N.Y. Labor Law § 723: Specific prohibited financial interests and transactions

§ 723. Specific prohibited financial interests and transactions. 1.

Without limiting his fiduciary obligation provided in section seven

hundred twenty-two, it shall constitute a violation of his fiduciary

obligation for an officer or agent of a labor organization:

(a) To have, directly or indirectly, any financial interest in any

business or transaction of either an employer whose employees his labor

organization represents or seeks to represent for purposes of collective

bargaining, or an employer who is in the same industry as such an

employer;

(b) To have, directly or indirectly, any financial interest in the

business or transaction of any person who sells to, buys from, or

otherwise deals with (i) an employer whose employees his labor

organization represents or seeks to represent for purposes of collective

bargaining, or (ii) an employer organization which represents such

employer, or (iii) an employer who is in the same industry as such an

employer;

(c) To have, directly or indirectly, any financial interest in the

business of any person who sells to, buys from, or otherwise deals with

his labor organization;

(d) To have, directly or indirectly, any financial interest in any

transaction with his labor organization for the purchase or sale of

property or services, except reasonable compensation for services

rendered by him to such organization as officer or agent;

(e) To receive, directly or indirectly, any payments, loans, or gifts

from (i) an employer whose employees his labor organization represents

or seeks to represent for purposes of collective bargaining, or (ii) an

employer organization which represents such employer, or (iii) an

employer who is in the same industry as such an employer; provided,

however, that such an officer or agent may receive reasonable

compensation for services rendered by him as an employee of such

employer, or payments required by collective agreement to be made in

lieu of wages for time lost from work while engaged in collective

bargaining, handling of grievances, or otherwise in the administration

of a collective agreement;

(f) To lend any funds of the labor organization, directly or

indirectly, to either any officer, agent, or employee of such

organization, or any business in which an officer, agent, or employee of

such organization has, directly or indirectly, a financial interest;

provided, however, that loans may be made from a loan fund which has

been set aside in accordance with a written resolution of the governing

board of the labor organization for the specific purpose of making

personal loans to its officers, agents, and employees generally, in

compliance with established, written rules; or

(g) To lend or invest any funds of the labor organization, directly or

indirectly, in any business of an employer whose employees his labor

organization represents or seeks to represent for purposes of collective

bargaining, except where the governing board of the labor organization

has adopted a written resolution finding and determining that such loan

or investment will promote the best interests of the employees and will

not adversely affect collective bargaining.

2. The fact that conduct or acts of an officer or agent of a labor

organization have not caused damage to such organization or any of its

members, or have been ratified or acquiesced in by such organization or

its members, shall not be relevant in determining whether such conduct

or acts constitute a violation by such officer or agent of any of the

obligations provided in section seven hundred twenty-two and in this

section.

3. Nothing contained in this section shall prohibit an officer or

agent of a labor organization from:

(a) holding a financial interest acquired as an employee through a

regularly established employee benefit plan, including a stock purchase,

profit sharing, pension or retirement plan;

(b) holding securities traded on a securities exchange registered as a

national exchange under the securities exchange act of nineteen hundred

thirty-four, or securities traded on over-the-counter markets within the

meaning of such act, or shares in an investment company registered under

the investment company act of nineteen hundred forty, or securities of a

public utility holding company registered under the public utility

holding company act of nineteen hundred thirty-five, and all federal

laws amendatory and supplemental to such acts; provided, however, that

any investment in such securities or shares shall not constitute more

than one per cent of the outstanding securities or shares of the

respective class or classes of securities or shares which he holds;

(c) lending to, or investing in, any business owned predominantly by a

labor organization or labor organizations; or

(d) receiving gifts, otherwise lawful, from employers whose employees

his labor organization represents and from employer organizations which

represent such employers, provided the cumulative retail value of such

gifts from all such employers and employer organizations does not exceed

one hundred dollars in any calendar year.

4. Nothing contained in this section shall prohibit any labor

organization from:

(a) Acquiring a nominal number of shares in any corporation for the

purpose of qualifying as stockholder in order to obtain financial

statements of the corporation; or

(b) Lending to, or investing in, any business owned predominately by a

labor organization or labor organizations.