29 U.S.C. § 501 — Fiduciary responsibility of officers of labor organizations
submitted 67 years ago by Pub. L. 86-257 to r/title-29-LABOR · 509 words · no verdicts yet
Union officers must manage their union's money and property only for the union's benefit, following its rules. A member can sue an officer who breaks this duty if the union itself won't. Stealing from a union is a separate crime, punishable by a fine and up to five years in prison.
(a) Duties of officers; exculpatory provisions and resolutions void. Officers, agents, shop stewards, and other representatives of a labor union hold a position of trust toward the union and its members. Each of them must: hold the union's money and property solely for the union's and its members' benefit; manage, invest, and spend it according to the union's constitution, bylaws, and governing-body resolutions; avoid dealing with the union as, or on behalf of, an opposing party in matters connected to their duties; avoid holding any financial or personal interest that conflicts with the union's interests; and account to the union for any profit they receive, in any capacity, from transactions they conduct or direct on the union's behalf. Any provision in a union's constitution or bylaws — or any resolution — that tries to excuse someone from these duties is void, because it goes against public policy.
(b) Violation of duties; action by member after refusal or failure by labor organization to commence proceedings; jurisdiction; leave of court; counsel fees and expenses. If an officer, agent, shop steward, or representative is accused of violating the duties in (a), and the union or its governing board or officers refuse or fail to sue, recover damages, or get an accounting within a reasonable time after a member asks them to, that member may sue the accused person instead — in a federal district court or in a state court with proper jurisdiction — to recover damages or get an accounting or other relief for the union's benefit. Such a lawsuit can only be filed with the court's permission, based on a verified application showing good cause; that application can be made without notifying the other side first. The trial judge may award part of any recovery to pay the fees of the lawyer who brought the suit, and to reimburse the member for expenses the litigation required.
(c) Embezzlement of assets; penalty. Anyone who embezzles, steals, or unlawfully and willfully takes or converts to their own use (or someone else's use) any of a union's money, funds, securities, property, or other assets — while serving as an officer of that union or being employed by it, directly or indirectly — can be fined up to $10,000, imprisoned up to five years, or both.
The officers, agents, shop stewards, and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group. It is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization. A general exculpatory provision in the constitution and bylaws of such a labor organization or a general exculpatory resolution of a governing body purporting to relieve any such person of liability for breach of the duties declared by this section shall be void as against public policy.
When any officer, agent, shop steward, or representative of any labor organization is alleged to have violated the duties declared in subsection (a) and the labor organization or its governing board or officers refuse or fail to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so by any member of the labor organization, such member may sue such officer, agent, shop steward, or representative in any district court of the United States or in any State court of competent jurisdiction to recover damages or secure an accounting or other appropriate relief for the benefit of the labor organization. No such proceeding shall be brought except upon leave of the court obtained upon verified application and for good cause shown, which application may be made ex parte. The trial judge may allot a reasonable part of the recovery in any action under this subsection to pay the fees of counsel prosecuting the suit at the instance of the member of the labor organization and to compensate such member for any expenses necessarily paid or incurred by him in connection with the litigation.
Any person who embezzles, steals, or unlawfully and willfully abstracts or converts to his own use, or the use of another, any of the moneys, funds, securities, property, or other assets of a labor organization of which he is an officer, or by which he is employed, directly or indirectly, shall be fined not more than $10,000 or imprisoned for not more than five years, or both.
Source credit: (Pub. L. 86–257, title V, § 501, Sept. 14, 1959, 73 Stat. 535.)
- 1959Enacted · Pub. L. 86-257 · 73 Stat. 535
A history note hasn’t been published yet. The record shows enactment by Pub. L. 86-257 on 1959-09-14.
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