DOL Game-Changing “Persuader Rule” Set to Take Effect in November 2013

July 9, 2013 /

The Department of Labor recently announced a November 2013 target implementation date for its revised, i.e. skewed against employers, “advice exemption” in the Labor Management Reporting and Disclosure Act (LMRDA).

Currently, companies are not required to disclose to the federal government when they receive advice relating to labor relations, from who they received the advice, how much they paid for the advice, and the content of the advice. This is all about to change. The revised regulations impose expansive reporting requirements on employers, their labor relations consultants and possibly their attorneys representing an unprecedented intrusion into the attorney-client relationship.

The current LMRDA provides financial reporting and disclosure requirements for labor organizations, their officers and employees. Employers are only required to report agreements with labor relations consultants when the consultant undertakes activities to persuade employees to exercise or not to exercise their right to organize a union and bargain collectively. Attorney-client communication is rightfully exempt from disclosure.

The DOL’s proposed revisions require a company to report whenever it receives advice regarding labor relations. Specifically, “with respect to persuader agreements or arrangements, “advice” means an oral or written recommendation regarding a decision or a course of conduct. In contrast to advice, “persuader activity” refers to a consultant’s providing material or communications to, or engaging in other actions, conduct, or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively. Reporting is thus required in any case in which the agreement or arrangement, in whole or in part, calls for the consultant to engage in persuader activities, regardless of whether or not advice is also given.”

Come November 2013, if the DOL hits its target implementation date, reportable activities will include:

  • drafting, revising, or providing materials or communication to an employer for presentation or distribution to employees;
  • administering employee attitude surveys concerning union awareness or “proneness”;
  • training supervisors to conduct meetings designed to persuade employees;
  • directing activities of supervisors to engage in the persuasion of employees;
  • establishing employee committees;
  • developing employer personnel policies designed to persuade employees; and/or
  • deciding which employees to target for persuader activity or disciplinary action.

Astonishingly, reportable activity will also include the mere supplying of information to an employer concerning the activities of employees or a labor organization in connection with a labor dispute involving that employer. “Labor dispute” is defined very broadly to include not only issues regarding representation or association, but also “any controversy concerning terms, tenure, or conditions of employment.” Examples of reportable activity include:

  • research or investigation concerning employees or labor organizations;
  • employees, employee representatives, or union meetings; and
  • surveillance of employees or union representatives (video, audio, Internet, or in person).

The proposed regulations require employers and their counsel to report the details of these third-party relationships and the specific activities performed regardless of whether the third-parties have any direct contact with employees, as well as provide receipts and disbursements reports for any payments related to the reportable activities.

This rule has already faced significant legal challenge. The American Bar Association, Association of Corporate Counsel, and the Ohio State Bar Association to name a few have urged the DOL to leave the interpretation of the advice exemption as it has long been understood, arguing that the proposed rules are inconsistent with both the statutory language of the LMRDA and the rules of professional conduct pertaining to lawyer-client confidentiality.

Matt Austin is a Columbus, Ohio lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. Austin Legal’s Concierge Legal Services program is relied upon by companies to remain compliant and competitive. If you have employees, you need Concierge Legal Services. You can call Matt at (614) 285-5342 or email him at Austin@LaborEmploymentOSHA.com.