The greatly expanded Persuader Rule will require employers to report any agreement or arrangement with a lawyer or third-party consultant to “persuade” employees — directly or indirectly — about their union organization and collective bargaining rights.

The Department of Labor’s (DOL’s) “Persuader Rule” was recently revised to greatly expand the scope of reporting requirements for individuals and organizations (including lawyers and law firms) working with employers to “persuade” employees regarding their right to organize and collectively bargain under the National Labor Relations Act. While consultants and employers have always been required to report “direct” persuasion activities to the DOL, the revised Persuader Rule covers even “indirect” persuader activity, including consultation with legal counsel, in the category of activities that must be reported to the DOL. The revised rule is scheduled to take effect on July 1, 2016, and the DOL has confirmed informally that it will not be applied to agreements entered into on or before June 30, 2016. This leaves employers with a narrow window of opportunity to enter into such agreements before July 1 in order to avoid application of the new rule.

Overview

The Labor-Management Reporting and Disclosure Act was enacted in 1959 to require unions, consultants and employers to file reports and disclose payments regarding labor-management activities. The justification for the original rule was to prevent abuse and corruption. The supposed justification for the revised Persuader Rule is that employees need to “understand the source of the views, materials, and policies that are being used to influence their decisions.”

The greatly expanded Persuader Rule will require employers to report any agreement or arrangement with a lawyer or third-party consultant to “persuade” employees — directly or indirectly — about their union organization and collective bargaining rights. Attorneys/consultants also will be required to file a similar report with the DOL. These reports will be required not only when lawyers or consultants directly persuade workers, but also when they engage in any of the following activities:

  • plan, direct or coordinate managers to persuade workers
  • provide persuader materials to employers to disseminate to workers
  • conduct union avoidance seminars
  • develop or implement personnel policies or actions to persuade workers.

The revised Persuader Rule has caused significant concern because the four activities above are ones that lawyers regularly undertake when advising clients.

Implications

A number of organizations have filed suit against the DOL in an attempt to prevent implementation of the revised rule, and the American Bar Association recently asked Congress to reconsider the “deeply flawed” revisions to the Persuader Rule due to their negative impact on the attorney-client privilege. However, as July 1 quickly approaches, we recommend that employers contact their legal counsel and other consultants who provide labor relations advice to discuss the possibility of entering into written and revised indefinite arrangements and engagement letters to cover a wide variety of indirect persuader activities, such as the preparation of scripts for managers and union avoidance training. Otherwise, both employers and their consultants/attorneys may need to file reports with the DOL regarding fees paid and the scope and nature of any “indirect” persuader activities as discussed above.