Labor Relations Insight

by Phil Wilson

It’s back. After a several year hiatus, the Department of Labor (DOL) resurrected the so-called “persuader” rulemaking. This month they asked the Office of Management and Budget to approve the proposed rule that sat dormant for years. It looks like the rule will go into effect this spring. Most people haven’t thought about this rule for several years, so here’s a quick reset: The Labor Management Reporting and Disclosure Act (LMRDA) passed in 1959. That law focused primarily on union corruption. It outlawed and required reporting of certain transactions between unions and companies. The purpose of these restrictions is to disclose, and hopefully eliminate, potentially corrupt transactions between employers and unions. A less known part of the LMRDA deals with payments to so-called “persuader” consultants. The LMRDA also requires companies (and consultants) to report payments for services like communicating with workers about exercising their rights under the National Labor Relations Act. While these communications are generally lawful protected speech, there was concern by some members of Congress that the practices of some persuader consultants were improper. They felt that if these activities were exposed to the public that it would discourage improper practices. The persuader requirements apply to both attorneys and non-lawyer consultants and the companies who hire them. However, the LMRDA exempts “advice” activities from reporting. Historically the DOL has said that most consulting outside of direct communication with employees was “advice” and therefore not reportable. This is what the new rule changes. Under its proposed rule DOL is reclassifying basically all labor and employee relations activities into “non-advice, persuader” activity reportable under the Act. DOL wants companies, consultants and attorneys to report any time they draft, revise or provide:

1. Materials for presentation, dissemination, distribution to employees
2. Speeches
3. Audiovisual, multimedia presentation
4. Website content
5. Planning, conducting one-on-one or group meetings
6. Employee attitude surveys concerning union awareness, sympathy or “proneness”
7. Training supervisors to conduct meetings
8. Coordination or directing activities of supervisors
9. Establishing or facilitating employee committees
10. Developing personnel policies
11. Deciding which employees to target for persuader activity or disciplinary action
12. Conducting a seminar for supervisors

This is a massive change. Obviously this list captures huge numbers of activities regularly performed by consultants and attorneys. Review of handbooks and policies, conducting training seminars, performing employee surveys, and drafting communications (to name just a few) happen daily in hundreds of thousands of companies around the country. To make things worse, this isn’t just a suggestion. Failure to comply with this rule carries criminal penalties. It’s a big deal. The rule will certainly be challenged, but most people don’t realize that a similarly broad interpretation has been in place before and survived legal challenge. This is a new, more expansive interpretation and it may get blocked but at this point employers should be planning for the worst. What should you do? First, make sure you and your leaders get re-educated on the rule. If you haven’t signed up for our webinar on the rule that’s a great place to start. We will keep you posted on any updates or changes to the rule. Second, you should start to inventory your relationships and activities that potentially fall under the rule. This is the only way to determine and help your leaders understand your potential exposure. Third, make sure any industry groups you belong to are aware of the rule and encouraged to inform members and lobby against it. This is an “under the radar” rule that won’t get a lot of attention unless the business community makes it a priority. This rule change is bigger than anything the NLRB has proposed (including joint employer and the ambush rule). Finally, you need to think carefully about how concerned your company is about reporting and determine a strategy based on that risk profile. Some companies won’t care about reporting (many report each year under the current interpretation). Others will want to avoid or strictly limit the amount of activity they have to report. Once you know your profile, a set of actions will flow from that. You may need to do nothing – or you may need to overhaul how you do your employee relations activities. It is a case-by-case decision. We file more of these reports each year than any company by far. We will obviously be watching the rulemaking carefully and if you have any questions about how this rule affects your company (or law firm) don’t hesitate to reach out. We’ll be happy to help. If this is any indication 2016 is going to be a barnburner of a year from a labor policy standpoint (oh, and I hear there is a big election coming up too). So try to get some rest over the holidays – you may need it. Happy holidays and have a safe and happy New Year.