Department of Labor’s New “Persuader” Rule Requires Employers and Labor Relations Consultants to Publicly Disclose Arrangements

On March 24, the United States Department of Labor (“DOL”) published a final rule imposing new reporting requirements under the Labor-Management Reporting and Disclosure Act (“LMRDA”) that could impede employers’ communications with their workers about unions. The rule will take effect on April 25, and will cover arrangements, agreements, and payments between employers and their labor relations consultants – including their attorneys – beginning July 1, 2016.

The law already requires employers and labor relations consultants to file reports with the government detailing expenditures, activities, agreements, and arrangements undertaken to persuade employees regarding their rights to join or refrain from joining unions, but the reporting requirement is waived if the consultants do nothing more than “giv[e] or agree[] to give advice to [the] employer.” Accordingly, businesses and their consultants are not required to publicly disclose their arrangements unless a consultant makes direct contact with company employees under the existing rule.

The new rule reinterprets the meaning of “advice” so that employers and consultants will have to make reports whenever “[a] consultant undertakes, or agrees to undertake, ‘persuader activities’”– even if the consultant “has no face-to-face contact with employees” and has limited his or her engagement to “indirect persuasion.” Examples of “indirect persuasion” include:

• planning, directing, or coordinating activities undertaken by supervisors or other representatives of the employer;
• providing material or communications to the employer in oral, electronic, or written form, for distribution to employees;
• conducting a seminar for supervisors or other employer representatives; and
• developing or implementing personnel policies or actions.

Many activities that would previously have been exempt from reporting will now fall outside the law’s definition of “advice,” such as planning or coordinating meetings between supervisors and employees, revising employer-created materials that will be distributed to workers, and even assisting an employer in the selection of “off-the-shelf” campaign videos for rental or purchase. (Links to both the old and new versions of Forms LM-10 and LM-20 may be found here.)

Along with the NLRB’s approval of micro units in Specialty Healthcare & Rehab. Ctr. of Mobile, 357 NLRB No. 83 (2011), the NLRB’s expansion of the definition of a joint employer in Browning-Ferris Indus. of Cal., 362 NLRB No. 106 (2015), and the NLRB’s new “quickie” election rules, the amendments to the persuader rule make businesses particularly vulnerable to union organizing drives absent a proactive labor relations strategy. While we fully expect the rule to face legal challenges related to its effect on employers’ freedom of speech and the attorney-client privilege, companies should prepare for the rule’s impact now, as the outcome of any future challenge is unknown. We, of course, will keep you posted on any developments.

For answers to any questions regarding this blog or the DOL’s new “persuader” rule generally, please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.