CONTACTS: Justin Hakes
(202) 329-0608

 

June 26, 2008

 

 

WASHINGTON, D.C.— The U.S. Chamber of Commerce obtained an Advisory Opinion Letter from the U.S. Department of Labor's Employee Benefits Standards Administration (EBSA) restraining unions from leveraging their pension funds to pressure employers.  The letter clarifies that under ERISA, the federal retirement security law, unions cannot use pension funds to coerce employers to accept unionization, "card check" organizing drives, or collective bargaining demands.

 

"Unions have become increasingly aggressive in using their members' retirement savings as a financial battering ram in organizing campaigns and contract negotiations, and to promote other goals," said U.S. Chamber President and CEO Tom Donohue.  "This letter clarifies that unions cannot base investment decisions on issues that have nothing to do with ensuring a secure retirement for beneficiaries."

 

The EBSA letter states that, "a fiduciary may only consider factors relating to the interests of plan participants and beneficiaries in their retirement income."  The letter also concludes that using pension fund assets to promote unionization or contract demands "may constitute a prohibited transfer of fund assets."

 

The letter builds upon a December 2007 EBSA Advisory Opinion Letter prohibiting union pension funds from introducing or supporting politically-motivated proxy resolutions that do not provide a clear economic benefit to their plans. 

 

Last year, the Chamber wrote to the Department of Labor asking whether a shareholder activism campaign launched by the AFL-CIO was compatible with ERISA.  The campaign sought to pressure companies to support the AFL-CIO's health care agenda, and reportedly to reveal the personal political contributions of corporate board members and officers to candidates who oppose that agenda. EBSA's earlier opinion letter expressed strong concern about the use of assets to promote legislative, regulatory or public policy positions not connected to the paramount purpose of the fund, providing retirement income for beneficiaries.

 

The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

 

Read the letter.

 

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