2016 Should be the Year Persuader Rulemaking Takes Effect and is Litigated

Five years ago, the Department of Labor (DOL) first issued the proposed regulation to expand employer disclosure requirements about lawyers and consultants hired to help combat union organizing and collective bargaining activities. The rule would revise the DOL’s interpretation of the Labor-Management Reporting and Disclosure Act by narrowing the law’s “advice” exemption as it applies to employers reporting people hired as labor relations persuaders.

The word “persuader” is too narrowly defined for the current Administration, and according to the DOL, NLRB, and labor unions, gives employers and consultants a free pass from reporting unless the consultants they hire talk directly to the employees. For a DOL spokesman has said, “Under that interpretation, even if the consultants script every word that the employer says to employees, the employer and consultant can keep the consultant’s activities secret. This update will make employer reporting on expenditures related to organizing campaigns similar to reporting already required of unions.” The DOL’s perspective may have some traction when dealing with consultants. But, it completely disregards the attorney-client privilege, which is why the American Bar Association opposes the change.

On December 7, 2015, the Department of Labor-Management Standards sent the persuader rule to the Office of Management and Budget for final review. The agency estimated in its fall regulatory agenda that the rule will be published in March 2016. If published, I expect multiple lawsuits trying to stop it. For example, a lawsuit could argue that the regulation is arbitrary and capricious under the Administrative Procedure Act. The American Bar Association will likely challenge it on the basis that it infringes on the attorney-client privilege. Congress could also mount a Congressional Review Act challenge of the rule, potentially preventing its implementation if a motion of disapproval is then signed by the president. But, which president will be in office if a motion is made?

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.