On March 23, the Department of Labor released the final version of its controversial and expansive rule that changes the disclosure requirements for labor relations consultants who aid employers with their union avoidance measures.
What Does That Mean to Employers?
Previously, a consulting firm was required to disclose activity to the DOL only when it engaged in direct contact with workers regarding labor organizing campaigns. Now, under the Department’s new “persuader” rule, the hiring of an attorney or consultant to thwart organizing attempts must be reported whenever the third-party consultant engages in persuader activities that go beyond the plain meaning of advice, regardless of whether there is direct contact with employees. This rule encompasses typical work conducted by outside consultants. It includes, for example, planning employee meetings, training supervisors or employer representatives to conduct meetings, drafting or providing speeches, and other common persuader activities.
Legal Challenges Underway
At least two lawsuits have already been filed against the DOL in federal court challenging the new rule. The National Association of Manufacturers (NAM), along with several business groups, filed suit in the Eastern District of Arkansas. Similarly, a coalition of law firms has filed suit in the District of Minnesota. The challengers have asserted a number of arguments, including claims that the rule: violates the First Amendment; is overbroad; exceeds the DOL’s authority; and, importantly, infringes attorney-client confidentiality protections.
Only time will tell whether any of these legal attacks will prove successful in dismantling the new “persuader” rule. For now, the rule remains in place, and employers must follow it. However, employers should remember that agreements where a consultant merely agrees to provide “advice” are still exempt from the reporting requirement. For example, mere recommendations regarding a company’s decision or course of conduct need not be reported.
Check back in for updates as this litigation develops, and do not hesitate to contact our firm with any specific questions on how this new rule may affect your company’s practices.