The 1959 Labor Management Reporting and Disclosure Act (LMRDA) focused primarily on union corruption. The most prevalent part of the LMRDA is an LM-2 form that details union expenses. A lesser- known part of the LMRDA deals with payments to consultants called “persuaders.” Companies must report payments for services like communicating with workers about their rights under the National Labor Relations Act. As a practical matter, persuaders interact with employees who may be members of a bargaining unit, while labor lawyers restrict our interactions to management. Lawyers lose the attorney-client privilege when dealing directly with bargaining unit (or potential bargaining unit) employees.
Unfortunately, a rule likely to go into effect in a few months changes this dynamic. The Department of Labor wants companies, consultants, and attorneys to report any time they draft, revise, or provide: 1) materials for presentations to employees; 2) speeches; 3) planning employees meetings; 4) employee attitude surveys; 5) training supervisors; 6) directing activities of supervisors; 7) developing personnel policies; 8) conducting a seminar for supervisors, and more.
This is a massive change and captures a lot of work routinely done by attorneys under the cloak of attorney-client privilege. This rule seeks to remove that privilege. It will certainly be challenged, but a broader interpretation has been in place before and survived legal challenge. Companies should contact their labor attorney now and prepare to avoid exposing corporate secrets after this rule takes effect.