As we have previously reported, the U.S. Department of Labor has long wanted to revise the "persuader" reporting rules under the Labor Management Reporting and Disclosure Act. The DOL announced in a regulatory agenda issued toward the end of 2015 that it expects to issue the persuader rule in March (that's two months from now). Current regulations require employers and their labor consultants who engage in "persuader activity" to file extensive reports about their use of consultants and lawyers. However, the current regulations contain an "advice exemption" for attorneys and consultants who assist employers in labor relations activities so long as the activities are "advisory" to the employer (that is, the attorneys and consultants communicate to the employer and do not directly communicate with employees).
The proposed regulations are expected to narrow that exemption, essentially to limit exempt "advice" to providing representation in legal and administrative labor-related proceedings. Such a narrowing will largely swallow the advice exemption and mean that many more entities – employers, attorneys, and consultants – will have an obligation to report extensive and detailed financial information on labor relations activity, expansively defined, on mandatory DOL forms. The reporting obligations are huge, costly to those subject, and come with potential criminal sanctions for failure to comply.
Since at least 2011, the DOL has held back on issuing its new final persuader regulations, presumably because of the political and legal firestorm that is expected. Opponents of the new regulations point out that the new interpretation of the advice exemption will encroach on the attorney-client privilege and deter smaller employers from seeking legal advice in labor matters, which is expected to hinder employer effectiveness in union campaigns while also increasing the risk that employers will commit unfair labor practices because they don't have the benefit of legal advice. The regulations have now been submitted to the Office of Management and Budget, a near-final step in the process. Court challenges are likely, but employers, their counsel, and their consultants should begin to prepare if they have not done so already.