AO 2007-13: Union and association SSFs not affiliated

The United American Nurses, AFL-CIO (the Union) and the American Nurses Association (the Association) are not affiliated under the Federal Election Campaign Act and Commission regulations. Thus, a separate segregated fund (SSF) established by the Union would not be affiliated with the Association’s SSF.

Background

The Association

The Association is a national professional organization dedicated to advancing the standing and interests of registered nurses (RNs). It is composed of 75 disparate nursing-related organizations, including the Association’s 54 constituent member associations (state nursing associations), the Union, the Center for American Nurses, 16 national nursing organizations and three related entities. In addition, 1,182 individuals who are not otherwise members of a state nursing association are members of the Association.

The Association’s governmental structure consists of a House of Delegates with 675 delegates, including 600 who are elected by the state nursing associations, fifteen Association directors and officers and 60 delegates from other Association affiliates, including only one delegate from the Union (the Union president). Of the 675 delegates, approximately 630 have voting rights. The Association’s Board of Directors, elected by the delegates, handles the Association’s day-to-day operations.

While the Association itself has never made union representation of RNs a significant focus, 27 of its state nursing association members are considered “labor organizations” under the National Labor Relations Act. 29 U.S.C. §152(5). These 27 state nursing associations engage in collective bargaining on behalf of their eligible RN members.

In 1999, the RNs represented for collective bargaining by the state nursing associations created the Union as an independent organization within the Association to serve as the national union for the state nursing associations that engaged in collective bargaining. The Association granted the Union autonomy in all things required by law to be addressed by a labor union.

The Union

The Union is an unincorporated national labor organization. Its highest governing body is its National Labor Assembly, comprising delegates elected by individual RNs represented in collective bargaining by the state nursing associations and the national bargaining councils. The National Labor Assembly has the authority, among other things, to develop labor policies for Union members, collect Union dues and develop the Union’s strategic plan. The National Labor Assembly also elects, from among the Union-represented RNs, the Union’s Executive Council, which sets Union priorities, policies and procedures and determine membership status within the Union.

Originally, the Association’s Executive Director had the authority to “manage” the Union, including implementing National Labor Assembly and Executive Council policies and appointing the Union’s Program Director. The Association also provided the Union with staff and financial support.

In 2001 the AFL-CIO granted a charter to the Union as a direct affiliate. This charter was granted only to the Union, and not to the Association.¹ In 2002 the Union and the Association negotiated a new relationship in which the Union became a wholly autonomous organization with its own finances, governance, staff and direction. The Association created new bylaws following the agreement, and the Union drafted its own constitution, which now excludes the Association from any participation in the Union’s governance.

Analysis

The Act and Commission regulations provide that political committees, including SSFs, that are established, financed, maintained or controlled by the same corporation, labor organization, person or group of persons, including any parent, subsidiary, branch, division, department or local unit thereof, are affiliated. 11 CFR 100.5(g)(2) and 110.3(a)(1)(ii). Contributions made to or by such political committees are considered to have been made to or by a single political committee. 2 U.S.C. 441a(a)(5); 11 CFR 100.5(g) (2) and 110.3(a)(1).

In some cases, organizations are considered to be per se affiliated under Commission regulations. For example, a national or international union is considered per se affiliated with its local or subordinate organizations, and a membership organization is considered per se affiliated with its state or local subordinate organizations. 11 CFR 100.5(g)(3) (ii), (iv) and (v); 110.3(a)(2)(ii), (iv) and (v).

In this case, the Association is not a “labor organization” and therefore is not a local union or subordinate organization of the Union. 11 CFR 100.134(b). Similarly, while the Association might qualify as a membership organization, the Union is not a related state or local subordinate organization. 11 CFR 100.134(e). Thus, the Union and the Association are not per se affiliated.

When entities do not meet any definition of per se affiliation, Commission regulations provide for an examination of various factors in the context of the overall relationship to determine whether one sponsoring organization has established, financed, maintained or controlled the other sponsoring organization or committee and, thus, whether their respective SSFs are affiliated. 11 CFR 100.5(g)(4)(i) and (ii)(A)-(J) and 110.3(a)(3)(ii) and (ii)(A)-(J). The most relevant affiliation factors in this case are discussed below.

Directing or participating in governance

One affiliation factor addresses whether a sponsoring organization has the authority or ability to direct or participate in the governance of the other through provisions of their rules or by laws, or through their formal or informal practices. 11 CFR 100.5(g)(4)(ii) (B) and 110.3(a)(3)(ii)(B). Under the Union’s constitution and the Association’s bylaws, the Association cannot participate in the governance of the Union, and the Union can only minimally participate in the governance of the Association. The Union President has an ex officio seat on the Association’s Board of Directors and, in this capacity, may vote on certain matters before the Association’s House of Delegates, representing 0.16 percent of the votes cast by delegates. The Union President may not vote in the election of the Association’s officers and directors.

The Union President is also one of the Association’s 17 Directors on the Board. The Association President may exclude the Union President from business or confidential matters. Apart from the Union President’s participation on the Board, no Union representative may direct or participate in the governance of the Association’s SSF. The Union’s current Vice President was elected to the Association’s Board of Directors in her individual capacity and does not represent the Union on the Association’s Board. The Union Vice President, like the Union President, is described as being excluded from discussions regarding the Union. Overall, each organization has, at best, a minimal ability to participate in the governance of the other, giving neither organization direction over, or control of, the governance of the other organization.

Common or overlapping membership

Another significant affiliation factor in this case is whether a sponsoring organization has common or overlapping membership with another sponsoring organization, which indicates a formal or ongoing relationship between the organizations. 11 CFR 100.5(g)(4)(ii)(D) and 110.3(a)(3)(ii)(D).

The only Union members who are eligible to join the Association directly are those who are not also members of a state nursing association—fewer than 500 of the Union’s 97,000 members are currently described as falling into this category. Thus, assuming that each eligible Union member becomes an individual member of the Association, only 0.5 percent of the Union’s membership would directly overlap with the Association’s membership.

There is also some indirect overlap between the individual members in the Union and individual members in the state nursing associations that are, themselves, members of the Association. Approximately 97,000 individual members of the Union are members of the 27 state nursing associations that engage in collective bargaining. There are approximately 157,000 individual members in the 54 state nursing association members of the Association, creating a maximum possible indirect overlap of about 62 percent.

In this case, the Commission determined that any direct or indirect overlap in membership between the Union and the Association results from the negotiated agreement separating the two organizations. The Union’s Constitution provides that any RN who is a member of the Association’s state nursing associations that engage in collective bargaining will be eligible for Union membership. The RN is then described as being free to join or not to join the Union as an individual member, and is free to maintain or terminate his or her membership in the Association through the state nursing association. Thus, even if there is significant overlap in membership, the overlap alone is not sufficient evidence that one organization currently finances, maintains or controls the other. See AO 2004-41.

Overlapping officers and employees

Two additional affiliation factors address whether a sponsoring organization has common or overlapping officers or employees with another sponsoring organization, which indicates a formal or ongoing relationship, and whether a sponsoring organization has any members, officers or employees who were members, officers or employees of another sponsoring organization, indicating a formal or ongoing relationship or the creation of a successor entity. 11 CFR 100.5(g) (4)(ii)(E) and (F) and 110.3(a)(3)(ii) (E) and (F).

Initially, the Association’s staff performed all of the staff functions for the Union. However, the organizations stopped sharing staff after their relationship was re-negotiated. Now the Union and the Association have only one official overlapping decision-maker, the Union President, and one unofficial overlapping officer, the Union Vice-President. Any Union member who runs for one of the 15 elected seats on the Association’s Board of Directors at the House of Delegates meeting is described as serving in an individual capacity, not as a Union representative. Moreover, only three of the Union’s twenty-four staff members were formerly employed by the Association.

Provision of goods and funds

The affiliation factors also address whether a sponsoring organization provides goods in a significant amount or on an ongoing basis to another sponsoring organization, and whether a sponsoring organization causes or arranges for funds in a significant amount or on an ongoing basis to be provided to another sponsoring organization. 11 CFR 100.5(g)(4)(ii)(G) and (H) and 110.3(a)(3)(ii)(G) and (H).

Although the two organizations share office space and the Association performs some administrative tasks for the Union, the Union pays the Association for the space and services, and these payments do not represent a significant portion of the Association’s receipts. These payments do not suggest affiliation.

The Association also agreed to make a one-time grant of $740,000 in working capital and transitional support to the Union upon the restructuring of the two organizations. The Commission has in past advisory opinions recognized that these types of transactions can be part of the transition to independence for one organization, rather than a sign of affiliation. See AO 2000-28. Here, the one-time grant is part of the process of establishing the Union’s independence and separation from the Association.

Role in the formation of another organization

Finally, an affiliation factor considers whether a sponsoring organization had an active or significant role in the formation of another sponsoring organization. 11 CFR 100.5(g)(4)(ii)(I) and 110.3(a) (3)(ii)(I). In past advisory opinions, the Commission has recognized that one organization’s creation of another does not, in and of itself, make the two organizations permanent affiliates. See AOs 2004-41 and 2000-36. Considering the steps taken in this case to sever operational and financial ties, this factor alone does not indicate current affiliation.

Conclusion

The Association and the Union are not affiliated under the factors discussed above, including the separation of the staffs, treasuries and functions of the two organizations, the minimal overlap in governance and the minimal direct overlap in membership. Accordingly, if the Union were to establish an SSF, that political committee would not be affiliated with the Association’s SSF.

Date Issued: September 25, 2007; Length: 12 pages.

¹ The AFL-CIO charters only labor organizations whose principal function is collective bargaining representation. The Association, a professional organization, was and is ineligible for a charter.