Employment related Crimes

John J. Flood Bio & Jim McGough (Biography)
6304 N Francisco Av
Chicago. Il 60659
773-878-1002(tel)

35 Am. Crim. L. Rev. 561, *

Spring, 1998

35 Am. Crim. L. Rev. 561

LENGTH: 29315 words

ARTICLE: Employment-Related Crimes

David B. Darden and Robyn J. Greenberg and Susannah C. Merritt

SUMMARY:
... This Article surveys the criminal penalties currently available to protect workers in the areas of occupational safety and employment practices. ... A. Occupational Safety and Health Act ... Criminal prosecutions have been initiated either when an employer's willful violation of a standard, rule, order or regulation causes the death of an employee, or when an employer makes a false representation regarding OSH Act compliance. ... Employer's Willful Violation of Standard Causes Death ... Criminal violations occur when (i) an employer's; (ii) willful violation of; (iii) a specific standard, rule, order or regulation; (iv) causes the death of an employee. ... In 1992, the Supreme Court held that state regulation of occupational safety and health issues already regulated by a federal standard was preempted by the OSH Act. ... Occupational Safety and Health Administration ("OSHA") regulations governing the working conditions of employees are themselves preempted by regulations or standards affecting occupational safety and health enacted by other federal agencies. ... The Clinton Administration has proclaimed that it "will not tolerate a lax attitude toward worker safety and health" through its "New OSHA" initiative. ... C. Federal Mine Safety and Health Act ... The Mine Safety and Health Administration ("MSHA") has a more vigorous criminal enforcement program than does OSHA, though the number of criminal referrals from the MSHA under FMSHA has fluctuated during the 1990s. ...

TEXT:
[*562] I. INTRODUCTION

This Article surveys the criminal penalties currently available to protect workers in the areas of occupational safety and employment practices. Section II discusses worker safety through the Occupational Safety and Health Act ("OSH Act"), ¹ state criminal law, and the Federal Mine Safety and Health Act ("FMSHA"). ² Section III analyzes the criminal law covering employment practices in the Fair Labor Standards Act ("FLSA"). ³ Section IV covers the Labor Management Relations Act ("LMRA"), which prohibits payments and loans by employers to employees or labor organizations. ⁴ Finally, Section V reviews § 501(c) of the Labor-Management Reporting and Disclosure Act ("LMRDA"), which prevents appropriations of union funds for non-union purposes. ⁵

II. WORKER SAFETY

This Section discusses the criminal laws relevant to aspects of worker safety. Part A analyzes the OSH Act, ⁶ including the offense of willful violation of a standard leading to the death of an employee, false representation, penalties, and enforcement. Part B discusses state criminal law and its effectiveness in deterring violations of the OSH Act. Additionally, Part B examines current efforts in reforming occupational safety and health. Part C discusses the FMSHA, ⁷ including offenses and current reform efforts under the law.

A. Occupational Safety and Health Act

Due to the trend of increasing employee deaths and injuries in the late 1960s, ⁸ [*563] Congress enacted the Occupational Safety and Health Act (OSH Act) ⁹ in an attempt to ensure worker safety. ¹⁰ The OSH Act includes a general duty clause requiring employers to furnish their employees with a working environment free from recognized hazards. ¹¹ Violation of the general duty clause may lead to criminal sanctions in addition to the civil sanctions already required by the OSH Act. ¹² The statute also requires employers to comply with specific occupational safety and health rules promulgated by the Secretary of Labor. ¹³

While the OSH Act provides for criminal sanctions in three situations, only two have been regularly enforced. Criminal prosecutions have been initiated either when an employer's willful violation of a standard, rule, order or regulation causes the death of an employee, or when an employer makes a false representation regarding OSH Act compliance. ¹⁴ The section of the OSH Act which contemplates criminal sanctions for any person giving advance notice of an inspection has not been a source of criminal prosecutions. ¹⁵ Finally, employers may be subject to [*564] both civil fines and criminal sanctions in separate prosecutions for the same violation. ¹⁶

1. Employer's Willful Violation of Standard Causes Death

a. Elements of the Offense

Criminal violations occur when (i) an employer's; (ii) willful violation of; (iii) a specific standard, rule, order or regulation; (iv) causes the death of an employee. ¹⁷

i. Employer

For a party to be an "employer" for OSH Act purposes, an employment relationship must exist. An "employee" is statutorily defined as "an employee of an employer who is employed in a business of his employer which affects commerce." ¹⁸

In work places where multiple employers are involved, the employer who creates a hazard may be liable to others' employees, such as those of a general contract or a subcontractor. ¹⁹ Use of a general contractor or subcontractor creates an employment relationship; thus, the party controlling the work or work environment can be liable to the contractor's employees. ²⁰ Subcontractors may also be [*565] liable to others' employees, including employees of the general contractor, even if the subcontractors have not created the hazard. ²¹

In addition, corporate officers also have been criminally sanctioned under the OSH Act. ²² In the Third, Fifth and Seventh Circuits, a "mere employee" who is not an officer cannot be liable as an aider and abettor of the employer's criminal liability. ²³ The potential liability of a third party or of an employee acting in a capacity separate from his or her role as an employee who aids and abets an employer has not been resolved. ²⁴

ii. Willful Violation

A willful violation for OSH Act purposes is one involving voluntary action, done either with an intentional disregard of, or plain indifference to, the statutory [*566] requirements. ²⁵ Thus, malicious intent is not necessary to impose liability in the majority of jurisdictions, including the First, Second, Fourth, Fifth, Sixth, Seventh, ²⁶ Eighth, Ninth, Tenth, Eleventh, and District of Columbia Circuits. ²⁷

In addition, a good faith belief in compliance with alternative measures is not sufficient to avoid liability. ²⁸

iii. Specific Standard

For a violation of the OSH Act to occur, an employer must fail to comply with a specific standard, rule, order or regulation. ²⁹ The burden of proof lies with the [*567] Secretary of Labor. ³⁰ Only a few employers have been cited for willful violations absent a specific safety standard. ³¹

iv. Causes Death

Finally, for the employer to be held criminally liable, the violation must result in the death of an employee. ³²

b. Defenses

Defenses available to an employer include preemption, isolated occurrence, impossibility of compliance, greater hazard, and technical issues.

First, an employer may be able to present a defense of preemption. In 1992, the Supreme Court held that state regulation of occupational safety and health issues already regulated by a federal standard was preempted by the OSH Act. ³³ States [*568] may, however, regulate worker safety if a state plan is approved as meeting the requirements of section 18(c) of the OSH Act by the Secretary of Labor. ³⁴ Thus far, twenty-one states and two territories have received the Secretary's approval for their plans. ³⁵

Occupational Safety and Health Administration ("OSHA") regulations governing the working conditions ³⁶ of employees are themselves preempted by regulations or standards affecting occupational safety and health enacted by other federal agencies. ³⁷ Although the rationale supporting such preemption is broadly phrased, ³⁸ individual determinations based upon preemption tests often turn on specific aspects of the other agency's regulation. ³⁹

In addition to preemption, employers may have other defenses available. Employers frequently argue that the death resulted from an isolated occurrence caused by the inappropriate or unforeseeable action of a single employee. ⁴⁰ When [*569] compliance cannot be achieved, an employer may claim the defense of impossibility. ⁴¹ If the hazard of compliance with a standard is greater than that of noncompliance and there are no alternative means, an employer may argue "greater hazard." ⁴² Finally, there may be a technical defense when delay in prosecution [*570] prejudices the employer. ⁴³ Additionally, several bills pending in Congress, if enacted, would increase the affirmative defenses available to employers. ⁴⁴

2. False Representations ⁴⁵

Anyone who knowingly makes a false statement, representation or certification in any application, record, report, plan or other document filed or required to be maintained pursuant to the OSH Act may be criminally prosecuted. ⁴⁶ Such prosecution, however, is infrequently pursued. ⁴⁷

3. Penalties

To enforce the OSH Act's worker safety mandate, Congress provided for the possibility of both civil and criminal penalties. ⁴⁸ For a first conviction on a willful violation causing death to an employee, an employer faces a fine of up to $ 10,000, imprisonment for up to six months, or both. ⁴⁹ For subsequent convictions, the [*571] employer faces fines of up to $ 20,000, imprisonment for up to one year, or both. ⁵⁰ A person convicted of providing unauthorized advance notice of any inspection conducted under the OSH Act may be subjected to a fine of up to $ 1,000, imprisonment for up to six months, or both. ⁵¹ Convictions for making false representations in documentation required under the OSH Act are punished with fines of up to $ 10,000, imprisonment for up to six months, or both. ⁵² Recent Democratic attempts to increase OSHA criminal penalties were defeated along partisan lines. ⁵³

4. Enforcement

The OSH Act has drawn criticism for its limited deterrent effect on employers, ⁵⁴ due to the small number of OSH Act cases prosecuted by the Department of Justice ⁵⁵ [*572] and because of the minimal civil fines levied upon employers coupled with the use of monetary settlements in place of criminal prosecution. ⁵⁶ Criminal fines are rarely used to punish employers. ⁵⁷ To date, only two employers have been imprisoned, ⁵⁸ although sentences involving home confinement and time in halfway [*573] houses are occasionally imposed. ⁵⁹ One commentator suggested that the "knowing endangerment" provisions of the Clean Water Act ⁶⁰ and the Resource Conservation and Recovery Act ⁶¹ may be effective supplements to enforcement of the OSH Act. ⁶²

The Clinton Administration has proclaimed that it "will not tolerate a lax attitude toward worker safety and health" ⁶³ through its "New OSHA" initiative. ⁶⁴ In addition to backing up its focus on enforcement with a needed increase in funding, ⁶⁵ OSHA has provided significant incentives for those participating in the program, including decreased fines ⁶⁶ and focused inspections. ⁶⁷ There is some doubt whether the current enforcement levels will provide effective [*574] deterrence. ⁶⁸

B. State Criminal Law

State criminal sanctions against employers, which are not completely preempted by the OSH Act, can also deter criminal employment violations. The following two sub-sections discuss the effectiveness of and practices under state criminal laws.

1. Effectiveness of State Criminal Law

Although the OSH Act preempts states from regulating safety in the workplace, the OSH Act does not prohibit states from imposing certain of their own criminal sanctions against employers. ⁶⁹ The OSH Act does not preempt the application of traditional state criminal laws in the context of the workplace. ⁷⁰ For example, employers whose OSH Act violations result in death may instead be prosecuted for homicide under state criminal statutes. ⁷¹

[*575] Several commentators have asserted that state criminal laws may best serve the purposes of deterrence and punishment for workplace safety and health violations since they feel that the OSH Act and its state equivalents are currently unable effectively to deter egregious conduct by employers and because state criminal law imposes prison sentences along with fines. ⁷²

2. State Criminal Practice

Only one employer has been convicted of murder for the workplace death of an employee. ⁷³ The conviction in that case, however, was reversed because the corporation and the individual defendant were charged with legally inconsistent offenses. ⁷⁴ More frequently, prosecutors resort to state criminal law in order to convict employers who cause the deaths of their employees by charging employers with the lesser crime of manslaughter. ⁷⁵

C. Federal Mine Safety and Health Act

The Federal Mine Safety and Health Act of 1977 ("FMSHA"), ⁷⁶ protects mine worker health and safety through a combination of civil, criminal, and administrative [*576] enforcement mechanisms. A mine is broadly defined by the statute to be "an area of land from which minerals are extracted in nonliquid form or, if in liquid form, are extracted with workers underground," and also includes all private roads, tailing ponds, retention dams and other facilities associated with the mine. ⁷⁷

If a violation of the statute is found to be willful, then the operator of the mine will be both criminally ⁷⁸ and civilly liable. ⁷⁹ If the violation was not willful, then the operator can be found liable in a civil proceeding without a showing of fault. ⁸⁰

The FMSHA imposes civil and criminal liability on corporate officers, directors, and agents of a corporate operator who knowingly authorize, order, or carry out a violation, ⁸¹ though agents of non-corporate operators are not subject to any penalties under FMSHA. ⁸² Criminal liability may also attach to any person who gives advance notice of any inspection to be conducted under FMSHA; ⁸³ who knowingly makes any false statement, representation, or certification in any application, record, report, plan or other document filed or required to be maintained pursuant to FMSHA; ⁸⁴ or who distributes, sells, offers for sale, introduces, or delivers in commerce any noncomplying equipment for use in a mine, including components and accessories of such equipment, which is represented as complying with FMSHA or other relevant provisions. ⁸⁵

The Mine Safety and Health Administration ("MSHA") has a more vigorous [*577] criminal enforcement program than does OSHA, ⁸⁶ though the number of criminal referrals from the MSHA under FMSHA has fluctuated during the 1990s. ⁸⁷

III. THE FAIR LABOR STANDARDS ACT

Congress enacted the Fair Labor Standards Act ⁸⁸ ("FLSA") in 1938 to eliminate labor conditions detrimental to the nation's commerce and the general welfare of workers. ⁸⁹ By vesting the Secretary of Labor with broad investigative and enforcement powers, Congress hoped to prevent employee subrogation and to improve both labor relations and the flow of commerce. ⁹⁰

The FLSA prohibits an employer from: failing to pay minimum wage ⁹¹ or overtime compensation to an employee; ⁹² failing to keep individual work records for each employee; ⁹³ discriminating on the basis of sex by paying different wages for equal work; ⁹⁴ or using oppressive child labor. ⁹⁵ The FLSA also makes it [*578] unlawful for an employer to discharge or to discriminate against an employee due to the employee's filing of a FLSA complaint or institution of a FLSA proceeding. ⁹⁶

Further, the FLSA prohibits the transport and sale of products manufactured by employees subjected to any of the unlawful practices described above. ⁹⁷ The FLSA also includes a "hot goods" ban, which makes it an offense to purchase goods from an establishment where a FLSA violation has occurred, unless the purchase was made in good faith and without knowledge of the business's violations or unless the purchaser is the ultimate consumer. ⁹⁸

A cause of action under the FLSA preempts general federal criminal statutes. ⁹⁹ Thus, prosecution of employers for violations covered by the FLSA may proceed only under the FLSA provisions, and only penalties provided in the statute may be sought. ¹⁰⁰ However, state wage statutes are enforceable if they are not in conflict with the applicable FLSA provisions. ¹⁰¹ The FLSA specifies that its minimum wage standards are the floor, not the ceiling, and that its provisions do not excuse an employer who violates a state or federal law which may set a higher minimum wage or a shorter work week. ¹⁰²

Part A of this section reviews the elements of an FLSA offense while Part B addresses penalties under the FLSA. Part C examines enforcement of this statute.

A. Elements of the Offense

To constitute an FLSA offense punishable by criminal sanctions: (1) an employee must show that (2) the employer (3) willfully violated the Act's [*579] provisions. ¹⁰³

1. Employee

The FLSA defines an employee as any individual "employed by an employer." ¹⁰⁴ In order to determine if the employee is covered by the FLSA, the court must look first to the activities of the employee, as opposed to the business of the employer. ¹⁰⁵ The Supreme Court has frequently found an employer-employee relationship under the FLSA where one may not necessarily have existed at common law. ¹⁰⁶ To "employ" in the context of the FLSA means "to suffer or permit to work." ¹⁰⁷

The FLSA has special overtime provisions to address the unique employment conditions of domestic servants, hospital workers, fire fighters, police officers, and transportation workers. ¹⁰⁸ To encourage the employment of certain individuals [*580] traditionally denied opportunities to work, the FLSA also provides for the issuance of special certificates authorizing work at lower wages. These individuals may include learners and apprentices, students, and handicapped workers. ¹⁰⁹ Since independent contractors are not considered employees for FLSA purposes, it is important to note the factors which distinguish them from employees. In determining whether a worker is an "employee" as opposed to an independent contractor, courts look to the amount of control and supervision exercised by the employer over the work of the individual concerned. ¹¹⁰ If that control is extensive, the worker will be considered an employee. ¹¹¹ There is no bright line rule for determining whether an individual is an independent contractor or employee under the FLSA; instead, a case-by-case determination is necessary. ¹¹²

The FLSA further provides that "any employee employed in a bona fide executive, administrative, or professional capacity" is exempt from the overtime [*581] provisions of the FLSA. ¹¹³ The Wage and Hour Division of the Department of Labor has promulgated regulations and interpretations to use in determining whether an employee fits into one of these exemptions. ¹¹⁴

2. Employer

The FLSA defines an employer as "any person acting directly or indirectly in the interest of an employer in relation to an employee...." ¹¹⁵ The Supreme Court has characterized the FLSA's statutory definition of "employer" as the "broadest ... that has ever been included in any one act." ¹¹⁶ An employer can be an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons. ¹¹⁷ In addition to the corporation itself, a corporate officer with operational control is considered an employer and can be held jointly and severally liable under the FLSA for unpaid wages. ¹¹⁸ Such corporate officers are liable in their individual rather than their representative capacities. ¹¹⁹

The FLSA provisions apply to both individual employers and to employers constituting an "enterprise." ¹²⁰ The statute covers individual employers in "industries engaged in commerce or in the production of goods for commerce." ¹²¹ Liability applies to individual business entities if they constitute an "enterprise" where related activities are performed through a unified operation or where there exists common control for a common business purpose. ¹²² A significant amount of litigation has been devoted to determining which businesses constitute enterprises [*582] within the meaning of the statute. ¹²³

The definition of employer excludes any person acting as an officer or agent of a labor organization and the labor organization itself, except when it acts in the capacity of an employer. ¹²⁴ The situation of the labor organization is unique in that criminal, but not civil, remedies may be sought against it: § 216(a) provides for criminal penalties for willful violations by "any person," ¹²⁵ while § 216(b) allows for the maintenance of a civil action for monetary damages against "any employer." ¹²⁶ The FLSA, therefore, does not provide for private actions by employees against a labor union. ¹²⁷ The Act provides for enforcement against labor organizations by either injunctive proceedings instituted by the Secretary of Labor under § 217 or by criminal prosecutions for willful violations under § 216(a). ¹²⁸

3. Willful Violation

In order to be subject to criminal sanctions under the FLSA, an employer must be shown to have willfully violated its provisions. ¹²⁹ A violation of the FLSA is willful if the employer either knew of the illegality of its conduct or showed reckless disregard for such illegality. ¹³⁰ Thus, a violation is "willful" if the [*583] employer knew of the FLSA requirements ¹³¹ and took affirmative steps to conceal the violation. ¹³² However, where an employer can show that it has made an effort to find out how the FLSA applies to its business, it is less likely to be found to have willfully violated the statute. ¹³³ If an employer's violation resulted from good faith reliance on a ruling, interpretation, or enforcement policy, then the employer may not be guilty of a criminal violation. ¹³⁴

B. Penalties

The criminal penalties for violations of the FLSA are outlined in § 216(a): ¹³⁵ "Any person who willfully violates any of the provisions of section 215 [of the FLSA] shall upon conviction thereof be subject to a fine of not more than $ 10,000, or to imprisonment for not more than six months, or both." ¹³⁶

C. Enforcement

The Secretary of Labor may utilize several different methods to evaluate an employer's performance under the FLSA. A special Wage and Hour Division was created in the Labor Department to allow the Administrator and the Secretary to make periodic investigations and reports in order to keep the law up to date and to detect violations. ¹³⁷ The Division may compel the attendance of witnesses at [*584] hearings ¹³⁸ or the production of records during an investigation. ¹³⁹ It may also require an employer to keep records of its employees and to make those records available to the Administrator. ¹⁴⁰ Moreover, the Division is empowered to determine the applicability of exemptions from certain provisions of the FLSA. ¹⁴¹ The Secretary may also sue to restrain violations and, to a limited extent, to recover unpaid benefits on behalf of employees. ¹⁴²

An employer has no privilege against production of its records and, therefore, has no right against self-incrimination in this context. ¹⁴³ The Administrator has the authority to investigate by obtaining access to records without a prehearing on whether an employer is subject to the FLSA. ¹⁴⁴ Moreover, an employee bringing a wage suit is entitled to inspect the employer's wage and hour records pertaining solely to that employee. ¹⁴⁵ The FLSA also provides for a variety of civil proceedings to enforce compliance with its requirements. ¹⁴⁶

IV. PAYMENT OR LOANS BY EMPLOYER TO EMPLOYEES OR LABOR ORGANIZATIONS

In 1984, Congress amended § 302 of the Taft-Hartley Act ¹⁴⁷ ("the LMRA") in [*585] order to provide labor unions and their members greater protection from corrupt union and management officials by elevating the offense of bribery or payoff of employees, labor representatives, or organizations from a misdemeanor to a felony. ¹⁴⁸ The amendments provide that such payments or loans by employers are criminal ¹⁴⁹ only if made willfully and, in certain circumstances, ¹⁵⁰ with the intent to benefit the employer or other persons. ¹⁵¹ Under the LMRA, it is illegal for any employer in an industry affecting commerce ¹⁵² to pay anything of value to representatives of its employees or to union officials. ¹⁵³ The LMRA also prohibits [*586] employees and union representatives from accepting such payments. ¹⁵⁴ The statute prohibits all such payments but enumerates nine exceptions. ¹⁵⁵

A. Elements of the Offense

To constitute an offense punishable by criminal sanctions under the LMRA: (1) an employer must (2) willfully pay or lend (3) money or another thing of value (4) to any representative of its employees (5) or an employee or representative of employees must willfully request or receive such thing of value. ¹⁵⁶

1. Employer

The LMRA's definition of an "employer" includes any person acting as an agent of an employer. ¹⁵⁷ The statute specifically excludes federal or state governments or their subdivisions, the Federal Reserve Bank, employers subject to the Railway Labor Act, and labor organizations from the definition of "employer." ¹⁵⁸ Private companies who perform municipal functions are also excluded. ¹⁵⁹ Prohibited payments made by an employer via a non-employer private corporation, [*587] however, are sufficient to constitute a violation of the statute. ¹⁶⁰

2. Willfulness

Willfulness is required for a court to find a criminal violation of the LMRA. ¹⁶¹ Most circuits which have ruled on the definition of willfulness in the context of § 302(d) have held that a finding of general intent that the defendant knowingly committed the act in question is sufficient to satisfy this element of the offense. ¹⁶² The Seventh Circuit, however, has held that a finding of willfulness requires proof of specific intent; the defendant must know he or she is violating a law. ¹⁶³ Mutuality of guilt is not necessary for a conviction under LMRA. ¹⁶⁴

3. Money or Thing of Value

The terms "money" and "thing of value" are to be construed as distinct terms. ¹⁶⁵ "Thing of value" includes benefits flowing from the use of monetary payments. ¹⁶⁶ Courts have interpreted what constitutes a thing of value broadly. ¹⁶⁷

[*588] 4. Representative of an Employee

The LMRA broadly defines the term "employees" to include almost everyone within the common meaning of the term. ¹⁶⁸ Certain employees are not covered, however, including: managers, ¹⁶⁹ full-time faculty members of private universities, ¹⁷⁰ supervisors, ¹⁷¹ confidential employees, ¹⁷² agricultural workers, ¹⁷³ domestic workers, ¹⁷⁴ employees covered by the Railway Labor Act, ¹⁷⁵ and independent contractors. ¹⁷⁶ "Representative of employees" includes any person authorized by employees to act for them in dealings with their employer and is not limited to a bargaining representative. ¹⁷⁷

[*589] 5. Requests or Receives

Section 302(b) makes it unlawful for any person to request, demand, receive, accept, or agree to receive or accept, any payment, loan, or delivery of any money or other thing of value prohibited by § 302(a). ¹⁷⁸ Violations under this section include requesting unearned pension benefits, ¹⁷⁹ accepting kickbacks or other payoffs, ¹⁸⁰ and receiving payments as a labor consultant while employed as a union official. ¹⁸¹ Each receipt of a thing of value can constitute a separate offense. ¹⁸²

B. Exceptions

Section 302(c) contains nine exceptions to the provisions of LMRA. ¹⁸³ The first three exceptions ¹⁸⁴ describe payments that do not have the potential for corrupting the labor movement. ¹⁸⁵ The first exception involves payments to an employee who acts openly as a representative of the employer in labor relations and compensation to an employee for services rendered. ¹⁸⁶ The second exception involves payments [*590] made in satisfaction of a judgment of any court, a decision or award of an arbitrator or impartial chairperson, or payments for the settlement of claims or disputes. ¹⁸⁷ The third exception includes payments for the purchase of a product at the prevailing market price in the regular course of business, ¹⁸⁸ where the buyer and seller satisfy the employer-employee relationship covered by the statute. ¹⁸⁹

The last six exceptions ¹⁹⁰ describe payments that are believed to have the potential to corrupt the labor movement unless LMRA's protective requirements are met. ¹⁹¹ Section 302(c)(4) exempts money deducted from the wages of an employee to pay membership dues to a labor organization, but only if the employee has given written approval. ¹⁹² The next four exceptions, found in § 302(c)(5)-(8), exempt money or other things of value paid to a trust fund established by a representative of employees for the sole and exclusive benefit of the employees and their families and dependents, including trusts for the purposes of vacation, severance or holiday benefits, scholarships, child care and housing funds, and legal service funds, under certain conditions. ¹⁹³ Employers and employees must be equally represented among the trustees who administer such trusts. ¹⁹⁴

[*591] The four exemptions found in § 302(c)(5)-(8) together with the exemption in § 302(c)(9), which covers funds paid to a labor-management committee established for the purposes of the Labor Management Cooperation Act of 1978, ¹⁹⁵ define payments from management representatives to labor representatives that are legal so long as the LMRA's technical requirements are met. ¹⁹⁶ Violations of § 302(c)(4)-(9) are subject to the enforcement provisions in § 302(d)(1), which require both willfulness and the intent to wrongfully benefit another person or to personally benefit oneself. ¹⁹⁷ Other violations of LMRA require only willfulness in order for the defendant to be subject to criminal penalties. ¹⁹⁸

C. Penalties

Violation of any part of LMRA is a felony punishable by a fine of not more than $ 15,000; imprisonment for not more than five years; or both, if the money or thing of value involved in the crime is worth more than one thousand dollars. ¹⁹⁹ If the value of the money or other thing involved is less than one thousand dollars, the violation is a misdemeanor punishable by a fine of $ 10,000; imprisonment of one year; or both. ²⁰⁰

In addition, federal courts have jurisdiction to restrain violations of LMRA by eliminating any features in the structure or operation of a trust that would cause it to fail to qualify for a § 302(c)(5) exception. ²⁰¹ However, federal courts do not [*592] have the power to issue injunctions against a trust fund or its trustees to force it to comply with the standards delineated in the LMRA. ²⁰²

V. PROTECTING UNION FUNDS UNDER THE LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT

In 1959, Congress enacted the Labor-Management Reporting and Disclosure Act ²⁰³ ("LMDRA") in response to investigations which revealed corrupt and unethical management of some labor unions. ²⁰⁴ Section 501(c) of the LMRDA penalizes appropriations of union funds for non-union purposes by creating a new statutory crime whose scope extends beyond the common-law offense of larceny and the old statutory crime of embezzlement ²⁰⁵ to include nearly every kind of taking. ²⁰⁶

This provision prohibits an officer or an employee of a union from embezzling, stealing, abstracting or converting the assets of the union to his own use, or to the use of another. ²⁰⁷ The provision also subjects officers or employees to criminal sanctions for passively accepting unauthorized funds. ²⁰⁸ Actual or good faith belief in union benefit or authorization, as well as accident and mistake are available defenses to fraudulent intent.

A. Elements of the Offense

A violation of § 501(c) of the LMRDA occurs where: (1) an officer or employee of a union (2) engages in the appropriation of union assets for his own or another's purpose (3) with fraudulent intent. Depending on the circuit, demonstrating the lack of a benefit to the union or the lack of union authorization may also be [*593] necessary. ²⁰⁹

1. Officer or Employee

Section 501(c) of the LMRDA applies to those who are officers of, or who are employed by, a labor organization. Courts have interpreted the terms "officer" and "employed by" broadly to assure the protection of union funds. Any elected officer of a union, no matter how ceremonial the post, is subject to the LMRDA. ²¹⁰ An individual who has designated duties as representative of the union, albeit not elected by union members, is also an officer for purposes of prosecution under § 501(c). ²¹¹ In addition to conventional employees on the union payroll, those hired by a union as independent contractors may also be "employed by" the union within the meaning of the statute. ²¹² Courts have also refused to limit the statute to those who have a fiduciary relationship within the union. ²¹³

2. Appropriation of Union Assets for One's Own or Another's Purpose

Under § 501(c), an appropriation occurs when a union employee deprives the union of funds which belong solely to the union. ²¹⁴ Four means of appropriation are prohibited by the statute; embezzling, stealing, unlawfully and willfully abstracting, and unlawfully and willfully converting. ²¹⁵ Indirect and direct methods of accomplishing such takings are treated equally by courts and prohibited under the statute. ²¹⁶

Courts have given a broad interpretation to the definition of "union assets" to [*594] include almost all property associated with a union. ²¹⁷ However, moneys which a union employee earns in a private capacity are not classified as union assets. ²¹⁸ The prosecution must also prove that the union employee took union assets for his own use or the use of another, rather than a union purpose. Circumstantial evidence may be used to draw an inference that money was expended for a non-union purpose. ²¹⁹ At trial, the evidence will be viewed by the court in the light most favorable to the government. ²²⁰

3. Fraudulent Intent

Courts generally require a showing that the union employee acted with fraudulent intent. ²²¹ The defendant must have acted willfully, with the knowledge he was acting unlawfully, and not by mistake. ²²² Since the concept of intent reflects a subjective state of mind that can not be established solely upon objective proof, the prosecution must demonstrate, on the basis of all available evidence, that the union employee acted knowing his conduct was wrong under the circumstances. ²²³

[*595] 4. Lack of Benefit to Union or Lack of Union Authorization

Although there are some differences in how the circuit courts treat the elements of union benefit and lack of union authorization in determining fraudulent intent under § 501(c), there seems to be a trend toward treating these elements as parts of a whole picture rather than as distinct essential elements to the offense.

While the First and Fourth Circuits favor the union authorization approach, ²²⁴ the Second Circuit places equal weight on both union authorization and benefit. ²²⁵ The Sixth Circuit has placed a lower burden of proof on the government, requiring only a showing that the defendant did not in good faith believe the expenditure would legitimately benefit the union. ²²⁶

Where expenditures are unauthorized, courts generally have held that the prosecution need only prove a lack of proper union authorization. ²²⁷ The Third, Seventh, Eighth, and Ninth Circuits have offered an alternative view: a lack of union authorization and a lack of a good faith belief in union benefit bear upon fraudulent intent, but are not distinct elements of a LMRDA offense. ²²⁸

B. Defenses

Although it is unclear whether union benefit, union authorization, or good faith belief in union authorization or benefit are elements of the LMRDA offense, these theories may serve as successful defenses for defendants seeking to negate the fraudulent intent requirement at the crux of the offense. ²²⁹ Theories of mistake or accident can also serve as defenses. ²³⁰

[*596] C. Penalties

Violation of LMRDA is a felony punishable by a fine of not more than $ 10,000, or imprisonment for not more than five years, or both. ²³¹ Separate violations of the LMRDA constitute separate offenses, unless the violations constitute a single course of conduct. ²³²

FOOTNOTES:

n1 29 U.S.C. §§ 651-678 (1994 & Supp. 1995).

n2 30 U.S.C. §§ 801-962 (1994 & Supp. 1995).

n3 Fair Labor Standards Act of 1938, ch. 676, § 1, 52 Stat. 1060 (codified as amended in various sections of 29 U.S.C.).

n4 Labor Management Relations (Taft-Hartley) Act § 302, 29 U.S.C. § 186 (1994 & Supp. I 1995). See generally Labor Management Relations (Taft-Hartley) Act, 29 U.S.C. §§ 141-197 (1994) (providing all provisions of this Act).

n5 29 U.S.C. § 501(c) (1994). See generally Labor Management Reporting and Disclosure Act 29 U.S.C. §§ 401-531 (1994).

n6 29 U.S.C. §§ 651-678 (1994 & Supp. I 1995).

n7 30 U.S.C. §§ 801-962 (1994).

n8 See S. REP. NO. 91-1282, at 2 (1970) (stating legislative history and purpose of OSH Act).

n9 29 U.S.C. §§ 651-678 (1994 & Supp. I 1995).

n10 The Act states, "the Congress declares it to be its purpose and policy ... to assure so far as possible every working man and woman in the Nation safe and healthful working conditions ...." 29 U.S.C. § 651(b)(1994); cf. Industrial Union Dep't, AFL-CIO v. American Petroleum Inst., 448 U.S. 607, 646 (1980) (reasoning that legislative history of OSHA "supports the conclusion that Congress was concerned, not with absolute safety, but with elimination of significant harm").

n11 Under OSHA regulations the duties of employers and employees are as follows:

(a) Each employer-- (1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees; (2) shall comply with occupational safety and health standards promulgated under this chapter.

29 U.S.C. § 654(a)(1994 & Supp. I 1995); see also United States v. Sturm, Ruger & Co. Inc. 84 F.3d 1, 3-6 (9th Cir. 1994) (holding that under the OSH Act's general duty clause OSHA may issue subpoenas to determine if ergonomic hazards constitute "general hazards"); Pratt & Whitney Aircraft v. Secretary of Labor, 649 F.2d 96, 99-101 (2d Cir. 1981) (recognizing that a potential hazard may fit under the definition of the term "recognized hazards" as described by the legislative history, and requiring employers to rid workplaces of such hazards or face an OSH Act violation).

n12 29 U.S.C. § 666(a) (1994); see Sturm, Ruger & Co., 84 F.3d at 5 (holding that OSHA has the authority to investigate violations of the general duty clause); In the Matter of Establishment Inspection of the Kelly-Springfield Tire Co., 13 F.3d 1160, 1167 (7th Cir. 1994) (stating that if the Secretary has not yet promulgated a specific regulation dealing with an alleged harm, an employee complaint alleging violations of the general duty clause is sufficient to provide cause for an inspection); Reich v. Montana Sulphur & Chem. Co., 32 F.3d 440, 445 (9th Cir. 1994) (finding that absent specific regulations, OSHA may still investigate violation of general duty clause).

n13 29 U.S.C. § 654(a)(2) (1994). Compliance with specific standards may not excuse employer from obligations of general duty clause. See Montana Sulphur, 32 F.3d at 445 (holding that specific regulations promulgated by the Secretary of Labor do not displace OSHA's obligation to enforce the general duty clause as a minimum standard); International Union, United Auto., Aerospace & Agric. Implement Workers of Am. v. General Dynamics Land Sys. Div., 815 F.2d 1570, 1577 (D.C. Cir. 1987) (holding that compliance will not discharge general duty if employer knows that a standard will not protect employees against hazard).

n14 See CRIMINAL REFERRALS BY OSHA TO DOJ OR US ATTORNEYS (Dec. 18, 1996; updated periodically by the Dep't of Labor, Washington, D.C.) [hereinafter CRIMINAL REFERRALS] (suggesting prosecutions when employer's willful violation causes employee's death and when false statements are given).

n15 See id. (listing no referrals pursuant to 29 U.S.C. § 666(f) (1994)).

n16 See United States v. J & T Coal, Inc., 818 F. Supp. 925, 926 (W.D. Va. 1993) (holding that a civil fine did not amount to "punishment" precluding a criminal prosecution for purposes of Double Jeopardy provision of Fifth Amendment), aff'd sub nom. United States v. Williams, 56 F.3d 63 (4th Cir. 1995) (unpublished table decision) (per curiam), cert. denied, 116 S. Ct. 2579 (1996). Cf. S.A. Healy Co. v. Occupational Safety & Health Rev. Comm'n, 96 F.3d 906, 908 (7th Cir. 1996) (holding that civil penalties assessed by Review Commission violated Fifth Amendment double jeopardy prohibition against second prosecution for same crime of offense after prior criminal prosecution) cert. granted, judgment vacated by Herman v. Healy, 118 S. Ct 623 (1997) (remanding for reconsideration in light of Hudson v. United States, 118 S. Ct. 488, 488 (holding the "double jeopardy clause protects only against imposition of multiple criminal punishments for same offense when such occurs in successive proceedings")).

n17 29 U.S.C. § 666(e) (1994).

n18 29 U.S.C. § 652(6) (1994).

n19 See Anthony Crane Rental, Inc. v. Reich, 70 F.3d 1298, 1305 (D.C. Cir. 1995) (quoting and affirming an Occupational Safety and Health Review Commission ("OSHRC") decision that held the appellant responsible under the "multi-employer doctrine" which states that "an employer at a multi-employer construction worksite is responsible ... in the absence of exposure of its own employees, for any hazardous conditions which it creates or controls"); Teal v. E.I. du Pont de Nemours & Co., 728 F.2d 799, 804-05 (6th Cir. 1984) (adopting the multi-employer doctrine based on the duty clause provided in 29 U.S.C. § 654(a) and the legislative purpose of the OSH Act); Beatty Equip. Leasing, Inc. v. Secretary of Labor, 577 F.2d 534 (9th Cir. 1978) (same); Marshall v. Knutson Constr. Co., 566 F.2d 596 (8th Cir. 1977) (same); United States v. Pitt-DesMoines, Inc., No. 96-CR513, 1997 WL 403674, at *2 (N.D. Ill. July 15, 1997) (applying the multi-employer doctrine to a criminal case brought under 29 U.S.C. § 666(e) to conclude that an "employee" for purposes of the OSH Act includes all employees who work at a particular job site). But see Melerine v. Avondale Shipyards, Inc., 659 F.2d 706, 710-12 nn. 15-17 (5th Cir. 1981) (rejecting the multi-employer doctrine based on the legislative history and text of statute).

n20 See Carlisle Equip. Co. v. OSHRC, 24 F.3d 790, 794 (6th Cir. 1994) (finding that employment relationship existed between primary contractor and employee of secondary contractor where primary contractor could have detected a violation and had authority to refuse execution of work where a violation was clear); Loomis Cabinet Co. v. OSHRC, 20 F.3d 938, 942 (9th Cir. 1994) (finding employment relationship existed between employee and owner, after evaluating control over the work environment, where contractor provided only labor while owner provided all other business services); Teal, supra at n. 19, 728 F.2d at 804 (holding the person with control of workplace liable under specific duty clause). But see Richard v. Cornerstone Constructors, Inc., 921 S.W.2d 465 (Tex. App. 1996) (holding that general contractor did not have a duty to a subcontractor's employee where the contract stipulated that subcontractors would provide all materials and tools for the job); Canape v. Petersen, 897 P.2d 762 (Colo. 1995) (stating that general duty does not extend to subcontractor's employee).

n21 See Kane v. J.R. Simplot Co., 60 F.3d 688, 694-95 (10th Cir. 1995) (holding that owner does not have duty to comply with OSH Act regulations when a subcontractor has control over all aspects of means, manner, and method of performance of work and owner only keeps right of inspection); A/C Elec. Co. v. OSHRC, 956 F.2d 530, 530 (6th Cir. 1991) (holding that subcontractors may also be liable for violations of the OSH Act).

n22 See United States v. Cusack, 806 F. Supp. 47, 51 (D.N.J. 1992) (holding that officer or director's role may be so pervasive and total that he is in fact the corporation and thus subject to OSH Act criminal penalties for his violation); CRIMINAL REFERRALS, supra note 14 (Quality Tower (Aug. 1995) (ruling that Mark Pyron was subject to three months of house arrest, $ 7,500 fine and 300 hours of community service and three years probation following a hoist failure); MIT Tank Wash (June 1995) (ruling that Frederick Picco was obligated to serve 1 year of probation and other conditions following an incident which included an assault of compliance officer); Quality Steel (Dec. 1992) (ruling that corporate officer John Cusack, who pled guilty to OSH Act violation, was subject to 3 years probation, $ 2,500 fine, 200 hours community service); Master Metals (Oct. 1990) (ruling that Douglas Mickey, who pled guilty, was subject to four months in a halfway house, four months home confinement, two years probation, a $ 15,000 fine, and 400 hours community service; ruling that P. Howard, who pled guilty, was subject to one year probation, 180 days home confinement, $ 5,000 fine); Underground Util. (Jan. 1990) (ruling that a guilty plea subjected defendant to a $ 7,500 fine, four-month suspended sentence, and probation following a trenching incident); Elliot Plumbing & Heating (Sept. 1989) (ruling that corporate defendant who pled guilty was subject to six-month sentence (suspended except for 45 days) and three years probation following a trench collapse)).

n23 See United States v. Shear, 962 F.2d 488, 490 (5th Cir. 1992) (determining that Congress did not intend to subject employees to aiding and abetting liability under the OSH Act); United States v. Doig, 950 F.2d 411, 412-14 (7th Cir. 1991) (relying on legislative history that places onus of workplace safety on employers, the court held that an employee who is not a corporate officer cannot be sanctioned under § 666(e)); Atlantic & Gulf Stevedores v. OSHRC, 534 F.2d 541, 553 (3d Cir. 1976) (finding that OSHRC or Secretary of Labor does not have power to sanction employees for disregarding safety standards and Commission orders). But see Buhler v. Marriott Hotels, 390 F. Supp. 999, 999-1000 (E.D. La. 1974) (disavowing ruling in Skidmore v. Travelers Ins. Co., 356 F. Supp. 670, 672 (E.D. La. 1973) that OSH Act imposed duties only on employer).

n24 See Shear, 962 F.2d at 496 (stating that the holding did not address "the situation where ... an employee acting in some other capacity is charged with aiding and abetting an employer's violation of section 666(e)").

n25 See Conie Constr. v. Reich, 73 F.3d 382, 384 (D.C. Cir. 1995) (determining that employer knowledge of and disregard for OSHA excavation requirements constituted plain indifference or intentional disregard and therefore, amounted to a willful violation); RSR Corp. v. Brock, 764 F.2d 355, 362-3 (5th Cir. 1985) (finding that employer's payments of "medical removal protection benefits" to an escrow account rather than directly to workers was a willful violation of OSHA's lead standard); accord Reich v. Trinity Indus. Inc., 16 F.3d 1149, 1155 (11th Cir. 1994) (deciding that an employer who knows standards and intentionally disregards them is guilty of a willful violation regardless of good faith belief in alternative measures).

n26 The Seventh Circuit has not definitively decided this issue; however, lower courts have generally sided with the majority's conception of willfulness. See Bradford v. Muinzer, 498 F. Supp. 1384, 1391 (N.D. Ill. 1980) (adopting the view that for an act to be willful under civil statutes, it need not include a requirement of a bad purpose or an evil motive).

n27 See Reich v. Trinity Indus., Inc., 16 F.3d 1149, 1152 (11th Cir. 1994) (holding that the definition of willful is "an intentional disregard of, or plain indifference to, OSHA requirements," as previously articulated in Fifth Circuit); Brock v. Morello Bros., 809 F.2d 161, 164 (1st Cir. 1987) (finding that willfulness requires showing that employer knew of standard, violation was voluntary, and done with either intentional disregard or plain indifference to OSH Act); Donovan v. Capital City Excavating Co. Inc., 712 F.2d 1008, 1010 (6th Cir. 1983) (holding that no showing of malicious intent is necessary for a finding of a "willful" violation of the OSH Act); Schonbek & Co. v. Donovan, 646 F.2d 799, 800 (2d Cir. 1981) (adopting the administrative definition of willfulness that does not include a finding of malicious intent); Georgia Elec. Co. v. Marshall, 595 F.2d 309, 319 (5th Cir. 1979) (adopting OSHRC's definition of a willful violation as "one involving voluntary action, done either with an intentional disregard of, or plain indifference to, the requirements of the statute"); National Steel & Shipbuilding Co. v. OSHRC, 607 F.2d 311, 314 (9th Cir. 1979) (adopting the majority rule not requiring a bad motive to find an OSH Act violation because it "better serves the congressional objectives in enacting OSHA and better reflects the statute"); Western Waterproofing Co., Inc. v. Marshall, 576 F.2d 139, 142-43 (8th Cir. 1978) (adopting standard for willfulness, as applied in Fourth, Tenth, and First Circuits, that requires no finding of malicious intent to establish a violation of OSH Act); Cedar Constr. Co. v. OSHRC, 587 F.2d 1303, 1305 (D.C. Cir. 1978) (endorsing a definition of willfulness that did not include a requirement of malicious intent for a finding of an OSH Act violation); Inter-County Constr. Co. v. OSHRC, 522 F.2d 777, 779-80 (4th Cir. 1975) (finding that a willful violation will be upheld where employer failed to shore up trench as required by OSHA regulation; showing of malicious intent is not necessary); United States v. Dye Constr. Co., 510 F.2d 78, 81-82 (10th Cir. 1975) (holding that no showing of malicious intent is necessary for a finding of a criminal violation of the OSH Act). But see Frank Irey, Jr., Inc. v. OSHRC, 519 F.2d 1200, 1207 (3d Cir. 1975) (en banc) (requiring a showing of knowing, conscious, deliberate flaunting of OSH Act to support finding of willful violation of standard), aff'd. on other grounds sub nom. Atlas Roofing Co., Inc. v. OSHRC, 430 U.S. 442 (1977).

n28 See Interstate Erectors Inc. v. OSHRC, 74 F.3d 223, 226 (10th Cir. 1996) (holding that compliance with alternative methods that were considered "industry practice" was not sufficient to relive employer from liability or to remove the classification of "willful" from violations); Western Waterproofing Co., 576 F.2d at 142-43 (same). But see Century Steel Erectors Inc. v. Dole, 888 F.2d 1399, 1405 (D.C. Cir. 1989) (holding that Secretary of Labor has burden of overcoming employer's evidence that compliance with industry standard and practice was practical).

n29 29 U.S.C. § 666(e) (1994); supra note 17 (setting forth duty of employer to comply with specific standards).

n30 See Carlisle Equip. Co. v. OSHRC, 24 F.3d 790, 792-93 (6th Cir. 1994) (holding that Secretary of Labor must show by preponderance of evidence that standard applies to facts, requirements of standard were not met, employees had access to hazardous condition, and employer knew or could have known of hazardous condition with exercise of due diligence).

n31 See, e.g., Martin v. OSHRC, 941 F.2d 1051, 1054 (10th Cir. 1991) (finding a willful violation based on coke oven emissions standards covering respirator programs); Mineral Indus. & Heavy Constr. Group v. OSHRC, 639 F.2d 1289, 1291 (5th Cir. 1981) (finding a willful violation based on earthmoving equipment regulation); Universal Auto Radiator Mfg. Co. v. Marshall, 631 F.2d 20, 21 (3d Cir. 1980) (finding a willful violation based on "point of operation guard" regulation); Kent Nowlin Constr. Co. v. OSHRC, 593 F.2d 368, 372 (10th Cir. 1979) (finding a willful violation based on trenching regulations); Cedar Constr. Co., 587 F.2d at 1304 (same); Intercounty Constr. Co., 522 F.2d at 778 (same); F.X. Messinca Constr. Corp. v. OSHA, 501 F.2d 701, 702 (1st Cir. 1974) (same). But see Babcock & Wilcox Co. v. OSHRC, 622 F.2d 1160, 1161 (3d Cir. 1980) (vacating a finding of willfulness in a violation of the general duty clause of the OSH Act); Empire-Detroit Steel Div. v. OSHRC, 579 F.2d 378, 380 (6th Cir. 1978) (same).

n32 29 U.S.C. § 666(e) (1994). See, e.g., Secretary of Labor v. C & S Erectors Inc., No. 96-1525, 1997 WL 566273 (O.S.H.R.C. Sept. 9, 1997) (reporting on pending criminal investigation following the death of an employee); Mine Owner Pleads Guilty to Violations that Resulted in Explosions Which Killed Two, 26 O.S.H. Rep. (BNA) 61 (June 19, 1996) (employee died after asphyxiation in steel pipe); Alaska Contractor to Be Cited for Negligent Homicide of Employee, 26 O.S.H. Rep. (BNA) 5 (June 5, 1996) (employees killed in mine collapse); North Carolina Company Enters Plea to Criminal Charge of Willful OSH Act Breach, 24 O.S.H. Rep. (BNA) 1147 (Oct. 26, 1994) (worker at Petroleum Tank Services Inc. killed when excavation collapsed); Candy Manufacturer Pleads Guilty to Willful Violation Charge OSHA Says, 24 O.S.H. Rep. (BNA) 1019 (Oct. 12, 1994) (employee of Falcon Candy Co. killed by unguarded rotating parts of machine); Legality of Civil Penalty Following Criminal Case Argued Before Commissioners, 23 O.S.H. Rep. (BNA) 1729 (May 4, 1994) (three employees of S.A. Healy Co. killed by methane explosion).

n33 Gade v. National Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 96-99 (1992). In Gade, OSHA had promulgated regulations governing hazardous waste operations including detailed regulations on worker training requirements. While OSHA's hazardous waste regulations were in effect, Illinois passed laws intended to protect employees and the general public by licensing hazardous waste equipment operators and laborers working at certain facilities. Id. at 92-94. The Court ruled that, in the absence of an approved plan, state statutes which "directly, substantially, and specifically" concern worker safety are preempted by the OSH Act even where the legislature has advanced another purpose for the law. Id. at 107. See generally Amelia Jean Uelmen, Trashing State Criminal Sanctions?: OSHA Preemption Jurisprudence in Light of Gade v. National Solid Wastes Management Association, 30 AM. CRIM. L. REV. 373 (1993) (discussing preemption issues with respect to state criminal sanctions for violation of safety and health standards).

n34 See Gade, 505 U.S. at 103-04 (finding that Congress sought to promote occupational health and safety while avoiding "duplicative, and possibly counterproductive regulation," thus preempting stricter state law unless the Department of Labor had approved the state's plan).

n35 See 29 C.F.R. § 1952 (1997) (listing the 23 states and territories with fully approved plans: Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, the Virgin Islands, Washington, and Wyoming). Connecticut and New York each have partial plans specifically for development and enforcement of state standards applicable only to state and local government, but not to private employers. 29 C.F.R. § 1956 (1997).

n36 Courts have defined working conditions as follows: see United Energy Servs. v. Federal Mine Safety & Health Admin., 35 F.3d 971, 977 (4th Cir. 1994) (defining "working conditions" as "the environmental area in which an employee customarily goes about his daily tasks"); PBR, Inc. v. Secretary of Labor, 643 F.2d 890, 896 (1st Cir. 1981) (defining "working conditions" as "surroundings or hazards"); Columbia Gas of Pa. v. Marshall, 636 F.2d 913, 916 n.8 (3d Cir. 1980) (defining "working conditions" as "environmental area"); Southern Pac. Transp. Co. v. Usery, 539 F.2d 386, 391 (5th Cir. 1976) (defining "working conditions" as "surroundings or hazards"); see also In re Inspection of Norfolk Dredging Co., 783 F.2d 1526, 1530-31 (11th Cir. 1986) (adopting surroundings or hazards standard through reliance on Southern Pacific Transportation Co.).

n37 29 U.S.C. § 653(b)(1) (1994).

n38 Reich v. Muth, 34 F.3d 240, 242-44 (4th Cir. 1994). The Muth court stated that the preemption provision aims to prevent wasteful duplication by:

wisely ceding responsibility for occupational standards in particularized fields to the regulatory bodies specifically tasked with their oversight and control, while leaving to OSHA the remaining general field of regulation outside specialized areas demanding specialized expertise .... OSHA regulatory authority is displaced where the factual situation involves otherwise overlapping regulation of a single workplace and a single workforce. In contrast, where differing workforces occupy a single space at separate times, and where each workforce is clearly regulated in its "natural" environment by a separate regulatory body, OSHA's regulatory power is not displaced as to the workers who otherwise fall within its ambit.

Id. at 243-44; see also Cleveland Elec. Illuminating Co. v. OSHRC, 910 F.2d 1333, 1335 (6th Cir. 1990) (applying OSH Act standards to a given working condition unless preempted by corresponding industry-specific standards).

n39 Compare United Energy Servs., 35 F.3d at 977 (holding that OSHA's regulatory jurisdiction over coal mine operations was preempted by the FMSHA, 30 U.S.C. § 801-962 (1994)) with Muth, 34 F.3d at 243-44 (determining that OSHA's regulatory power was not preempted by U.S. Coast Guard regulations) and Reich v. Nelson, 843 F. Supp. 20, 24-25 (E.D. Pa. 1994) (same).

n40 See P. Gioioso & Sons, Inc. v. OSHRC, 115 F.3d 100, 109 (1st Cir. 1997) (holding that to assert an effective unforeseeable employee conduct defense, employer must demonstrate that it established a safety rule, communicated the rule to employees, took steps to discover noncompliance, and enforced the rule when it was violated); D.A. Collins Constr. Co., Inc. v. Secretary of Labor, 117 F.3d 691, 695 (2d Cir. 1997) (allowing the use of unforeseeable employee misconduct as affirmative defense; however, employer was not able to sustain his burden after Secretary of Labor demonstrated a prima facie case of an OSH Act violation); New York State Elec. & Gas Corp. v. Secretary of Labor, 88 F.3d 98, 106 (2d Cir. 1996) (holding that although defense has burden of asserting affirmative defense of unpreventable employee conduct, burden likewise cannot be shifted to employer to demonstrate knowledge of alleged safety violation); Valdak Corp. v. OSHRC, 73 F.3d 1466, 1469 (8th Cir. 1996) (holding that affirmative defense of unforeseeable employee conduct was not sufficiently established by employer because no rule was implemented to protect against the safety hazard); National Eng'g & Contracting Co. v. United States, 838 F.2d 815, 819 (6th Cir. 1987) (finding that employer failed to prove unpreventable employee misconduct when employer's foreman visited area several times a day, superintendent came by during course of work, and statement read at safety meeting did not meet the definition of a work rule); Pennsylvania Power & Light Co. v. OSHRC, 737 F.2d 350, 354 (3d Cir. 1984) (stating that employer is not held strictly liable "for isolated and idiosyncratic instances of employee misconduct"); Daniel Int'l Corp. v. OSHRC, 683 F.2d 361, 364 (11th Cir. 1982) (holding that affirmative defense of unforeseeable employee conduct must be proven by employer); H.B. Zachary Co. v. OSHRC, 638 F.2d 812, 818 (5th Cir. 1981) (same); Danco Constr. Corp. v. OSHRC, 586 F.2d 1243, 1246 (8th Cir. 1978) (same). But see Ocean Elec. Corp. v. Secretary of Labor, 594 F.2d 396, 403 (4th Cir. 1979) (placing burden of proof regarding adequacy of safety program and foreseeability of unsafe act on the Secretary of Labor); cf. Mountain States Tel. & Tel. Co. v. OSHRC, 623 F.2d 155, 157 (10th Cir. 1980) (holding that it was error to place burden on employer to show that violation was unpreventable on theory that supervisory employee's knowledge could be imputed to employers).

n41 See E & R Erectors, Inc. v. Secretary of Labor, 107 F.3d 157, 163 (3d Cir. 1997) (holding that employer did not establish affirmative defense of impossibility when vice-president conceded that use of lifelines for workers 25 feet above the ground was a feasible safety precaution); Interstate Erectors, Inc. v. OSHRC, 74 F.3d 223, 228 (10th Cir. 1996) (holding that establishment of impossibility defense can relieve an employer of liability for failure to provide approved and required fall protection devices); Bancker Constr. Corp. v. Reich, 31 F.3d 32, 34 (2d Cir. 1994) (finding that employer must demonstrate that compliance was impossible or infeasible and that it used alternative means if any were available); A/C Elec. Co. v. OSHRC, 956 F.2d 530, 534 (6th Cir. 1991) (holding that employer may assert impossibility as affirmative defense in the answer to a complaint); Brock v. Dun-Par Engineered Form Co., 843 F.2d 1135, 1136 (8th Cir. 1988) (holding that employer must show that compliance is impossible or infeasible and that it used alternative means if they were available); National Eng'g & Contracting Co., 838 F.2d at 818-19 (rejecting employer's argument that compliance was infeasible when evidence proved four other viable methods of compliance); Long Beach Container Terminal v. OSHRC, 811 F.2d 477, 479 (9th Cir. 1987) (holding that it is not enough to show compliance would be difficult, inconvenient, or expensive, to avoid criminal liability); J.L. Foti Constr. Co. v. Donovan, 786 F.2d 714, 718 (6th Cir. 1986) (finding that employer failed to show impossibility when evidence indicated compliance possible without precluding performance of work); Donovan v. Williams Enter., Inc., 744 F.2d 170, 178 (D.C. Cir. 1984) (deciding that employer's failure to counter evidence that compliance is possible with specific evidence supporting assertion of impossibility requires rejection of the defense); Secretary of Labor v. Hughes Bros., Inc., No. 12523, 1978 WL 7138, at *6 (O.S.H.R.C. 1978) (holding that employer must show by preponderance of evidence that compliance is not technically possible and that other safety means are used).

n42 See E & R Erectors, Inc., 107 F.3d at 164 (holding that affirmative defense of greater hazard was not applicable because employer failed to refute Secretary of Labor's prima facie case "that a practical means of fall protection was available"); Bancker Constr., 31 F.3d at 34 (determining that employer must show: hazard of compliance with standard is greater than that of noncompliance, alternative means of protection not available, and variance not available or not appropriate to avoid liability); Rawson Contractors v. Reich, 43 F.3d 1474 (7th Cir. 1994) (unpublished table decision) (same); Dole v. Williams Enter., 876 F.2d 186, 188 (D.C. Cir. 1989) (same); RSR Corp. v. Donovan, 747 F.2d 294, 303 (5th Cir. 1984) (same); True Drilling Co. v. Donovan, 703 F.2d 1087, 1090 (9th Cir. 1983) (same).

n43 See Bancker Constr., 31 F.3d at 35 (finding no prejudice where employer violated trench regulation but citation was not issued until after trench filled in).

n44 The Safety and Health Advancement Act proposed that a citation for violation of a promulgated rule be vacated if an employer demonstrates that employees were "protected by alternate methods that are equally or more protective of the safety and health of the employees than the methods required by such standard, rule, order, or regulation in the factual circumstances underlying the citation." S. 765, 105th Cong. (1997). Additionally, the OSHA Modernization Act of 1997 would amend 29 U.S.C. § 658. This bill proposes that a citation cannot be issued against an employer "unless the employer knew, or with the exercise of reasonable diligence, would have known, of the presence of an alleged violation." S. 551, 105th Cong. (1997). It also would allow employers the alternate methods defense and relieves the employer of liability if he or she is able to demonstrate that the employees were provided with the proper training and equipment to prevent the violation, the employer established and communicated work rules to prevent the violation, employee failure to observe work rules led to the violation, and that the employer took reasonable steps to discover violations. Id.

n45 For a detailed discussion of the criminal law regarding false statements, see the FALSE STATEMENTS article in this issue.

n46 29 U.S.C. § 666(g) (1994). See, e.g., Massachusetts Asbestos Removal Firm, Vice President Indicted for Lying to OSHA About Respirators, 23 O.S.H. Rep. (BNA) 331 (Aug. 25, 1993) (charging firm and vice-president with making false statements to OSHA that workers were wearing respirators which guarded against asbestos exposure when respirators had not been tested for proper fit); Safety Consultant Confined to Home, Fined for Making False Statements to OSHA, 22 O.S.H. Rep. (BNA) 1729 (Mar. 17, 1993) (reporting guilty pleas to charges of making false statements to OSHA during agency investigation of alleged lead poisonings of workers); Foreman of New York Asbestos Abatement Firm Faces Fine, Year's Probation for Lying to OSHA, 21 O.S.H. Rep. (BNA) 1514 (Apr. 15, 1992) (reporting guilty plea to charge of making false statements regarding abatement techniques by submitting staged photographs to OSHA).

n47 From July 1978 to December 1996, there were 13 false statement criminal referrals by OSHA to the DOJ or U.S. Attorneys. During this period, the DOJ or the U.S. Attorneys declined prosecution in four cases; one action was terminated; guilty pleas were entered in three cases; one indictment was obtained; and no decision has been reached yet in four cases. CRIMINAL REFERRALS, supra note 14.

n48 29 U.S.C. § 666 (1994). Employers who willfully or repeatedly violate the general duty clause or any specific OSHA standard may be assessed a civil penalty of not more than $ 70,000 for each violation, but not less than $ 5,000 for each willful violation. 29 U.S.C. § 666(a) (1994). Citations for serious violations as well as those determined not to be of a serious nature may earn a civil penalty of up to $ 7,000 for each violation. 29 U.S.C. §§ 666(b)-(c) (1994).

n49 29 U.S.C. § 666(e) (1994).

n50 Id.

n51 29 U.S.C. § 666(f) (1994).

n52 29 U.S.C. § 666(g) (1994).

n53 Senator Jack Reed introduced several amendments to the OSH Act, including one that would increase criminal penalties for employers. Senate Labor Panel Approves Enzi Bill, Votes to Confirm Jeffress as OSHA Head, BNA OCCUPATIONAL SAFETY & HEALTH DAILY, Oct. 23, 1997, at *2. The proposal was defeated by the Republican members of the Senate Labor Committee in a 10-8 vote. Id.

n54 One commentator stated:

Under the [OSH Act], an inflexible and relatively weak set of civil sanctions and remedies is supposedly backed up by the threat of criminal sanctions. The criminal sanction under the [OSH Act] has not only been singularly unsuccessful, but has also been employed in pursuit of goals of questionable value. Punishing an employer on the basis of moral culpability is neither directly beneficial to workers nor, where the defendant is a corporation, an achievable goal. While individual criminal liability for corporate officers may circumvent some of the difficulties associated with imposing corporate criminal liability, convictions of individuals are extremely elusive, and deterrence suffers accordingly.

Note, A Proposal to Restructure Sanctions Under the Occupational Safety and Health Act: The Limitations of Punishment and Culpability, 91 YALE L.J. 1446, 1473 (1982) [hereinafter Limitations of Punishment and Culpability]; see also Lynn K. Rhinehart, Would Workers Be Better Protected if They Were Declared an Endangered Species?: A Comparison of Criminal Enforcement Under the Federal Workplace Safety and Environmental Protection Laws, 31 AM. CRIM. L. REV. 351, 359 (1994) ("OSHA has rarely used its criminal prosecution authority and has even more rarely been successful"); Note, Corporate Criminal Liability for Employee-Endangering Activities, 18 COLUM. J.L. & SOC. PROBS. 39, 67 (1983) [hereinafter Corporate Criminal Liability] (stating that criminal cases have ended in acquittals or fines no greater than civil penalties, thus undermining criminal sanctions' deterrence on employers); Kirk Victor, Is the Honeymoon Over? NAT'L J., Jan. 25, 1992, at 216 (reporting that during the 1991 fiscal year, Environmental Protection Agency put 72 people in jail and fined employers a total of $ 14.1 million; stating that in the same year, OSHA assessed $ 91.7 million in fines, about half of which will be collected, and imprisoned no one).

n55 From July, 1978 to August, 1996, there were 110 criminal referrals by OSHA to the DOJ or U.S. Attorneys. During this period, the DOJ or the U.S. Attorney declined prosecution in 63 cases; four cases resulted in acquittals; guilty pleas were entered in 22 cases and no contest pleas entered in four cases; one action was terminated; the grand jury in one case returned no true bill; three convictions were obtained; one indictment had been obtained; one case was settled; no decision has been reached in four cases; no action has been taken in four cases, and two proceedings had been initiated by information. CRIMINAL REFERRALS, supra note 14.

n56 In October, 1991, OSHA negotiated a $ 10 million settlement with IMC Fertilizer Group, Inc. and Angus Chemical Co. following an explosion at a plant in which 8 workers died and 42 others were injured. In August 1991, a $ 5.8 million settlement with Citgo Petroleum Corp. and a $ 4 million settlement with Phillips 66 Co. were reached. Victor, supra note 54, at 214, 216. In July 1990, a pretrial diversion settlement was reached with D & C Construction, resulting in $ 20,000 to the decedent's family, $ 9,200 to the Department of Labor for expense reimbursement, $ 10,800 in civil penalties, and miscellaneous training and safety program improvements. CRIMINAL REFERRALS, supra note 14.

One critic claims that these settlements may become a cost of doing business that will have no meaningful deterrent effect on employers. Victor, supra note 54, at 214, 216 (citing comments of Robert E. Wages, President of the Oil, Chemical, and Atomic Workers International Union, AFL-CIO).

n57 On April 18, 1994, the Department of Labor fined Bridgestone/Firestone, Inc. $ 7.5 million after determining that it willfully violated OSH Act standards by failing to establish proper lockout procedures, failing to provide employees with locks, and failing to require employees to use locks and lockout procedures when servicing equipment, resulting in the death of Robert Julian, a maintenance worker at an Oklahoma City plant. At the time, the proposed fine was the third-largest in OSHA history. Frank Swoboda, Bridgestone Is Fined $ 7.5 Million by OSHA, WASH. POST, Apr. 19, 1994, at C4. When the case finally concluded on March 28, 1997, the company was fined a total of $ 518,000 for a combination of willful and serious violations. Secretary of Labor v. Dayton Tire, Bridgestone/Firestone, No. 94-1374, 1997 WL 152083 (O.S.H.R.C.) (Mar. 28, 1997).

Between 1979 and 1996, reported cases resulted in approximately 24 criminal fines by OSHA. See CRIMINAL REFERRALS, supra note 14 (Ladish Malting Co. (Oct. 1996) (conviction: $ 450,000 fine); Mark Atkins (Jan. 1996) (guilty plea: $ 1000 fine, $ 2,344 reimbursement of government expenses, one year probation); Quality Tower (Aug. 1995) (nolo plea: three months house arrest, three years probation, 300 hours of community service, $ 7500 fine); Monfort (May 1995) (guilty plea: $ 100,000 fine); MIT Tank Wash (Jan. 1995) (guilty plea: 6 month jail term, 1 year probation, $ 190,000 fine); Falcon Candy (Oct. 1994) (guilty plea: $ 120,000 fine); Petroleum Tank Svcs. (Oct. 1994) (nolo plea: $ 30,000 fine); Stepper Enter. (May 1993) (guilty plea: $ 25,000 fine, surrender of hoist); John Cusack (Quality Steel) (Dec. 1992) (guilty plea: $ 2,500 fine, three years probation, 200 hours community service); Master Metals (Dec. 1992) (guilty plea, defendant Howard: $ 5,000 fine, one year probation, 180 days in home confinement; guilty plea, defendant Mickey: $ 15,000 fine, four months in halfway house, four months home confinement, two years probation, 400 hours community service, reimbursement of confinement expenses); National Beef Packing (May 1992) (guilty plea: $ 150,000 fine, three-year period of supervised release); Safe Air Envtl. (Jan 1992) (guilty plea, defendant Brady: $ 2,000 fine, 200 hours community service, one year probation); Safe Air Envtl. (June 1991) (guilty plea, defendant Long: $ 2,000 fine, 200 hours community service, one year probation); ABC Util. (Apr. 1991) (conviction of company: $ 50,000 fine, one year unsupervised probation, three year reporting requirement); S.A. Healy (Feb. 1991) (conviction of company: $ 750,000 fine); Underground Util. (Jan. 1990) (guilty plea: $ 6,500 fine, four-month suspended sentence, probation, required to join contractors association and to develop safety program); Elliot Plumbing & Heating (Sept. 1989) (guilty plea: six-month sentence (suspended except for 45 days), three years probation); Sprint Contractors, Inc. (Feb. 1988) (guilty plea: 30 days in halfway house, $ 5,000 and $ 2,000 fines given to president and superintendent respectively, community service); James Heckert (Sept. 1982) (no contest plea: $ 10,000 fine and probation); Newton Roofing (Nov. 1980--date of referral) (guilty plea: $ 10,000 fine); Port Allen Marine (July 1980--date of referral) (guilty plea: $ 10,000 fine); Hughey Constr. (Aug. 1979--date of referral) (guilty plea: $ 15,000 total fines); Brown Steel (Aug. 1979--date of referral) (guilty plea: $ 500 fine); Nicholas Contracting (June 1979--date of referral) (no contest plea: $ 5,000 fine); Youngstown Sheet & Tube (Feb. 1979--date of referral) (guilty plea: $ 5,000 fine)).

See generally Michael H. Levin, Crimes Against Employees: Substantive Criminal Sanctions Under the Occupational Safety and Health Act, 14 AM. CRIM. L. REV. 717, 735-36 (1977) (reporting only four criminal prosecutions for willful violation causing death between 1971 and 1977); Note, Criminal Prosecution of Workplace Safety Violations, 94 W. VA. L. REV. 1007 (1992) (discussing state criminal prosecution of health and safety violations in workplace); Corporate Criminal Liability, supra note 54, at 66-67 (same); Limitations of Punishment and Culpability, supra note 54, at 1448 n.17 (1982) (same).

n58 See CRIMINAL REFERRALS, supra note 14 (MIT Tank Wash (January 1995) (guilty plea: six month jail term for Robert Sury, one year probation, and fine); Elliot Plumbing & Heating (Sept. 1989) (guilty plea: six-month sentence suspended except for 45 days, 3 years probation, restitution)).

n59 See CRIMINAL REFERRALS, supra note 14 (Quality Tower (Aug. 1995) (sentencing Mark Pyron to three months of house arrest, $ 7500 fine, 300 hours of community service and three years of probation; sentencing Company to $ 15,000 fine, five years probation and a reporting requirement); MIT Tank Wash (Jan. 1995) (sentencing defendant Robert E. Swing to six months in jail, one year of probation and $ 190,000 fine); Master Metals (Dec. 1992) (sentencing defendant Howard to one year probation with 180 days home confinement; defendant Mickey to four months in a halfway house, four months home confinement, two years probation, $ 15,000 fine, 400 hours community service, and reimbursement of confinement expenses); Sprint Contractors, Inc. (Feb. 1988) (sentencing defendant to 30 days in a halfway house, $ 5,000 and 2,000 fines given to president and superintendent respectively, community service).

n60 33 U.S.C. § 1319(c)(3)(A) (1994).

n61 42 U.S.C. § 6928(e) (1994 & Supp. 1995).

n62 Robert G. Schwartz, Jr., Criminalizing Occupational Safety Violations: The Use of "Knowing Endangerment" Statutes to Punish Employers Who Maintain Toxic Working Conditions, 14 HARV. ENVTL. L. REV. 487, 509 (1990).

n63 U.S. Department of Labor, OPA Press Release: Statement by Secretary of Labor Alexis M. Herman on Today's Pitt-Des Moines Decision (July, 31, 1997) <http://www.dol.gov/dol/opa/public/media/press/opa/opa97259.htm>.

n64 Department of Labor, OSHA, The New OSHA (modified July 1997) <http://www.osha-slc.gov/Reinventing/enforce.html>. Designed to enhance safety, trim paperwork, and transform OSHA, the Administration hopes that this new program will provide the incentives necessary to decrease the prevalence of worker injury and death. This program offers a choice to employers: partnership for firms with strong and effective health and safety programs, and traditional OSHA enforcement for firms that fail to implement strong and effective health and safety programs. The theory is that cooperation will free up needed time and resources for those firms with the greatest number of health and safety problems. "For those who have a serious history of endangering their employees and are unwilling to change, OSHA will rigorously enforce the law without compromise to assure that there are serious consequences for serious violations." Id. at 1.

n65 Department of Labor, OSHA Home Page (modified July 1997) <http://www.osha-slc.gov/>. Federal enforcement funding increased by $ 9.8 million dollars between fiscal year 1997 and fiscal year 1998. State enforcement funding increased by $ 2.0 million dollars during the same period.

n66 Id. If OSHA determines that an employer has "implemented a superior safety and health program" it has discretion to grant reductions in the penalties of up to 100 percent. Employers exhibiting good faith efforts will be granted reductions according to a sliding scale of incentives.

n67 Department of Labor, OSHA, The New OSHA (modified July 1997) <http://www.osha-slc.gov/Reinventing/enforce.html>. Where OSHA determines that a construction employer's program is effective, the agency will conduct inspections that are limited to the top four fatal hazards in the construction industry. However, where the employer's program is ineffective or lacking, the inspection will cover the complete site and will note all violations, including minor infractions.

n68 Occupational Safety and Health Act: Hearings Before the Subcomm. on Public Health and Safety, Senate Comm. on Labor and Human Res., 105th Cong. (July 10, 1997) (statement of Nancy Lessin, Senior Staff for Strategy and Policy, Massachusetts Coalition for Occupational Safety and Health). Ms. Lessin stated that:

The guiding principle regarding OSHA penalties must be this: it should cost an employer more to break the law than to observe it. There appears to be an overall reluctance to have OSHA inspectors act as police and reluctance for there to be severe penalties for employers who break the law.... It is ludicrous to think that less regulation and enforcement of workplace safety and health will promote improved workplace conditions.

Id.

n69 Gade v. National Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 107 (1992) (stating that some laws, though having a "direct and substantial" effect on aspects of worker safety, are not classified as occupational standards because they regulate workers incidentally as members of the public at large).

n70 See National Solid Wastes Mgmt. Ass'n v. Killian, 918 F.2d 671, 680 n.9 (7th Cir. 1990) (citations omitted) (listing cases holding that OSHA does not preempt state criminal law), aff'd in part, Gade, 505 U.S. 88 (1992); People v. Chicago Magnet Wire Corp., 534 N.E.2d 962, 965 (Ill. 1989) ("Nowhere in [the OSH Act] is there a statement or suggestion that the enforcement of State criminal law as to federally regulated workplace matters is preempted ...."); State ex rel. Cornellier v. Black, 425 N.W.2d 21, 25 (Wis. Ct. App. 1988) ("[Wisconsin] is only attempting to impose the sanctions of the criminal code upon one who allegedly caused the death of another person by reckless conduct. And the fact that that conduct may in some respects violate OSHA safety regulations does not abridge the state's historic power to prosecute crimes.").

See generally Note, Getting Away with Murder: Federal OSHA Preemption of State Criminal Prosecutions for Industrial Accidents, 101 HARV. L. REV. 535 (1987) [hereinafter Getting Away with Murder] (arguing that the OSH Act did not contemplate the federal preemption of state criminal prosecution for industrial injuries and fatalities).

n71 See, e.g., Sabine Consol., Inc. v. State, 806 S.W.2d 553, 554 (Tex. Crim. App. 1991) (reporting that a supervisor was successfully charged with the offense of criminally negligent homicide when trench walls collapsed); People v. Pymm, 563 N.E.2d 1, 3 (N.Y. 1990) (reporting offenses arising from mercury contamination of workplace); Chicago Magnet Wire Corp., 534 N.E.2d at 963 (listing charges against wire manufacturer and corporate official based on failure to provide safety precautions in workplace); People v. Hegedus, 443 N.W.2d 127, 128 (Mich. 1989) (reporting that an employee's supervisor was charged with involuntary manslaughter); People v. General Dynamics Land Syst., Inc., 438 N.W.2d 359, 361 (Mich. Ct. App. 1989) (reporting charges of involuntary manslaughter of an employee filed against a supervisor); State ex rel. Cornellier, 425 N.W.2d at 22 (reporting that an officer and operator were charged with homicide following the death of an employee). See generally, Kathleen F. Brickey, Death in the Workplace: Corporate Liability for Criminal Homicide, 2 NOTRE DAME J.L. ETHICS & PUB. POL'Y, 753, 756 n.7 (1987) (listing fifteen cases in which employers were prosecuted for homicide).

A particularly noteworthy case concerns a fire in a North Carolina chicken processing plant in 1991 that left 25 people dead and 56 people injured. The disaster received national attention as one of this country's worst industrial accidents. The plant had no fire alarm or sprinkler system, exits were unmarked, and doors were locked when the fire occurred on September 3, 1991. North Carolina's occupational safety agency said a shortage of inspectors and inadequate resources had prevented the state from detecting the danger. The owner faced a maximum sentence of 10 years on each of the 25 counts of involuntary manslaughter. The owner pled guilty and received a 19 year, 11 month sentence. Meat-Plant Owner Pleads Guilty in a Blaze that Killed 25 People, N.Y. TIMES, Sept. 15, 1992, at A20.

n72 See Getting Away with Murder, supra note 70, at 552 ("Through criminal prosecutions, the states retain authority over what they do best: punishing particularly egregious conduct and protecting their citizens against criminally negligent, reckless, or willful conduct .... [The prosecutions] may also help OSHA itself by bringing the agency's attention to hazards it has not sufficiently recognized."); David Von Ebers, Note, The Application of Criminal Homicide Statutes to Work-Related Deaths: Mens Rea and Deterrence, 1986 U. ILL. L. REV. 969, 998 (arguing that state criminal laws are best deterrent against employers' egregious conduct because penalties for homicide are directly related to mental state of employer and the employers that are convicted receive actual prison sentences); cf. Pymm, 563 N.E.2d at 5-6 ("While OSHA standards are prophylactic measures that are intended to prevent workplace accidents from ever occurring, the criminal laws of this State are triggered only after the commission of certain acts that society as a whole deems unacceptable ....") (citation omitted).

n73 People v. O'Neil, 550 N.E.2d 1090 (Ill. App. Ct. 1990). See generally, Jay C. Magnuson & Gareth C. Leviton, Policy Considerations in Corporate Criminal Prosecutions After People v. Film Recovery Systems, Inc., 62 NOTRE DAME L. REV. 913 (1987) (discussing policy implications of holding corporations and corporate officers liable for torts against employees and consumers).

n74 See O'Neil, 550 N.E.2d at 1092 (reporting instance where corporation was charged with involuntary manslaughter while individual defendant was charged with murder following the death of an employee).

n75 See supra notes 58-59 (listing examples of cases in which employers have been prosecuted for homicide).

n76 30 U.S.C. §§ 801-962 (1994). See generally Brickey, supra note 71, at 566-68 (discussing FMSHA).

n77 30 U.S.C. § 802(h) (1994).

n78 30 U.S.C. § 820 (d) (1994). See, e.g., United States v. Consolidation Coal Co., 504 F.2d 1330, 1335 (6th Cir. 1974) ("[willfulness is the] failure to comply with the safety standard under the [FMSHA] ... if done knowingly and purposely by a coal mine operator who, having a free will or choice, either intentionally disobeys the standard or recklessly disregards its requirements"). A first conviction can result in a fine of up to $ 25,000, imprisonment for up to one year, or both, and subsequent convictions can result in fines of up to $ 50,000, imprisonment for up to five years, or both. 30 U.S.C. § 820(d) (1994).

n79 30 U.S.C. § 820 (1994) (not mentioning fault as an element). See, e.g., Asarco, Inc. v. Federal Mine Safety & Health Review Comm'n, 868 F.2d 1195, 1197 (10th Cir. 1989) (stating that mine operator was subject to civil penalties when employee violated mandatory safety standards, even though employee was specifically warned by supervisors to adhere to the safety standards).

n80 30 U.S.C. § 820(d) (1994).

n81 30 U.S.C. § 820(c) (1994).

n82 30 U.S.C. § 820(c) (1994); see Richardson v. Secretary of Labor, 689 F.2d 632, 633 (6th Cir. 1982) (stating that differing treatment of corporate and non-corporate agents is not a violation of the Equal Protection Clause). But cf. Brickey, supra note 71, at 767-68 (stating that an "agent" of a noncorporate operator could be subject to criminal prosecution under § 820(d)) (citing United States v. Jones, 735 F.2d 785, 792-94 n.24 (4th Cir. 1984)).

n83 30 U.S.C. § 820(e) (1994). The penalty for giving advance notice is a fine of up to $ 1,000, imprisonment for up to six months, or both. Id.

n84 30 U.S.C. § 820(f) (1994). The penalty for false statements or representations is a fine of up to $ 10,000, imprisonment for up to five years, or both. Id. In addition to prosecutions under 30 U.S.C. § 820(f), mine operators and contractors may be prosecuted under 18 U.S.C. § 1001 (making a false statement to a federal agency) and 18 U.S.C. § 371 (conspiracy to defraud an agency of the United States) both of which are felony charges. Two contractors who provided false respirable dust samples to MSHA on behalf of numerous mine operators were charged under the RICO statute, 18 U.S.C. § 1962(c) (1994). Companies Agree to Plead Guilty to Submitting False Coal Dust Samples, 21 O.S.H. Rep. (BNA) 573 (Oct. 23, 1991).

n85 30 U.S.C. § 820(h) (1994). Penalties for distributing noncomplying equipment include fines of up to $ 10,000, imprisonment for up to five years, or both. Id.

n86 H.R. REP. NO. 102-663, pt. 1, at 45 (1992); see also Rhinehart, supra note 54, at 357 n.33. (arguing that the criminal penalty provisions in FMSH Act are substantially broader and stronger than those of the OSH Act).

n87 See Letter from the Mine Safety & Health Administration, Technical Compliance and Investigation Division (Nov. 7, 1996) (stating that in Fiscal Year 1990, 163 cases were opened and 18 referred for criminal prosecution; this increased to 282 cases opened and 22 criminal referrals in Fiscal Year 1994, but subsequently fell to 133 cases opened and 13 referred for criminal prosecution in Fiscal Year 1996).

n88 29 U.S.C. §§ 201-219 (1994).

n89 See 29 U.S.C. § 202 (1994) (setting forth purposes of FLSA). It was Congress's intent that industries be held liable to FLSA standards "to correct and as rapidly as practicable to eliminate the conditions" in industry and in interstate commerce that Congress had found to be "detrimental to the maintenance of the minimum standard of living necessary for the health, efficiency, and general well-being of workers." See United States v. Universal C.I.T. Credit Corp., 102 F. Supp. 179, 184 (W.D. Mo.) (citing 29 U.S.C. § 202) (describing the purposes of FLSA), aff'd. 344 U.S. 218 (1952); see also United States v. Darby, 312 U.S. 100, 109 (1941) (same).

n90 29 U.S.C. § 202 (1994).

n91 29 U.S.C.A. § 206 (1978 & Supp. 1997). As amended in 1996, Congress has established a minimum wage of $ 4.75 per hour during the year beginning on October 1, 1996 and of $ 5.15 per hour beginning September 1, 1997. Varied minimum wage standards apply to employees in Puerto Rico, the Virgin Islands, and American Samoa, and to seamen aboard American vessels. Id.

n92 29 U.S.C. § 207 (1994). Except as otherwise provided for in the section, no employer shall employ any of his employees for a workweek longer than forty hours, unless the employee receives compensation for the hours in excess of forty hours at a rate not less than one and one-half times the regular rate. There are exceptions for bona fide executive and managerial employees, as well as certain other classes. Id. See, e.g., Reich v. Waldbaum, 52 F.3d 35, 37 (2d Cir. 1995) (stating that employer violated FLSA by not compensating hourly employees who worked more than forty hours per week); Knowlton v. Greenwood Indep. Sch. Dist., 957 F.2d 1172, 1178-79 (5th Cir. 1992) (holding that employer violated FLSA by requiring cafeteria employees to work additional hours without pay at school board dinners).

n93 29 U.S.C. § 211(c) (1994). The FLSA makes it an offense for an employer "to violate any of the provisions of § 211(c) ... or to make any statement, report, or record filed or kept pursuant to the provisions of such section or of any regulation or order thereunder, knowing such statement, report, or record to be false in a material respect." 29 U.S.C. § 215(a)(5) (1994).

The rules on record keeping require employers to maintain and preserve "basic records" of payroll data for employees subject to FLSA. However, the regulations do not require that records be kept in any particular form. 29 C.F.R. § 516.1(a) (1997).

n94 29 U.S.C. § 206(d) (1994). This provision, also known as the Equal Pay Act, was enacted as an amendment to the FLSA in 1963.

n95 29 U.S.C. § 212 (1994). Section 203(1) defines "oppressive child labor" as the employment of (1) a child under 16, other than employing one's own child, in an activity other than mining, manufacturing, or other hazardous work; and (2) an employee 16-18 years of age employed in work "particularly hazardous for the employment of children." 29 U.S.C. § 203(1) (1994).

n96 29 U.S.C. § 215(a)(3) (1994).

n97 29 U.S.C. § 215(a)(1) (1994).

n98 29 U.S.C. § 215(a)(1) (1994). See, e.g., Citicorp Indus. Credit v. Brock, 483 U.S. 27, 39 (1987) (finding that secured creditor who forecloses on a producer of "hot goods" is not allowed to introduce the goods into commerce); Reich v. Tri-State Energy Prods. Inc., 836 F. Supp. 358, 361-62 (S.D. W. Va. 1993) (holding that machinery and equipment used to produce "hot goods" not within statutory terms of "hot goods" as purchaser was the ultimate consumer).

As a defense against purchasing "hot goods," the Wage-Hour Administrator advises companies to supervise their suppliers by specifying in the contract with the supplier that all goods purchased are produced in compliance with the law or by checking occasionally on the suppliers' employment practices. 29 C.F.R. § 789.3 (1997). If a company makes a "good faith effort" to avoid buying hot goods, the Wage-Hour Division will not prosecute it for the violations of suppliers. 29 C.F.R. § 789.5 (1997).

n99 See United States v. Moore, 95 F. Supp. 227, 228 (S.D. Fla. 1951) (holding that a prosecution under FLSA preempts one under 18 U.S.C. § 80, the former false statements statute (now 18 U.S.C. § 1001)).

n100 Id; see also Tombrello v. USX Corp., 763 F. Supp. 541, 544 (N.D. Ala. 1991) (holding that FLSA creates exclusive remedy and bars state law claims for unpaid wages).

n101 See Elkins v. Showcase, Inc., 704 P.2d 977, 983 (Kan. 1985) (stating that where legislation is applicable that does not contravene the requirements of the FLSA, no language should be construed to negate the applicability of those provisions) (citing 29 C.F.R. § 531.26 (1984)).

n102 29 U.S.C. § 218(a) (1994).

n103 29 U.S.C. § 216(a) (1994).

n104 29 U.S.C. § 203(e)(1) (1994). Employees of public agencies are covered by the statute; an "employee" of a public agency generally includes any individual employed by the Government of the United States, any individual employed by the United States Postal Service or the Postal Rate Commission and any individual employed by a state, political subdivision of a state, or an interstate governmental agency. 29 U.S.C. § 203(e)(2) (1994); see infra notes 115-128 and accompanying text (discussing definition of employer under FLSA); see also Auer v. Robbins, 117 S. Ct. 905 (1997) (discussing determination of employee status of police officers).

n105 Houser v. Matson, 447 F.2d 860, 862 (9th Cir. 1971). Compare Harker v. State Use Indus., 990 F.2d 131, 132 (4th Cir. 1993) (ruling that prison inmates considered prisoners, not employees, and therefore not entitled to minimum wage) with Martin v. Albrecht, 802 F. Supp. 1311, 1313-14 (W.D. Pa. 1992) (stating that seamstresses performing work for employer at home are employees entitled to minimum wage). While prison inmates are generally not considered employees under the FLSA, the Prison Industry Enhancement program authorized by Congress through the Justice System Improvement Act of 1979 does require private employers to pay prisoners at least the minimum wage. For a discussion of this program, see James J. Misrahi, Note, Factories with Fences: An Analysis of the Prison Industry Enhancement Certification Program in Historical Perspective, 33 AM. CRIM. L. REV. 411 (1996) (advocating wider implementation of the Prison Industry Enhancement program).

n106 See, e.g., Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326 (1992) (stating that the broad definition of "employee" in FLSA indicates a larger group of individuals than included under common law or ERISA); Rutherford Food Corp. v. McComb, 331 U.S. 722, 728 (1947) (holding that even where group of employees were paid on a group, not individual, basis, they were still employees); Henderson v. Inter-Chem Coal Co., 41 F.3d 567, 570 (10th Cir. 1994) (holding that, in determining employer-employee relationship, the court's inquiry is not limited by contractual terminology, but instead looks at the economic realities of the relationship).

n107 29 U.S.C. § 203(g) (1994). The purpose of the Act was to ensure that no person whose employment contemplated compensation should be compelled to sell his services for less than the prescribed minimum wage. It was not intended to cover those without any express or implied compensation who may work for their own advantage on the premises of another. See Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290, 295 (1985) (categorizing "associates" who worked for a religious foundation and expected to receive benefits in kind for their work as employees under FLSA); Walling v. Portland Terminal Co., 330 U.S. 148, 151 (1947) (holding that trainees who were not bound to employment at the end of the training period were not employees under FLSA); Donovan v. Trans World Airlines, Inc., 726 F.2d 415, 416 (8th Cir. 1984) (holding that flight attendant trainees were not employees for the purposes of FLSA); Williams v. Strickland, 837 F. Supp. 1049, 1053 (N.D. Cal. 1993) (holding that participation in a charitable organization's "work therapy" program did not qualify individual as an employee under FLSA). Additionally, the FLSA does not apply to any agricultural employee who is a member of the employer's immediate family. 29 U.S.C. § 203(e)(3) (1994).

n108 29 U.S.C. § 207 (1994). See, e.g., Mullins v. Howard County, 730 F. Supp. 667, 669 (D. Md. 1990) (stating that practice of "averaging" fire fighters' straight time and overtime wages over bi-weekly pay period does not violate FLSA).

n109 29 U.S.C. § 214 (1994).

n110 See Rutherford Food Corp., 331 U.S. at 729-30 (noting factors leading to determination of independent contractor status); Martin v. Selker Bros., 949 F.2d 1286, 1293 (3d Cir. 1991) (listing six factors for courts to consider when determining whether a worker is an employee); Dole v. Snell, 875 F.2d 802, 805 (10th Cir. 1989) (listing five factors which courts generally consider in determining employment status).

n111 See Falk v. Brennan, 414 U.S. 190, 195 (1973) (finding that maintenance workers are employees because of substantial control exerted over the terms and conditions of their work); Rutherford Food Corp., 331 U.S. at 730 (finding that meat boners employed in slaughterhouse on contract-payment basis are employees of slaughterhouse; degree of supervision and method of payment were determinative factors); Walling, 330 U.S. at 152-53 (stating that workers hired as trainees by railways are not employees under FLSA where benefit to employer and intent that services be compensated were lacking); United States v. Rosenwasser, 323 U.S. 360, 361 (1945) (opining that workers paid by piece or by hour are employees within FLSA; time or mode of compensation are not determinative of employee status); Overnight Motor Trans. Co. v. Missel, 316 U.S. 572, 574 (1942) (concluding that workers paid by week as well as those paid by hour are employees within FLSA definition).

n112 Fair Labor Standards Act, Who Are Employees, [6 Wage and Hour Manual] Lab. Rel. Rep. (BNA) No. 3, at 91:104-5 (Oct. 4, 1993). The factors which are considered significant include:

(1) The degree to which the employer controls or directs the manner in which the work is done; (2) whether the individual worker's opportunity for profit or loss depends upon the worker's managerial skill; (3) whether the service performed by the worker is an integral part of the employer's business; (4) the extent of the individual worker's investment in equipment or materials needed to perform the job; (5) the degree to which the worker is engaged primarily for the benefit of the employer; (6) the opportunities for profit and loss; the degree of independent business organization and operation and the degree of independent initiative, judgment, or foresight exercised by the one who performs the services.

Id; see Snell, 875 F.2d at 804 ("the focal point is whether the individual is economically dependent on the business to which he renders service ... or is, as a matter of economic fact, in business for himself"); Castillo v. Givens, 704 F.2d 181, 190 (5th Cir. 1983) ("The determinative question is whether the person is 'dependent upon finding employment in the business of others.'"); Blankenship v. Western Union Tel. Co., 161 F.2d 168, 170 (4th Cir. 1947) (stating that right to control manner of doing work contracted for is principal consideration as to whether person is employed as independent contractor). Compare Carrell v. Sunland Constr. Inc., 998 F.2d 330, 333-34 (5th Cir. 1993) (stating that welders were independent contractors since they were not economically dependent upon business to which they rendered their services) with Reich v. Circle C. Invs. Inc., 998 F.2d 324, 329 (5th Cir. 1993) (stating that topless dancers were employees since they were dependent on finding employment in the business of others).

n113 29 U.S.C. § 213(a)(1) (1994).

n114 See 29 C.F.R. §§ 541.0-541.52, 541.99-541.602 (1997) (describing generally what is required for an employee to qualify for an exemption under 29 U.S.C. § 213(a)(1)).

n115 29 U.S.C. § 203(d) (1994); see also Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33 (1961) (stating that economic reality rather than technical concepts determines whether an employment relationship exists); Morgan v. F.T. MacDonald, 41 F.3d 1291, 1292 (9th Cir. 1994) (applying Goldberg economic reality standard).

n116 United States v. Rosenwasser, 323 U.S. 360, 363 n.3 (1945).

n117 See 29 U.S.C. § 203(a) (1994) (defining "person," for § 203(d) purposes, as "an individual, partnership, association, corporation, business, trust, legal representative, or any organized group of persons").

n118 Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir. 1983); see Fegly v. Higgins, 19 F.3d 1126 (6th Cir. 1994) (stating that chief executive officer who had significant ownership interest in company, controlled significant functions of the business, determined salaries and made hiring decisions is held jointly liable with corporation for all damages assessed). But cf. Reich v. PTC Career Inst. of Pa., Inc., No. CIV.A.94-647, 1994 WL 283681, at *1-4 (E.D. Pa. June 24, 1994) (convicting some officers of company while not convicting others, depending on their degree of authority to act as employers), aff'd, 52 F.3d 316 (3d Cir. 1995).

n119 Donovan v. Grim Hotel Co., 747 F.2d 966, 971 (5th Cir. 1984); see also Donovan v. Unique Racquetball & Health Clubs, Inc., 674 F. Supp. 77, 81 (E.D.N.Y. 1987) (holding president and secretary of health club jointly and severally liable for minimum wage violations of FLSA).

n120 Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290, 295 n.8 (1985).

n121 See 29 U.S.C. § 202 (1994) (setting forth Congress's FLSA findings and policy).

n122 29 U.S.C. § 203(r) (1994) (defining "enterprise" as "the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose ...").

n123 See, e.g., Brennan v. Veterans Cleaning Serv., Inc., 482 F.2d 1362, 1366 (5th Cir. 1973) (stating that to be an enterprise there must exist related activities, unified operation or common control, and a common business purpose); Donovan v. Shteiwi, 563 F. Supp. 118, 121 (S.D. Ohio 1983) (affirming use of the three Brennan factors to determine "enterprise"), aff'd, 738 F.2d 438 (6th Cir. 1984) (table); see also Martin v. Deiriggi, 985 F.2d 129, 133-34 (4th Cir. 1992) (finding that two businesses whose operations were directed towards making a profit and providing an array of complementary services to travelers had a common business purpose and, correspondingly, operated as a single enterprise); Cruz v. Chesapeake Shipping Inc., 932 F.2d 218, 228-29 (3d Cir. 1991) (stating that two companies wholly owned by single corporation not necessarily part of same enterprise); Reich v. Priba Corp., 890 F. Supp. 586, 589-90 (N.D. Tex. 1995) (stating that two businesses that operate out of same business location, are consolidated for income tax purposes, operate under same trade name, have combined accounting department, and share common officers constitute an enterprise); Griffin v. Daniel, 768 F. Supp. 532, 536 (W.D. Va. 1991) (stating that joint profit motive alone insufficient to support a finding of common business purpose).

n124 29 U.S.C. § 203(d) (1994).

n125 29 U.S.C. § 216(a) (1994).

n126 29 U.S.C. § 216(b) (1994).

n127 29 U.S.C. § 216(a), (b) (1994); see Denicola v. G.C. Murphy Co., 562 F.2d 889, 894 (3d Cir. 1977) (stating that labor organization not liable to represented employees for minimum wage discrimination).

n128 Tuma v. American Can Co., 367 F. Supp. 1178, 1182 (D.N.J. 1973). The general five-year statute of limitations for a criminal violation also applies to a FLSA criminal violation. 18 U.S.C. § 3282 (1994).

n129 29 U.S.C. § 216(a) (1994).

n130 See McLaughlin v. Richland Shoe Co., 486 U.S. 128, 132-33 (1988) (rejecting standard in Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, 1141 (5th Cir. 1971), under which an employer was found willful if it knew FLSA was "in the picture," because that interpretation would have covered situations where an employer was merely negligent); Yourman v. Dinkins, 865 F. Supp. 154, 158-59 (S.D.N.Y. 1994), (stating that an employer's conduct shall be deemed in reckless disregard of FLSA requirements if the employer should have inquired further into whether its conduct was in compliance with FLSA and failed to make adequate inquiry) (citing 29 C.F.R. § 578.3(c)(1),(3)), vacated and remanded on other grounds sub nom. Giuliani v. Yourman, 117 S. Ct. 1078 (1997).

n131 See Reich v. New Mount Pleasant Bakery Inc., No. 89-CV-581, 1993 WL 372270, at *5 n.25-27 (N.D.N.Y. Sept. 13, 1993) (stating that employer found to have willfully violated FLSA because employer knew it had to maintain accurate records of employees' hours worked, but failed to do so).

n132 Fair Labor Standards Act, Enforcement and Procedure, [Labor Relations Expediter] Lab. Rel. Rep. (BNA) No. 684, at 530:212 (July 30, 1990).

n133 See Reich v. Tiller Helicopter Servs., 8 F.3d 1018 (5th Cir. 1993) (stating that a district court may exercise its discretionary authority to reduce or eliminate a liquidated damage award only if employer sustains the substantial burden of persuading the court that the failure to obey the statute was both in good faith and predicated upon reasonable grounds); Wirtz v. Harper Buffing Mach. Co., 280 F. Supp. 376, 381 (D. Conn. 1968) (stating that lack of malicious motives will not excuse employer, but may limit penalty to compensation owed).

n134 See 29 U.S.C. § 259 (1994) (stating that if an employer relied in good faith upon a written ruling by the wage hour administrator, then it may escape liability); see also Palardy v. Horner, 711 F. Supp. 667, 673 (D. Mass. 1989) (stating that good faith reliance on Office of Personnel Management presumption regulation may be invoked as a defense to back pay liability).

n135 29 U.S.C. § 216(a) (1994). In the enforcement sections of the FLSA, Congress intended to provide a detailed, and thus exclusive, remedy. Lerwill v. Inflight Motion Pictures, Inc., 343 F. Supp. 1027, 1028-29 (N.D. Cal. 1972).

n136 29 U.S.C. § 216(a) (1994). Civil penalties may be incurred by "any employer who violates the provisions" of the Act, with no mention of the "willful" requirement necessary for criminal liability under § 216(a). Id. Although punitive damages are not recoverable under the statute, employers are potentially subject to large damages since a civil cause of action is created in favor of each employee affected by an employer's FLSA violation.

n137 See Donovan v. Lone Steer, Inc., 464 U.S. 408, 409 n.1 (1984) (citing 29 U.S.C. § 211 (a)); Berg v. Newman, 982 F.2d 500, 504 (D.C. Cir. 1992) (stating that the FLSA charges the Wage and Hour Administrator with ensuring private employer compliance with the provisions of the statute).

n138 29 U.S.C. § 209 (1994).

n139 29 U.S.C. § 211(a) (1994).

n140 29 U.S.C. § 211(c) (1994).

n141 29 U.S.C. § 204(d)(2) (1994); see Freeman v. NBC, 846 F. Supp. 1109, 1113 (S.D.N.Y. 1993) (stating that Secretary of Labor has delegated his authority to define and delimit exemptions to FLSA to the Administrator of the Wage and Hour Division, who has promulgated both regulations and interpretations defining exemptions from coverage), rev'd on other grounds, 80 F.3d 78 (2d Cir. 1996).

n142 29 U.S.C. § 216(c) (1994).

n143 United States v. Brunetto Cheese Co., 291 F.2d 540, 541 (2d Cir. 1961) (per curiam). But cf. Usery v. Brandel, 87 F.R.D. 670, 684 (W.D. Mich. 1980) (concluding that an employer cannot refuse to disclose information relating to a violation under investigation, but it can invoke its privilege against self-incrimination if a reply may indicate violations of other FLSA sections not under investigation, or violations of completely separate statutes).

n144 Oklahoma Press Publ'g Co. v. Walling, 327 U.S. 186, 214 (1946); see Donovan v. Shaw, 668 F.2d 985, 989 (8th Cir. 1982) (stating that the question of coverage under a federal statute "cannot be resolved before the agency has had an opportunity to examine the relevant records").

n145 Cf. Glorioso v. Williams, 130 F.R.D. 664, 664 (E.D. Wis. 1990) (stating that wage records for employees other than plaintiff are not discoverable).

n146 Thus, the Fifth Circuit has held that:

The FLSA establishes three separate statutory causes of action: (1) under Section 16(b) ... an employee may sue his employer for unpaid overtime compensation, unpaid minimum wages, and an additional equal amount in liquidated damages; (2) under Section 16(c) the Secretary may sue on behalf of an employee or employees to recover unpaid overtime, unpaid minimum wages, and an additional equal amount as liquidated damages; and (3) under Section 17 the Secretary may seek to enjoin violations of the FLSA and to restrain the withholding of payment of minimum wages and overtime compensation which are due employees under the Act.

Castillo v. Givens, 704 F.2d 181, 187 n.11 (5th Cir. 1983).

n147 Labor Management Relations (Taft-Hartley) Act § 302, 29 U.S.C. § 186 (1994). See generally Labor Management Relations (Taft-Hartley) Act, 29 U.S.C. §§ 141-197 (1994) (providing all provisions of this act).

n148 S. REP. NO. 98-225, 298 (1983), reprinted in 1984 U.S.C.C.A.N. 3182, 3478. It was Congress' intent to prevent conflicts of interest that could corrupt the labor movement. United States v. Phillips, 19 F.3d 1565, 1574 (11th Cir. 1994). Other purposes include the protection of union benefit funds for employees, Schwartz v. Associated Musicians of Greater N.Y., 340 F.2d 228, 233 (2d Cir. 1964), and the prevention of corruption in the collective bargaining process, United States v. Lanni, 466 F.2d 1102, 1103 (3d Cir. 1972). Congress also intended to prevent the possible abuse by union officers of the power they could achieve if welfare funds were left solely in their control, Walsh v. Schlecht, 429 U.S. 401, 411 (1977), and to assure that employees receive the specified benefit funds for which employers are paying, Communications Workers of Am. v. Bell Atl. Network Servs., 670 F. Supp. 416, 420 (D.D.C. 1987).

Through August 31 of Fiscal Year 1996, the Department of Justice prosecuted 15 cases under 29 U.S.C. § 186 (1994): 13 of these cases were terminated by guilty pleas and two were dismissed. In Fiscal Year 1995, 30 cases were prosecuted: 12 of these cases ended in guilty pleas; five cases were tried, with four ending in guilty verdicts and one in acquittal; 10 were dismissed; and three were carried over to another term. U.S. DEPARTMENT OF JUSTICE, EXECUTIVE OFFICE FOR UNITED STATES ATTORNEYS, CRIMINAL CASELOAD STATISTICS ON TITLE 29 U.S.C. § 186 (Oct. 17, 1996).

n149 See United States v. Papia, 910 F.2d 1357, 1362 (7th Cir. 1990) (citing dicta in United States v. Ryan, 350 U.S. 299, 305 (1956), which says that 29 U.S.C. § 186 is a criminal provision, malum prohibitum).

n150 The 1997 controversies over the Teamsters elections do not invoke this statute because the alleged offenses concern shifting of union funds, not kickbacks by union members to union officials. Frank Swoboda & Sharon Walsh, U.S. Says Carey Aides Used DNC, AFL-CIO; Consultants Plead Guilty to Funneling Money to Teamsters President's Reelection Campaign, WASH. POST, Sept. 19, 1997, at A8.

n151 Papia, 910 F.2d at 1360. Section 302(d) is divided into two parts. Part (1) requires both willfulness and an intent to benefit oneself or others, while part (2) only requires willfulness. 29 U.S.C. § 186(d) (1994).

n152 An "industry affecting commerce" is defined as "any industry or activity in commerce or in which a labor dispute would burden or obstruct commerce or tend to burden or obstruct commerce or the free flow of commerce." 29 U.S.C. § 142(1) (1994); see United States v. Ricciardi, 357 F.2d 91, 95 (2d Cir. 1966) (stating that management of small apartment buildings in the Bronx and Westchester County could be an industry affecting commerce). "Commerce" is defined to mean "trade ... among the several states." 29 U.S.C. § 152(6) (1994); see Ricciardi, 357 F.2d at 95 (holding that the term "industry" should be broadly construed and not be confined to the business activities of the employers or the employees); cf. EEOC v. Association of Community Orgs. For Reform Now, 67 Fair Empl. Prac. Cas. (BNA) 508 (E.D. La. Mar. 8, 1995) (discussing Congress' intention that labor laws cover all activities affecting commerce, regardless of whether these are operated for non-profit reasons) aff'd, 83 F.3d 418 (5th Cir. 1996) (table). Furthermore, there is no need to allege what industry affecting commerce is involved or how the industry affects commerce. See United States v. DiSalvo, 251 F. Supp. 740, 743 (S.D.N.Y. 1966) (holding that indictment for a violation of 29 U.S.C. § 186 was not deficient because it did not allege which industry was affected or facts showing that an industry was affected).

n153 29 U.S.C. § 186(a) (1994). The pertinent part of the section provides:

It shall be unlawful for any employer ... to pay, lend, or deliver ... any money or other thing of value-- (1) to any representative of any of his employees who are employed in an industry affecting commerce; or (2) to any labor organization ... which represents, [or] seeks to represent ... any of the employees of such employer ... or (3) to any employee ... in excess of their normal compensation for the purpose of causing such employee ... to influence any other employees in the exercise of the right to organize and bargain collectively through representatives of their own choosing; or (4) to any officer or employee of a labor organization ... with intent to influence him in respect to any of his actions ... as a representative of employees.

Id; see also Phillips, 19 F.3d at 1574 (explaining that 29 U.S.C. § 186(b) prohibits representatives and union officials from receiving such payments); United States v. Local 359, 705 F. Supp. 894, 908 (S.D.N.Y.) (noting that where some managers, supervisors and employers are members of union, they are prohibited by 29 U.S.C. § 186 from paying dues to union), rescinded by 889 F.2d 1232 (2d Cir. 1989); Bell Atl. Network Servs., 670 F. Supp. at 419 (describing statutory framework of 29 U.S.C. § 186(a)).

n154 29 U.S.C. § 186(b) (1994). This section provides that "it shall be unlawful for any person to request, demand, receive, or accept ... payment, loan or delivery of any money or other thing of value prohibited by subsection (a)." Id. In 1995, Congress amended the language in 29 U.S.C. § 186(b)(2) with little substantive change to this provision. See ICC Termination Act of 1995, Pub. L. No. 104-88, Title III, § 337, 109 Stat. 803, 954 (1995).

n155 29 U.S.C. § 186(c),(d); see infra notes 183-198 and accompanying text (discussing the nine exceptions). Section 186(d)(1) provides that any person participating in a payment, loan, or delivery to a labor organization in payment of membership dues, which is not covered as an exception under 29 U.S.C. § 186(c)(4)-(9), willfully and with intent to benefit himself or other persons not permitted to receive a payment shall be guilty of a felony. Any person who willfully violates any other part of 29 U.S.C. § 186, shall be guilty of a felony, so long as the thing of value exceeds $ 1000, but she shall be guilty of a misdemeanor if the thing of value is less than $ 1000. 29 U.S.C. § 186(c), (d) (1994).

n156 29 U.S.C. § 186 (1994). Under 29 U.S.C. § 186(d)(1), if the transaction is in payment of membership dues, for payment to a joint labor-management trust fund, or for payment to a labor-management committee and does not satisfy the exceptions delineated in 29 U.S.C. § 186(c)(4)-(9), and is both willful and done with intent to benefit the employer or other persons not permitted to receive payment is unnecessary. 29 U.S.C. § 186(d)(2) (1994).

n157 29 U.S.C. § 152(2) (1994).

n158 Id.; see State Bank of India v. NLRB, 808 F.2d 526, 531 (7th Cir. 1986) (finding that branches of a foreign national bank operating in the United States were not exempt from being an "employer").

n159 See Camptown Bus Lines, Inc., 226 N.L.R.B. 4, 5 (1976) (stating that those divisions of a private bus company serving as municipality's school bus line were effectively a municipal service and, therefore, exempt).

n160 See United States v. Overton, 470 F.2d 761, 765 (2d Cir. 1972) (finding that payments by employers made through non-employer private corporation fall within activity prohibited by 29 U.S.C. § 186); Wabash Publ'g Co. v. Dermer, 650 F. Supp. 212, 215-16 (N.D. Ill. 1986) (holding that employer can still violate 29 U.S.C. § 186(a) for payments to union officials although employer does not employ members of the union).

n161 29 U.S.C. § 186(d) (1994).

n162 The First, Second, Third, Sixth, Ninth and Eleventh Circuits have found "willful" to require only proof of general intent. See United States v. Phillips, 19 F.3d 1565, 1578 (11th Cir. 1994) (finding that "willfully" only requires a finding of general intent); United States v. Cody, 722 F.2d 1052, 1059 (2d Cir. 1983) (requiring proof only that defendant received and knew that he was receiving a thing of value, chauffeuring service, and not that he requested such service from employers); United States v. Bloch, 696 F.2d 1213, 1216 (9th Cir. 1982) (holding that "willful" requires only that defendant know payments are from person acting in interest of employer); Jackson Purchase Rural Elec. Coop. Ass'n. v. Local Union 816, 646 F.2d 264, 266 (6th Cir. 1981) (stating that unwitting violation of law still "willful"); United States v. Pecora, 484 F.2d 1289, 1294 (3d Cir. 1973) (requiring knowledge only that there were payments and that the payments came from employers who employed workers represented by defendant labor union); see also United States v. Drew, 722 F.2d 551, 553 (9th Cir. 1983) (finding that willfulness means "a specific intent to do an act forbidden by law"); United States v. Silva, 517 F. Supp. 727, 735 (D.R.I. 1980) (stating that willfully means knowingly and intentionally committing act, not necessarily knowing that act is illegal), aff'd, 644 F.2d 68 (1st Cir. 1981).

n163 See United States v. Papia, 910 F.2d 1357, 1362 (7th Cir. 1990) (requiring "specific intent" and defining it so that the intent must be shown to do something the law forbids).

n164 See Arroyo v. United States, 359 U.S. 419, 423-24 (1959) (stating that employer might be guilty under 29 U.S.C. § 186(a) if money was paid to a representative of employees even though representative had no intention of accepting).

n165 See, e.g., United States v. Lippi, 193 F. Supp. 441, 442 (D. Del. 1961) (finding that life insurance premiums are a thing of value, but not "money" under 29 U.S.C. § 186).

n166 See Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386, 1397 (11th Cir.) (finding that monthly payment of pension benefits can be interpreted as a "thing of value" under 29 U.S.C. § 186), modified, 30 F.3d 1347 (11th Cir. 1994).

n167 See United States v. Carson, 52 F.3d 1173, 1177 (2d Cir. 1995) (finding that meals and entertainment qualified as things of value and thus violated 29 U.S.C. § 186); United States v. Cervone, 907 F.2d 332, 343-44 (2d Cir. 1990) (accepting inference that envelopes contained thing of value where employer referred to envelopes covertly and ascribed much importance to them in phone conversations with union representative); United States v. Schiffman, 552 F.2d 1124, 1126 (5th Cir. 1977) (holding that a hotel workers' union representative's demand for a room rate lower than even corporate rate was a demand for a thing of value).

n168 See 29 U.S.C. § 152 (1994) (giving definition of "employee" and other terms for purposes of Title 29).

n169 NLRB v. Bell Aerospace Co., 416 U.S. 267, 289 (1974).

n170 See NLRB v. Yeshiva Univ., 444 U.S. 672, 686 (1980) (holding that teaching faculty was "managerial" and excluded from the NLRA "employee" category because the faculty had almost complete control over academic matters). But see NLRB v. Florida Mem'l College, 820 F.2d 1182, 1187 (11th Cir. 1987) (stating that at an "immature" college, where deans make all decisions and professors merely teach and have no managerial duties, members of faculty are employees).

n171 29 U.S.C. § 152(11) (1994). This section defines supervisors as those who have authority in the interest of the employer to supervise, hire, fire, and recommend such actions. Id. Hospital nurses have been considered supervisors. See NLRB v. Health Care & Retirement Corp. of Am., 511 U.S. 571, 577-78 (1994) (rejecting NLRB's determination that staff nurses were not supervisors solely because their supervisory activity was not exercised in the interest of the employer and was incidental to treating patients); Desert Hosp. v. NLRB, 91 F.3d 187, 193 (D.C. Cir. 1996) (holding that hospital nurse was "supervisory" because she had own office, performed no direct care, oversaw non-unit employees, and screened new hires).

n172 American Radiator & Standard Sanitary Corp., 119 N.L.R.B. 1715 (1958). "Confidential employees" are those who act in a confidential capacity for persons who determine and effectuate management policies in the labor relations field. NLRB v. Hendricks County Rural Elec. Membership Corp., 454 U.S. 170, 190 (1981); see also NLRB v. Lorimar Prods., Inc., 771 F.2d 1294, 1298-1300 (9th Cir. 1985) (finding that company's estimators were not confidential employees because they did not work with company official authorized to make labor policy nor did the estimators have access to confidential information that could be used in contract negotiations).

n173 29 U.S.C. § 152(3) (1994); see Bayside Enters., Inc. v. NLRB, 429 U.S. 298, 303 (1977) (finding that "agricultural worker" covers anyone performing labor performed by a farmer or on a farm in conjunction with such farming operation). But see Holly Farms Corp. v. NLRB, 116 S. Ct. 1396, 1402-03 (1996) (holding chicken processing company's chicken catchers, forklift operators, and truck drivers who collected chickens from contract farmers to be "employees" and not "agricultural workers").

n174 29 U.S.C. § 152(3) (1994).

n175 Id.

n176 Id. The test for whether an individual is an independent contractor is the respondeat superior doctrine, which holds that if someone has the right of control and supervision over a person's work, then the person is an employee rather than an independent contractor. S. REP. NO. 80-1255, n. 21 (1948); see supra note 110 (discussing the employee/independent contractor distinction in the OSHA and FLSA contexts); see also Todd v. Benal Concrete Constr. Co., 710 F.2d 581, 584 (9th Cir. 1983) (finding that contract language alone cannot transform an independent contractor into an employee).

n177 See United States v. Ryan, 350 U.S. 299, 301-07 (1956) (interpreting "representative" broadly and holding that union president and principal negotiator was still a representative although he was not an "exclusive bargaining representative"); United States v. McGowan, 58 F.3d 8, 15 (2d Cir. 1995) (finding § 302(b) requires only functional, not elected, "representative"); cf. United States v. Persico, 621 F. Supp. 842, 874 (S.D.N.Y. 1985) (stating that one who is not a representative can violate 29 U.S.C. § 186(b) if she aids or abets a representative).

n178 29 U.S.C. § 186(b)(1) (1994); see McGowan, 58 F.3d at 15 (finding that, where representative received payment from employer of representative's employees, not important that payment was on behalf of a third party who did not employ those employees); United States v. DeBrouse, 652 F.2d 383, 388 (4th Cir. 1981) (finding that § 186(b) was violated where union official caused third party to receive funds from an employer even though official saw no benefit from the funds).

n179 See Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386, 1400 (11th Cir.) (holding that mere request by union's negotiators for unearned benefits violated 29 U.S.C. § 186(b)), modified, 30 F.3d 1347 (11th Cir. 1994).

n180 See United States v. Salerno, 964 F.2d 172, 174 (2d Cir. 1992) (determining whether defendant received illegal payoffs in violation of § 186(b)(1)); United States v. Local 1804-1, Int'l Longshoremen's Ass'n, 831 F. Supp. 177, 186 (S.D.N.Y. 1993) (finding that § 302(c) was violated when an official received kickback pay in the amount of $ 5 per container stripped).

n181 See United States v. Burge, 990 F.2d 244, 250 (6th Cir. 1992) (finding that money received by union representative who claimed that he was also serving the employer as a labor consultant violated 29 U.S.C. § 186).

n182 See United States v. Boffa, 688 F.2d 919, 934-36 (3d Cir. 1982) (holding that four separate violations of 29 U.S.C. § 186(a) occurred where employer made four separate payments to lease a car for employee representative for four months).

n183 29 U.S.C. § 186(c) (1994); see Local No. 2, Operative Plasterers & Cement Masons Int'l Ass'n v. Paramount Plastering, Inc., 310 F.2d 179, 186 (9th Cir. 1962) (holding that exceptions of § 186(c) should be interpreted narrowly).

n184 29 U.S.C. § 186(c)(1)-(3) (1994).

n185 United States v. Phillips, 19 F.3d 1565, 1579 (11th Cir. 1994).

n186 29 U.S.C. § 186(c)(1) (1994); see also Communications Workers of Am. v. Bell Atl. Network Servs., Inc., 670 F. Supp. 416, 423 (D.D.C. 1987) (holding that employees on leave of absence could receive fringe benefits, such as health coverage, from employer under § 186(c)(1)). The test for an illegal payment under this section focuses on whether the activities to be engaged in during the paid period are for one who is a bona fide employee of payor and not whether the activity benefits the employer directly. See Caterpillar, Inc. v. International Union, United Auto., Aerospace & Agric. Implement Workers, 107 F.3d 1052, 1057 (3d Cir. 1997) (holding that a union representative on leave of absence to handle grievances can receive pay without violation of the LMRA); BASF Wyandotte Corp. v. Local 227, Int'l Chemical Workers Union, 791 F.2d 1046, 1050 (2d Cir. 1986) (holding that company allowing paid time each day to union chairman to conduct union business would not violate § 186(c)(1)); NLRB v. BASF Wyandotte Corp., 798 F.2d 849, 855-56 (5th Cir. 1986) (same). In addition, benefits received while on leave of absence are not valid compensation for services unless the employee bargained for these benefits. See Toth v. USX Corp., 883 F.2d 1297, 1303-04 (7th Cir. 1989) (finding that pension benefits received while on leave violated the section where benefits accrued absent a bargaining agreement for them).

n187 29 U.S.C. § 186(c)(2) (1994); see also Toyota Landscaping Co. v. Southern Cal. Dist. Council of Laborers, 11 F.3d 114, 119 n.4 (9th Cir. 1993) (discussing second exception to § 186); White v. NFL, 836 F. Supp. 1458, 1493 (D. Minn. 1993) (explaining congressional intent behind second exception to § 186).

n188 29 USC § 186(c)(3) (1994); see White, 836 F. Supp. at 1494 nn. 78, 79 (holding that payments made at prevailing market price restriction of § 186(c)(3) do not apply to settlement payment exception of § 186(c)(2)).

n189 See supra Parts III.A.1. and III.A.2. of this Article for definitions and discussion of "employer" and "employee" in regard to FLSA.

n190 29 U.S.C. § 186(c)(4)-(9) (1994).

n191 United States v. Phillips, 19 F.3d 1565, 1579 (11th Cir. 1994).

n192 29 U.S.C. § 186 (c)(4) (1994); see also United States Can Co. v. NLRB, 984 F.2d 864, 869 (7th Cir. 1993) (finding that an employer violates § 186(c)(4) if it deducts union dues in absence of a real contract with a union); Agathos v. Starlite Motel, 977 F.2d 1500, 1509-10 (3d Cir. 1992) (rejecting argument that § 186(c)(4) precludes unions from receiving damages in the amount of lost dues due to a breach of contract); Building & Constr. Trades Dep't v. Reich, 820 F. Supp. 11, 13 (D.D.C. 1993) (discussing Secretary of Labor's discretion in interpreting this exception); cf. United Food & Commercial Workers Dist. Union Local One v. NLRB, 975 F.2d 40, 43-44 (2d Cir. 1992) (finding that written authorization under this exception may be revoked by employee); Associated Builders & Contractors v. Carpenters Vacation & Holiday Trust Fund, 700 F.2d 1269, 1275 n.6 (9th Cir. 1983) (finding that requirement to assess "membership dues" uniformly can be met by dues scheme relative to amount of employee earnings); Jackson Purchase Rural Elec. Coop. Ass'n. v. Local Union 816, 646 F.2d 264, 266-67 (6th Cir. 1981) (holding that implied agreement based on sixteen year practice of employer deducting union dues from employees' wages and then paying them to union not valid under § 186(c)(4)).

n193 29 U.S.C. § 186(c)(5)-(8) (1994); see also NLRB v. Unbelievable, Inc., 71 F.3d 1434, 1440 (9th Cir. 1995) (holding that continued employer payments to employee trust fund did not violate § 186(c)(5) where collective bargaining agreement had expired and negotiations to renew it had reached an impasse); Mason Contractors Ass'n of Am. v. International Council of Employers of Bricklayers & Allied Craftsmen, 853 F. Supp. 515, 524 (D.D.C. 1994) (discussing that appointing employer trustee of a rival association who was not party to the original trust would not necessarily violate the condition of § 186(c)(5) that employers and employees be equally represented in the administration of permitted trusts).

n194 29 U.S.C. § 186(c)(5) (1994). Employer and employee trustees must be equal in number and power. See Costello v. Lipsitz, 547 F.2d 1267, 1268-70 (5th Cir. 1977) (holding that no equality existed where employer trustees, although numerically equal to employee trustees, had exclusive control of hiring trust's employees).

n195 The Labor Management Cooperation Act allows the Federal Mediation and Conciliation Service to help establish committees for the purpose of improving labor-management relations, job security, or organizational effectiveness, enhancing economic development, or involving workers in decisions affecting their jobs. 29 U.S.C. § 175(a)(1)(B) (1994).

n196 United States v. Phillips, 19 F.3d 1565, 1579 (11th Cir. 1994); see also Local 144 Nursing Home Pension Fund v. Demisay, 508 U.S. 581, 584-87 (1993) (describing the structural requirements that 29 U.S.C. § 186(c)(5) imposes on employer sponsored trust funds established for the exclusive benefit of employees and holding that § 186(e) only gives district courts the power to restrain violations of § 186(a), (b), and not injunctive power to require that trust funds be administered in accordance with § 186(c)(5)); Walsh v. Schlect, 429 U.S. 401, 410 (1977) (holding that employer's contributions to employee trust fund were valid under § 186(c)(5), (6) where both signatory employees to a collective bargaining agreement and non-signatory employees worked on a contract and employer's contribution was measured by total hours worked and not just by those of the signatory employees).

n197 Phillips, 19 F.3d at 1580.

n198 Id.

n199 29 U.S.C. § 186(d)(1), (2) (1994). The federal sentencing guidelines provide for a base offense level of 10 for a bribery offense and of 6 for an illegal gratuity. UNITED STATES SENTENCING GUIDELINES § 2E5.1(a) (1998) [hereinafter U.S.S.G.]; see also U.S.S.G. § 2E5.1(b)(1) (1998) (requiring that offense level be increased by 2 if the defendant was a fiduciary of a labor organization); U.S.S.G. § 2E5.1(b)(1) (1998) (requiring an increase in offense level using § 2F1.1 table based on the greater of the value of the prohibited payment or the improper benefit to the payer).

n200 29 U.S.C. § 186(d)(1), (2) (1994).

n201 See Local 144 Nursing Home Pension Fund, 508 U.S. at 584-87 (describing the structural requirements that § 186(c)(5) imposes on employer sponsored trust funds established for exclusive benefit of employees and holding that § 186(e) gives district courts only the power to restrain violations of § 186(a)-(b) and not injunctive power to require that trust funds be administered in accordance with § 186(c)(5)).

n202 Id. at 584-87.

n203 Labor-Management Reporting and Disclosure Act of 1959, Pub. L. No. 86-257, 73 Stat. 535 (codified as amended in scattered sections of 29 U.S.C.).

n204 See 29 U.S.C. § 401 (1994). Congress intended that unions and their officials "adhere to the highest standards of responsibility and ethical conduct in administering the affairs of their organization" in an effort to "eliminate or prevent improper practices" in the labor management field. Id.

n205 See United States v. Silverman, 430 F.2d 106, 126 (2d Cir.) (finding that embezzlement violated § 501(c)) modified, 439 F.2d 1198 (2d Cir. 1970).

n206 See United States v. Harmon, 339 F.2d 354, 357 (6th Cir. 1965) (finding that takings included larceny, theft, and conversion).

n207 29 U.S.C. § 501(c) (1994) provides as follows:

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.

29 U.S.C. § 501(c) (1994).

n208 United States v. Sullivan, 498 F.2d 146, 150 (1st Cir. 1974) (finding that statute may be violated passively by willing acceptance of unauthorized salary increases and Christmas bonuses).

n209 See infra Part V.A.4 (discussing lack of benefit or union authorization).

n210 Sullivan, 498 F.2d at 149 (finding that defendant occupied the office of "Guard," with functions consisting of watching the door during meetings to ensure that only union members in good standing entered).

n211 United States v. Ford, 462 F.2d 199, 200-01 (7th Cir. 1972) (finding that chapel chairman is "officer" for purposes of LMRDA provision).

n212 United States v. Capanegro, 576 F.2d 973, 978 (2d Cir. 1978) (finding that an attorney who had retainer agreement with union could be convicted of § 501(c) violation).

n213 According to the First Circuit, failure to "set forth ... a sufficient allegation as to fiduciary relationship ... makes very little difference." Colella v. United States, 360 F.2d 792, 800 (1st Cir. 1966). A § 501(c) indictment charges the defendant with committing a new statutory offense covering four types of takings: embezzlement, larceny, conversion and abstraction. Id. at 799. The court could not "imagine facts constituting embezzlement which would not also, absent a fiduciary relationship, make out unlawful and willful abstraction or conversion." Id. at 799-800.

n214 See United States v. Briscoe, 65 F.3d 576, 583 (7th Cir. 1995) (convicting defendant of illegally obtaining money and property from the Chicago APWU and its members through false "associate membership" fees). But see United States v. Belt, 574 F.2d 1234 (5th Cir. 1978) (finding that prosecution evidence failed to show defendant intentionally participated in unlawful taking of funds).

n215 29 U.S.C. § 501(c) (1994). Although § 501(c) created a new federal crime, the terms in the statute retained their common law meaning. Woxberg v. United States, 329 F.2d 284, 290 (9th Cir. 1964); see also Colella, 360 F.2d at 799 ("to the extent that terms with a traditional meaning are used, those meanings are still applicable").

n216 United States v. Beros, 833 F.2d 455, 458 (3d Cir. 1987) (finding defendant to be guilty of violating § 501(c) when he and his wife used union funds ostensibly to attend a union conference in Florida, and they flew, rented a luxury hotel suite, and extended their trip for personal reasons, all on money reserved for union usage).

n217 See United States v. Carson, 52 F.3d 1173 (2d Cir. 1995) (finding that defendant's draw of full salary while working for the union part-time constituted embezzlement of union funds under § 501(c)); United States v. Pavloski, 574 F.2d 933, 935 (7th Cir. 1978) (stating that by appropriating forged union checks, defendant converted union funds in the form of commercial paper).

n218 See White v. Fosco, 599 F. Supp. 710, 714 (D.D.C. 1984) (finding that attorney's fees earned in private, rather than union capacity, were not union property for the purposes of LMRDA provision).

n219 United States v. Stubin, 446 F.2d 457, 461 (3d Cir. 1971). See United States v. Walsh, 928 F.2d 7 (1st Cir. 1991) (finding that prosecution showed pattern of union official's receipt of funds in excess of his demonstrated expenses); United States v. Floyd, 882 F.2d 235 (7th Cir. 1989) (concluding that prosecution showed that union trustee arranged to have a union automobile stolen, then was reimbursed with union's insurance funds); United States v. Stockton, 788 F.2d 210 (4th Cir. 1986) (stating that bank records revealed that union president converted funds to his own use). But see United States v. Price, 788 F.2d 234 (4th Cir. 1986) (stating that defendants could not be convicted of embezzling forms in violation of § 501(c) where forms were used for their intended purpose, and not for defendants' use); United States v. Marolda, 648 F.2d 623 (9th Cir. 1981) (finding that evidence did not lead to reasonable inference that defendant purchased gasoline for non-union purposes).

n220 Floyd, 882 F.2d at 241; Stubin, 446 F.2d at 460; United States v. Dibrizzi, 393 F.2d 642, 645 (2d Cir. 1968).

n221 See United States v. Durnin, 632 F.2d 1297, 1300 (5th Cir. 1980) (stating that misuse of union funds under § 501(c) must be coupled with fraudulent intent to deprive the union of funds); United States v. Local 1804-1, Int'l Longshoremen's Ass'n, 812 F. Supp. 1303, 1330 (S.D.N.Y.) (concluding that fraudulent intent is cornerstone of § 501(c) violation), modified, 831 F. Supp. 167 (S.D.N.Y. 1993), aff'd, 52 F.3d 1173 (2d Cir. 1995), cert. denied, 116 S. Ct. 934 (1996).

n222 See United States v. Walsh, 928 F.2d 7, 12 (1st Cir. 1991) (stating that an essential element in § 501(c) is that defendant act with knowledge that his appropriation of property is unauthorized); United States v. Gibson, 675 F.2d 825, 828 (6th Cir. 1982) (holding that abstraction of funds must be unlawful and willful under § 501(c)).

n223 United States v. Welch, 728 F.2d 1113, 1118 (8th Cir. 1984); see also