[Code of Federal Regulations]
[Title 29, Volume 2]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR453.21]

[Page 210]
 
                             TITLE 29--LABOR
 
  CHAPTER IV--OFFICE OF LABOR-MANAGEMENT STANDARDS, DEPARTMENT OF LABOR
 
PART 453_GENERAL STATEMENT CONCERNING THE BONDING REQUIREMENTS OF THE 
LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT OF 1959--Table of Contents
 
Sec. 453.21  Interests held in agents, brokers, and surety companies.

    (a) Section 502(a) of the Act prohibits the placing of bonds 
required therein through any agent or broker or with any surety company 
in which any labor organization or any officer, agent, shop steward, or 
other representative of a labor organization has any direct or indirect 
interest. The purpose of this provision, as shown by its legislative 
history, is to insure against the existence of any ``financial or other 
influential'' interests which would affect the objectivity of the action 
of agents, brokers, or surety companies in bonding the personnel 
specified in the section. \11\ It appears, therefore, that it was the 
intent of Congress to prevent the placing of bonds through agents or 
brokers, and with surety companies, in which any labor organization or 
any officer, agent, shop steward, or other representative of a labor 
organization holds more than a nominal interest.
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    \11\ Daily Cong. Rec. 9114, Senate, June 8, 1959; Record of Hearings 
before a Joint Subcommittee of the Committee on Education and Labor, 
House of Representatives, 86th Congress, 1st Session, on H.R. 3540, H.R. 
3302, H.R. 4473 and H.R. 4474, p. 1607.
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    (b) Since the statute provides that either a direct or indirect 
interest by a labor organization or by the specified persons may 
disqualify an agent, broker, or surety company from having a bond placed 
through or with it, the disqualification would be effective if a labor 
organization or any of the specified persons are in a position to 
influence or control the activities or operations of such brokers, 
agents, or surety companies, by virtue of interests held either directly 
by them or by relatives or third parties which they own or control. The 
question of whether the relationship between the labor organization or 
the specified persons on the one hand, and another party or parties 
holding an interest in a broker, agent, or surety company on the other 
hand, is so close as to put the former in a position to influence or 
control the activities or operations of such broker, agent, or surety 
company through the latter, presents a question of fact which must 
necessarily be determined in each case in the light of all the pertinent 
circumstances.
    (c) It is also to be noted that the statute does not appear to 
restrict the disqualification to cases in which a direct or indirect 
interest is held by a labor organization as a whole, or by a substantial 
number of officers, agents, shop stewards, or other representatives of a 
labor organization, but provides for the disqualification also in cases 
where any one officer, agent, shop steward, or other representative of a 
labor organization holds such an interest.

[28 FR 14394, Dec. 27, 1963, as amended at 63 FR 33780, June 19, 1998]

                        Miscellaneous Provisions