information submitted in reports, filed with the commission under subsections (1), (3), and (5) of this section.
     (d) The employee organization must make copies of reports or other documents filed under subsections (1), (3), and (5) of this section available to every employee in the bargaining unit, and must annually notify every employee in the bargaining unit that the reports are available on the commission's web site.
     (8) The commission may determine whether an actual violation of this section has occurred, and following that determination issue and enforce an appropriate order subject to the following terms:
     (a) If the commission finds that an employee organization has violated this section by failing or refusing to prepare the reports as required in subsections (1), (3), and (5) of this section or by preparing an incomplete or inaccurate report, the commission shall issue an order compelling compliance and assess a fine of fifty dollars for each day each report was overdue.
     (b) On finding a second violation by the employee organization, the commission shall:
     (i) Issue an order compelling compliance; and
     (ii) Assess a fine of fifty dollars for each day each report was overdue or order the refund of all membership dues or agency shop fees to employees in the bargaining unit for the period covered by the report, whichever amount is greater.
     (c) On finding a third violation by the employee organization, the commission shall:
     (i) Issue an order compelling compliance;
     (ii) Assess a fine of fifty dollars for each day each report was overdue or order the refund of all membership dues or agency shop fees to employees in the bargaining unit for the period covered by the report, whichever amount is greater; and
     (iii) Order an employee election in the affected bargaining unit to determine whether the employee organization will continue to be the exclusive bargaining representative of the bargaining unit. The election shall be conducted upon the expiration of the existing collective bargaining agreement covering the affected bargaining unit.
     (d) The commission may make determinations and issue and enforce orders at its own discretion or as a response to a petition filed by the employer, any employee in the bargaining unit before expiration of the applicable collective bargaining agreement, or any member of the general public. The commission may, at its discretion, refer matters of compliance to the state attorney general or other enforcement agency.
     (9) Civil enforcement provisions:
     (a) Any person who willfully violates this section shall be fined not more than ten thousand dollars.
     (b) Any person who makes a false statement or representation of a material fact, knowing it to be false, or who knowingly fails to disclose a material fact, in any document, report, or other information required under this section shall be fined not more than ten thousand dollars.
     (c) Any person who willfully makes a false entry in or willfully conceals, withholds, or destroys any books, records, reports, or statements required to be kept by this section shall be fined not more than ten thousand dollars.
     (d) Each individual required to sign reports under subsections (1), (3), and (5) of this section is personally responsible for the filing of those reports and for any statement contained therein which he or she knows to be false.

NEW SECTION.  Sec. 3   A new section is added to chapter 28B.52 RCW to read as follows:
     Section 2 of this act applies to employee organizations under this chapter.

NEW SECTION.  Sec. 4   A new section is added to chapter 41.56 RCW to read as follows:
     The requirements applicable to employee organizations under section 2 of this act apply to bargaining representatives under this chapter.

NEW SECTION.  Sec. 5   A new section is added to chapter 41.59 RCW to read as follows:
     Section 2 of this act applies to employee organizations under this chapter.

NEW SECTION.  Sec. 6   A new section is added to chapter 41.76 RCW to read as follows:
     Section 2 of this act applies to employee organizations under this chapter.

NEW SECTION.  Sec. 7   A new section is added to chapter 41.80 RCW to read as follows:
     Section 2 of this act applies to employee organizations under this chapter.

NEW SECTION.  Sec. 8   A new section is added to chapter 47.64 RCW to read as follows:
     Section 2 of this act applies to employee organizations under this chapter.

NEW SECTION.  Sec. 9   This act takes effect July 1, 2012.