Education and Workforce Committee Chairman Tim Walberg (R-MI) and Health, Employment, Labor, and Pensions Subcommittee Chairman Rick Allen (R-GA) have requested an explanation from the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) regarding its handling of unused strike funds. The two lawmakers sent a letter to UAW President Shawn Fain asking why the union has not reinvested unused strike funds back into the stock market as initially planned.
In their letter, Walberg and Allen wrote: “The Committee on Education and Workforce (Committee) is investigating whether the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) and its responsible officers breached their fiduciary duties under the Labor-Management Reporting and Disclosure Act (LMRDA) by failing to reinvest hundreds of millions of dollars in unused strike benefit funds in accordance with the union’s own investment policy. Reportedly, the UAW sold roughly $340 million in stocks to help cover strike benefits. Any funds that weren’t used were expected to be reinvested according to the union’s existing investment policy. Yet more than a year later, the promised reinvestment had not occurred, costing UAW members an estimated $80 million in foregone gains.”
The letter also stated: “As a result of this failure, UAW members could face higher union dues or reduced strike benefit payouts as the UAW attempts to recoup the gains it forfeited. Further, the alleged lapse potentially would have denied UAW members the full benefit of the historic market rally after the Dow Jones Industrial Average, the S&P 500, and Nasdaq each notched record highs in the months following President Trump’s election.”
It concluded: “Any prolonged failure to restore the Strike and Defense Fund’s equity allocation would appear inconsistent with these statutory duties and would raise serious concerns about the stewardship of UAW members’ dues.”
The committee’s inquiry centers on whether there was a breach of fiduciary duty under federal labor law related to investment practices involving union member funds.
