In June 2011, the U.S. Department of Labor (DOL) proposed new regulations that would significantly narrow the DOL’s interpretation of the Labor-Management Reporting and Disclosure Act (LMRDA) that has been in force since 1962. Dubbed the “persuader rules,” the regulations address Section 203 of the LMRDA, which, among other things, requires employers to file reports with the DOL when they hire consultants or contractors (including attorneys) to persuade employees on the issue of unions. With little fanfare just before the July 4th holiday weekend, the Obama administration released its Unified Agenda of upcoming regulatory and deregulatory actions. Buried among thousands of proposed regulations is a new November 2013 target date for the release of the persuader rules.
The DOL still has not indicated that it has sent a final draft of the rules to the Office of Information and Regulatory Affairs for final review, approval, and publication. The period for the Office to review a draft regulation is limited by an Executive Order to 90 days, with the possibility of a single, 30-day extension. While there is no minimum period for review, the average review time in past years has been approximately two months. Therefore, the DOL would likely need to submit the rules for publication sometime in the next 60 days if it plans to have a final rule in place by November as planned.
The proposed changes, which we covered in greater detail back in January, would drastically increase the reporting requirements for employers and attorneys/consultants/contractors and significantly amend the reporting forms and instructions under LMRDA Section 203. The DOL estimated that its new rules would triple the number of reports that employers must file and increase the reports filed by firms engaged in persuader activities twelve-fold.
The newly defined standards, particularly when combined with the LMRDA’s potential criminal sanctions for willful non-reporting, could substantially interfere with an employer’s attorney-client relationship, disrupt an employer’s ability to obtain legal advice when confronted by union activity, and have a chilling effect on employer free speech during such campaigns. We will continue to monitor the DOL’s action on the persuader rules, and will keep you updated as to further developments or submissions by the agency.