Friday, March 25, 2016

DOL's “Persuader Rule” goes live; unions rejoice

The U.S. Department of Labor has issued its long awaited Final Rule reinterpreting the “Advice Exemption” to the Labor Management Reporting and Disclosure Act, otherwise known as the “persuader” rule.

What does this mean for you? In summary, it means that if you engage an outside law firm or other consultant to provide advice, or to otherwise represent you concerning employee organizing, concerted activities, or collective bargaining activities, you must report that engagement to the DOL, and, therefore, also to the union.

The LMRDA has long required employers to report to labor unions any actions, conduct or communications that are in any way undertaken to affect an employee’s decisions regarding his or her representation or collective bargaining rights. However, this rule has also had a longstanding exemption for communications from an employer’s attorney. As long an employer’s lawyer or consultant did not communicate directly with employees, and as long as the employer remained free to accept or reject any prepared materials, the Advice Exemption excluded their disclosure or reporting.

The Final Rule, however, requires employers and their outside law firms to files reports anytime the attorney or consultant provides guidance to the employer without speaking or otherwise directly communicating with employees, with no exemption for communications from an employer’s attorney:
Every employer who … made … any agreement or arrangement with a labor relations consultant or other independent contractor or organization pursuant to which such person undertakes activities where an object thereof, directly or indirectly, is to persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing, or undertakes to supply such employer with information concerning the activities of employees or a labor organization in connection with a labor dispute involving such employer, except information for use solely in conjunction with an administrative or arbitral proceeding or a criminal or civil judicial proceeding … shall file with the Secretary a report … showing in detail the date and amount of each such payment, loan, promise, agreement, or arrangement and the name, address, and position, if any, in any firm … of the person to whom it was made and a full explanation of the circumstances of all such payments, including the terms of any agreement or understanding pursuant to which they were made.
According to Secretary of Labor Thomas Perez, “The final rule … is designed to ensure workers have the information they need to make informed decisions about exercising critical workplace rights such as whether to form a union or join a union.” Others, however, including the American Bar Association, believe the rule interferes with the attorney-client relationship by mandating the release and disclosure of information long understood to be protected by privilege.

What does this mean? Think of the unintended consequences. If an employer has to report the retention of attorneys and other consultants, this Rule creates a huge incentive for an employer to tackle union campaigns alone. As pointed out by the U.S. Chamber of Commerce, “Ultimately, this will limit employer access to counsel and stifle employer speech, thereby providing more opportunities for unions to catch unsuspecting employers mistakenly running afoul of complicated labor laws.” To look at it another way, unions are professionals at organizing; employers are not. If an employer has to go it alone, which side has the advantage?

Where do we go from here? Almost certainly to federal district court, where opponents of the Persuader Rule will try to block its implementation. Otherwise, this rule takes effect in 90 days, and, if your employees are collectively bargained, or a union is attempting to collectively bargain, you will have to start reporting this information. Coupled with the NLRB’s Ambush Election Rules, it’s looking like a pretty good time to be a labor union.