Regulatory Two-Step - DOL and NLRB Announce Proposed Rules Limiting Employer Communications with Employees Regarding Union Representation

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This week federal labor agencies have launched two proposed rulemakings of significance.  Both may have a substantial impact on the substance and process of employer communications with employees on the issue of union representation. 

First, the U.S. Department of Labor, Office of Labor-Management Services, announced a notice of proposed rule making revising the so-called “persuader” regulations.  Those regulations require employers and their consultants (including law firms) to file publicly available reports with the Department of Labor regarding “persuader” activities, i.e., activities undertaken for the purpose of “persuading” employees choosing whether or not to be represented by a labor union.  

The persuader regulations are based on the following requirement in the Labor-Management Reporting and Disclosure Act: 

"Every person who pursuant to any agreement or arrangement with an employer undertakes activities where an object thereof is, directly or indirectly--(1) to persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing…shall file within thirty days after entering into such agreement or arrangement a report with the Secretary…containing…a detailed statement of the terms and conditions of such agreement or arrangement."

29 U.S.C. 433(b).   Section 203(b) also requires persons subject to this requirement to report receipts and disbursements of any kind “on account of labor relations advice and services.” 

Employers and the law firms who advise them in such matters have particular reason for concern. Currently, lawyer counseling of employers, including legal compliance advice, review or creation speeches and written materials and training of an employer's managers and supervisors, is generally granted an exception from reporting under the so-called “advice” exception persuader reporting.  See LMRDA Section 433(c). 

Under the proposed rule, the exception will be narrowed to exclude such things as the producing or revising written material or speeches to be given to employees, creating and implementing employee surveys, and providing training or training materials for supervisors.  That means that those services may now trigger a reporting requirement for both employers and attorneys, identifying the lawyer as a “persuader” and requiring disclosure of sensitive – and perhaps privileged – financial and other information about not only the employer and the lawyer, but about all of the law firm’s other clients to whom labor advice is rendered.   

The comment period for the persuader regulation runs through August 20, 2011.

The second major proposed rulemaking was announced by the National Labor Relations Board.  The Board proposes to revise its representation case procedures – the procedures governing the conduct of elections to determine whether a unit of employees wishes to be represented by a union. 

According to a statement by Board Chairman Wilma Liebman, the purpose of the proposed rules is to make the election process “simpler” and “clearer”, and result in a process that makes sure employees choose whether or not they want to be represented by a union “in a quick, fair and accurate” way.  She also noted that the proposed rules do not involve card check, how campaigns are run, where or how elections are conducted or what bargaining units are appropriate.

The changes proposed by the Board would dramatically shorten the time between the filing of a petition and the holding of an election from the current median of  56 days, to – according to the dissent filed by Member Brian Hayes – as little as 10 to 21 days.  This would be accomplished by, among other things, setting the hearing seven days after the notice of hearing is served; requiring parties to file a written “statement of position” form by the opening of the hearing, in an attempt to narrow the issues; barring challenges to eligible voters involving less than 20% of the proposed unit and requiring instead that such voters be challenged at the polls; requiring the employer to provide the union with a final list of eligible voters – including telephone numbers and email addresses – within two days of the direction of an election; and eliminating Board review of Regional Director decisions until after the election.  

In his dissent, Member Hayes criticized the Board for undertaking the rule making without first consulting with Board constituencies to identify what if any problems exist in the current system, and for scheduling only two days of hearings and a total of 74 days for comments.  He also stated that “the principal purpose for this radical manipulation of our election process is to minimize, or rather, effectively eviscerate an employer’s legitimate opportunity to express its views about collective bargaining.”

The comment period for the NLRB’s regulations runs through August 21, with response comments due by September 4, 2011.  A hearing has been scheduled for July 18, and possibly July 19, in Washington, D.C.  

There is no doubt that both of these regulatory proposals, while welcomed by unions, will be  seen by employers as a double barreled attempt to diminish their free speech rights and unduly limit their communications with employees regarding union representation issues.