DOL’s Persuader Rule Nears Fruition
After years of delay, the Departments of Labor’s “persuader” rule is inching closer to publication. On December 7, DOL’s Office of Labor-Management Standards, taking the final step before a rule can be published, sent a proposed final rule to the Office of Management and Budget. Previously scheduled to be finalized in December 2015, the “persuader” rule is now slated for finalization in March 2016 according to the Administration’s autumn 2015 Unified Regulatory Agenda — which said given the OMB’s traditional review timetable, it is quite feasible that the rule could be released even earlier in 2016. If the final rule is similar to the proposed rule of 2011, it could have significant consequences for employers.
Through the proposed rule, the DOL is attempting to revise the interpretation of “advice” as it pertains to the employer and labor relations consultant persuader reporting requirements of Section 203 of the Labor-Management Reporting and Disclosure Act (LMRDA). The proposal would increase reporting requirements for employers facing union organizing campaigns on almost any communication with employees about unions if a consultant or attorney has assisted the employer. Currently, under the LMRDA an employer must report any agreement or arrangement with a third-party consultant to persuade employees about union organizing.
However, attorneys and other consultants hired to provide advice to employers facing organizing campaigns generally do not trigger the reporting requirement unless they speak directly to employees. DOL’s proposal would significantly narrow this “advice exemption,” requiring employers to report substantially more information, including correspondence with attorneys. Under the proposed rule, employers and consultants or attorneys would need to file extensive forms detailing their agreements, salaries paid and other clients if they participated in “persuader activity.” Failure to comply with the filing requirements would result in criminal sanctions.
The proposed rule, in conjunction with the National Labor Relations Board’s December 12, 2014 final rule dramatically changing union representation elections, the NLRB’s decision in Purple Communications (finding that employees have a right under the NLRA to use their employer’s e-mail system for organizing purposes) and its decision in Browning-Ferris Industries (which vastly expanded the standard for determining when two separate entities are considered “joint employers” of a group of employees) will make compliance with labor law in the face of a union organizing drive incredibly complicated.
More than 9,000 comments were filed on the proposal, including comments by CUPA-HR and the American Bar Association saying the rule would violate attorney-client privilege. In light of the severe impact the proposed rule will have on the relationship between employers and outside attorneys, there is likely to be a slew of lawsuits seeking to invalidate the new rule as soon as it is released.