Late last month, the Department of Labor published its "persuader" regulation final rule, which significantly strengthens a union's rights under the Labor Management Reporting and Disclosure Act ("LMDRA").
Generally, the LMDRA regulates the public reporting obligations of businesses seeking legal and non-legal counsel to oppose or manage relations with unions. A consultant, known as a "persuader," helps an employer navigate organizing drives and labor disputes. Before this final rule, The LMDRA required "direct" persuader activities to be reported, such as meetings between the persuader and employees, but exempted "indirect" activities, such as the preparation of materials for the employer to provide to its employees.
The final rule requires that these "indirect" activities also be reported, including:
1. A persuader's planning, directing, or coordinating supervisors, managers, or other employer representatives, including meetings and interactions with employees.
The final rule specifically states that this includes both formal meetings and less structured interactions with employees, and encourages employers and pursuaders to evaluate a lengthy list of factors to determine whether to report an interaction.
2. A persuader's act of providing materials to the employer, in oral, written, or electronic form, for dissemination or distribution to employees.
When a persuader drafts a communication "tailored to the employer's employees and intended for distribution to them," their activity must be reported. However, if the persuader is simply "revising" materials that the employer created or providing "off the shelf materials," those activities do not have to be reported.
3. When a persuader conducts a seminar for supervisors or other employer representatives.
Seminar agreements must be reported when the persuader "develops or assists the attending employers in developing anti-union tactics and strategies for use by the employers' supervisors or other representatives."
4. When a persuader develops or implements personnel policies or actions for the employer which are intended to persuade employees.
Personnel policies which are intended to persuade employees, such as a policy which is created in response to employees' statements about the need for a union to protect against terminations through which employees can arbitrate grievances, must be reported. Additionally, if certain employees are targeted for personnel action with the intent to persuade those employees about how they should exercise their rights against or in support of union representation, that activity must be reported.
So what does this mean for employers?
As if the additional reporting obligations are not controversial enough, the final rule doesn't just toe the line of attorney-client privilege, but pitches a tent half a mile across the line. The final rule interferes with attorney-client privilege by removing the "advice" exemption, effectively prohibiting attorneys from relying on attorney-client privilege to avoid reporting obligations.
Fortunately, the final rule may be more temporary than the Department of Labor planned. At leat four lawsuits involving the final rule have been filed so far, and the American Bar Association vehemently reiterated its stance against the final rule. For now, the rule only impacts "arrangements, agreements, or payments" made after July 1, 2016. Additionally, because no new employer reports are due until 90 days after the end of any fiscal year, there may be additional clarity regarding the validity of the rule by the time reports must be filed. Stay tuned to the Employment Law Observer for further developments.
A copy of the final rule is available here for those bibliophiles wishing to parse through 446 pages of text.
