29 U.S.C. § 502 — Bonding of officers and employees of labor organizations; amount, form, and placement of bonds; penalty for violation
submitted 67 years ago by Pub. L. 86-257 to r/title-29-LABOR · 405 words · no verdicts yet
Officers and employees of labor unions who handle union money or property must be bonded — insured against fraud or dishonesty — in an amount tied to how much money they handle, capped at $500,000. Anyone not bonded can't be allowed to handle union funds, and willfully breaking this rule is a crime punishable by fine or up to a year in prison.
(a) Every officer, agent, shop steward, or other representative or employee of a labor organization — except one whose property and yearly income are $5,000 or less — or of a trust that a labor organization has an interest in, must be bonded if they handle its money or property. The bond protects against losses from fraud or dishonesty on their part, whether done alone or through collusion with others. The bond amount is set at the start of the organization's fiscal year, at not less than 10 percent of the funds that person and any predecessor handled during the preceding fiscal year — but never more than $500,000. If there's no preceding fiscal year, the minimum bond is $1,000 for a local labor organization, and $10,000 for any other labor organization or trust. Bonds must be individual or scheduled in form, backed by a corporate surety company. Anyone not covered by such a bond may not receive, handle, pay out, or otherwise control the funds or property of a labor organization or a trust it's interested in. A bond cannot be arranged through an agent, broker, or surety company in which any labor organization, or its officer, agent, shop steward, or representative, has a direct or indirect interest. The surety company must be authorized by the Secretary of the Treasury under sections 9304–9308 of title 31 as an acceptable surety on federal bonds — except that the Secretary of Labor may exempt a labor organization that has made other bonding arrangements providing comparable or better protection at comparable or lower cost.
(b) Anyone who willfully violates this section may be fined up to $10,000, imprisoned for up to one year, or both.
Every officer, agent, shop steward, or other representative or employee of any labor organization (other than a labor organization whose property and annual financial receipts do not exceed $5,000 in value), or of a trust in which a labor organization is interested, who handles funds or other property thereof shall be bonded to provide protection against loss by reason of acts of fraud or dishonesty on his part directly or through connivance with others. The bond of each such person shall be fixed at the beginning of the organization’s fiscal year and shall be in an amount not less than 10 per centum of the funds handled by him and his predecessor or predecessors, if any, during the preceding fiscal year, but in no case more than $500,000. If the labor organization or the trust in which a labor organization is interested does not have a preceding fiscal year, the amount of the bond shall be, in the case of a local labor organization, not less than $1,000, and in the case of any other labor organization or of a trust in which a labor organization is interested, not less than $10,000. Such bonds shall be individual or schedule in form, and shall have a corporate surety company as surety thereon. Any person who is not covered by such bonds shall not be permitted to receive, handle, disburse, or otherwise exercise custody or control of the funds or other property of a labor organization or of a trust in which a labor organization is interested. No such bond shall be placed through an agent or broker or with a surety company in which any labor organization or any officer, agent, shop steward, or other representative of a labor organization has any direct or indirect interest. Such surety company shall be a corporate surety which holds a grant of authority from the Secretary of the Treasury under sections 9304–9308 of title 31, as an acceptable surety on Federal bonds: Provided, That when in the opinion of the Secretary a labor organization has made other bonding arrangements which would provide the protection required by this section at comparable cost or less, he may exempt such labor organization from placing a bond through a surety company holding such grant of authority.
Any person who willfully violates this section shall be fined not more than $10,000 or imprisoned for not more than one year, or both.
Source credit: (Pub. L. 86–257, title V, § 502, Sept. 14, 1959, 73 Stat. 536; Pub. L. 89–216, § 1, Sept. 29, 1965, 79 Stat. 888.)
- 1959Enacted · Pub. L. 86-257 · 73 Stat. 536
- 1965Amended · Pub. L. 89-216 · 79 Stat. 888
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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