Imagine being expected to play a game while being discouraged from knowing the rules. Some games — tic-tac-toe or “rock, paper, scissors” for example — are fairly easy to learn. Others, like checkers, might take a little more time, but without any significant training can soon be played adequately.
Still others, however, like baseball (think “infield fly rule”), football (“intentional grounding”) or golf (“Rule 26-1: Relief for Ball in Water Hazard”), have detailed and arcane rule books. For example, while a quarterback may intentionally throw an uncatchable pass at the center’s feet to stop the clock, watch any NFL game to see the referee attempt to explain why a quarterback’s pass was or was not intentional grounding in relation to the tackle box and line of scrimmage. Watch any PGA Tour event to see the world’s best (and most knowledgeable) golfers seek a tournament rules official’s advice on whether and where they are entitled to take “relief.”
A little closer to home, just imagine attempting to file your income tax return in a little more than two weeks without anything but a Form 1040.
Like other complex “games,” labor law may never have been as confusing or uncertain as it is today. Over the past four years, the National Labor Relations Board (“NLRB” or “Board”) has issued numerous problematic decisions for employers that will only become even more confusing once their potential effects have been fully examined and expanded upon in future cases. Just recently, the Board found that employers:
- Illegally terminated an employee because the employee may have been thinking about engaging in activities protected by the National Labor Relations Act (“Act”) but had not yet done so;
- Illegally disciplined employees who refused to report to their job stations and engaged in a disruptive demonstration in front of customers on company time;
- Illegally requested employees to keep interviews confidential to maintain the integrity of an investigation into claims of coworker sexual harassment; and
- Illegally promulgated and enforced policies regarding the disclosure of confidential information, disparagement of the company and similar common sense issues.
As a result of these and many other recent NLRB decisions, employers find it increasingly difficult to establish employment policies or take appropriate action for their violation with any degree of legal certainty. Employers’ confusion has been further amplified by the Noel Canning decision, which may or may not invalidate the NLRB’s decisions of the last few years — and possibly many of its decisions since 1980. In light of all this uncertainty created by the NLRB, employers need legal counsel more than ever to avoid unwitting conduct that will have highly undesirable legal and financial consequences.
Soon, however, the Department of Labor (“DOL”) is expected to issue regulations making it less likely that employers will obtain that legal advice. According to its published agenda, next month the DOL is scheduled to issue its final regulations for reporting so called “persuader” activities that are governed by the Labor Management and Reporting Disclosure Act (“LMRDA”).
For the past half-century, the DOL’s interpretation of reportable “persuader” activities has been limited to direct persuasion of employees during union organizing campaigns or collective bargaining. Based on this long-standing interpretation–consistent through both Democratic and Republican administrations–the typical legal advice provided by attorneys in an NLRB case, in assisting with employee handbooks or policies, and in advising about the legality of employee discipline has not been considered reportable. Therefore, there has been no requirement that employers or their attorneys report the fact, or amount, of fees incurred during these legal representations.
In a radical departure from precedent, however, the DOL has now proposed a new interpretation of the LMRDA. This new interpretation defines “persuader” activity so broadly that it encompasses a wide range of labor and employment legal advice, and as a result, would require detailed, publicly-available reporting by both employers and their lawyers of all payments for legal advice and services.
For a variety of reasons, publicly reporting all legal fees will significantly discourage employers from seeking, and law firms from providing, legal counsel on labor and employment law matters. And to further complicate matters, the DOL may even apply some or all of its new reporting requirements retroactively. Although only the DOL knows whether its final regulations will be as far reaching as its initial proposal, at a minimum they will add further legal uncertainty for employers as they grapple with difficult labor and employment issues.
If complying with an ever-changing labor law landscape were not already difficult enough, the DOL’s “persuader” rules may have the perverse effect of discouraging employers from obtaining legal advice when attempting to do so. So even as the complex rules keep changing, employers may find themselves playing the game without knowing those rules.