Warshauer v. Solis

577 F.3d 1330 (11th Cir. 2009)


Congress enacted the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) to protect the rights of employees and the public. An important component of this protection is reporting requirements which would shed light on certain financial transactions. Section 203(a)(1) requires the filing of a financial report from 'every employer who in a fiscal year  made--(1) any payment or loan, direct or indirect of money or other thing of value (including reimbursed expenses), or any promise or agreement therefor, to any labor organization or officer. . . .' 29 U.S.C. § 433(a)(1). Section 203(a)(1)'s reporting requirement applies only to 'employers.' The LMRDA defines an 'employer' as: Any employer or any group or association of employers engaged in an industry affecting commerce (1) which is, with respect to employees engaged in an industry affecting commerce, an employer within the meaning of any law of the United States relating to the employment of any employees. . . . Congress authorized D 'to issue, amend, and rescind rules and regulations prescribing the form and publication of reports required to be filed and such other reasonable rules and regulations . . . as D may find necessary to prevent the circumvention or evasion of such reporting requirements.' 29 U.S.C. § 438. D promulgated regulations to implement the employer reporting requirements of the LMRDA. Every employer was required to file an annual report on Form LM-10. Employers were required to report only 'certain transactions' or arrangements with labor organizations, union officials, employees, or labor relations consultants, or who have made expenditures for certain objects relating to employees' or unions' activities. Exempt from reporting 'sporadic or occasional gifts, gratuities, or favors of insubstantial value, given under circumstances and terms unrelated to the recipient's status in a labor organization. The Interpretive Manual gave guidance on implementing the statute and regulations. D's decision not to enforce the reporting requirements for payments of 'insubstantial value' is known as the de minimis exemption. D allegedly departed from historical practices by publishing advisories on her website regarding the application of § 203(a)(1) to DLCs and the de minimis exemption. Formally, LM-10 filing was only required for employers who engaged in persuader activities. In 2005, D published on D's website list of rules, called 'Frequently Asked Questions,' or 'FAQs,' which detailed the reports to be filed, records to be kept, and calculations to be made annually by employers. D specifically identified DLCs as falling within the definition of 'employer' under the LMRDA, essentially directing DLCs to file the LM-10. The website also announced that the fixed amount was $250--'gifts and gratuities with an aggregate value of $ 250 or less provided by an employer will be considered insubstantial for the purposes of LM-10 reporting.' P is an attorney who specializes in actions under the Federal Employers Liability Act (FELA). The United Transportation Union (UTU), appointed him as a DLC. As a DLC, the UTU recommends P to its members for representation in workers' compensation cases, personal injury cases, and other matters. P offers this legal counsel to UTU members at a reduced fee of 25% of the recovery. P engages in normal business entertaining of potential UTU clients. sent P a letter informing him that 'payments made or promised to the UTU, . . . either directly or indirectly, by each DLC that is an 'employer' within the meaning of section 3(e) of the LMRDA, must be disclosed on Employer Report, Form LM-10. P did not file because he believed he did not qualify as an employer. P sued D seeking an injunction from enforcing reporting requirements in that D did not first engage in notice and comment rulemaking. He also sought declaratory relief invalidating such reporting requirements with respect to DLCs and D's website advisories regarding the de minimis exemption. The court held that the website advisories regarding both coverage of DLCs and the $250 threshold for reporting were interpretive guidance, not substantive rules, and thus, even if they departed from the Secretary's prior interpretation, notice and comment rulemaking was not required. P appealed.