DOL Releases Persuader Rule
Last week, the Department of Labor (DOL) released the final version of its “Persuader Rule.” This rule requires both employers and attorneys (or other advisors) hired during a union organizing campaign to file new disclosure reports with DOL. It will be fully effective on April 25.
DOL’s rule amends the Labor-Management Reporting and Disclosure Act (LMRDA). Under that law, only direct contact between the attorney and the employees—where the attorney tries to persuade the employees against joining a union—would trigger the LMRDA disclosure requirements.
While direct persuader activities start the reporting requirements, indirect activities were never subject to the LMRDA disclosure requirements. They were specifically excluded under the law’s “advice exemption.”
The advice exemption allowed attorneys to discuss a strategy with an employer and devise a plan to deal with the union campaign. The employer would then go forward and implement the plan himself. This had been the rule for more than fifty years.
Unfortunately, this new rule removes the advice exemption. As such, all direct and indirect contact with employees now causes the LMRDA disclosure requirements to kick in.
Specifically, the Persuade Rule defines “indirect persuader activities” as an attorney or advisor:
- Planning, directing or coordinating supervisors’ or managers’ activities during a union campaign;
- Providing persuader materials—either by drafting or revising such information meant to be distributed to employees (but only if it is intended to persuade against the union and not if it is to ensure legality);
- Conducting seminars to assist employers in dealing with a union campaign; and
- Developing or implementing personnel policies meant to persuade during a union campaign.
To comply with this new reporting requirement, the club and its attorney will need to disclose their identity, fee arrangement as well as all of the services contracted for in their agreement. Those disclosure forms are provided by DOL.
NCA’s concern is that the Persuader Rule will discourage many lawyers from assisting clubs when a union organizing campaign begins—leaving those clubs unable to effectively communicate their side of the story during the campaign. The rule will also threaten the attorney/client relationship for clubs by forcing attorneys to disclose confidential information and by forcing clubs to disclose things they will not want out in the open during a union campaign.
Furthermore, the rule will allow union organizers to stress that by hiring an attorney, the club has the money to increase wages or benefits. Such a message could be a valuable tool for unions during a campaign.
Most importantly, the rule kills the “advice exemption” in the LMRDA. Since this is a congressionally created exemption, we do not believe DOL has the authority to rewrite federal law.
NCA and our allies in the Coalition for a Democratic Workplace are working with friends on Capitol Hill to stop it as well as prohibit federal funds from being used to enforce it in FY17. We are also preparing to file suit in federal court to stop the rule.
As always, when we receive additional information, we will pass that on to you. Until then, if your club becomes the target of a union organizing campaign you will need to factor in the effect of the Persuader Rule as you plan your defense against the union.