Employers Facing Unionization Efforts Subject To Additional Disclosure Requirements
**UPDATE JULY 18, 2016**
Implementation of the Final “Persuader” Rule has been temporarily delayed until further notice. As predicted, there have been several lawsuits filed in federal courts challenging the legality of the new “Persuader” Rule. On June 27, 2016, a Texas federal judge entered a nationwide injunction putting a temporary block on the enforcement of the “Persuader” Rule. This nationwide injunction prohibits the DOL from implementing the new rule until the case is settled by the court. Employers should continue to closely monitor the “Persuader” Rule and be prepared to take proactive steps if the rule is implemented.
Original Post March 30, 2016
The Department of Labor (DOL) published its Final “Persuader” Rule on March 24, 2016 significantly expanding employers’ obligations to report the hiring of a consultant or attorney to influence its employees’ unionization attempts pursuant to the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). The Final Rule will take effect April 25, 2016 and will apply to covered agreements with so-called “persuaders” that are entered into on or after July 1, 2016.
The LMRDA requires employers who hire labor relations consultants to persuade employees on unionization, organizing, or bargaining to publicly report these agreements to the DOL. Prior to the Final “Persuader” Rule, employers were required to disclose the hiring of an outside party only if those consultants made direct contact with the employees.
The Final “Persuader” Rule still requires employers to report direct persuader activities, but now also requires employers to report any indirect persuader activities. For example, according to the DOL, the Final Rule will require employers to disclose when consultants:
- Plan, direct, or coordinate managers to persuade workers;
- Provide persuader materials to employers to disseminate to workers;
- Conduct union avoidance seminars; and
- Develop or implement personnel policies or actions to persuade workers.
The DOL has provided several specific examples that may qualify as reportable indirect persuader activities, including when consultants: plan or conduct employee meetings, train supervisors or employee representatives to conduct meetings, coordinate or direct the activities of supervisors or employer representatives; establish or facilitate employee committees; draft, revise or provide speeches; develop employer personnel policies designed to persuade employees; and identify employees for disciplinary action, reward, or other targeting.
The Final “Persuader” Rule does not change employers’ ability to use labor relations consultants or constrain what information a consultant can provide. The Final Rule still exempts agreements by which consultants merely provide “advice” to the employer. The Final Rule also exempts any agreement under which a consultant only provides legal services.
Employers need to be aware of the expanded scope of publicly reportable persuader activity when hiring and utilizing labor relations consultants. Employers should reevaluate their agreements and arrangements with consultants and attorneys related to unionization, organization, and collective bargaining in light of this Final Rule. Employers should also ensure that they file adequate reports disclosing persuader activity within 90 days of the end of the employer’s fiscal year to avoid penalties. Although it is likely that there will be legal challenges to the Final “Persuader” Rule which could delay its implementation, employers should be prepared for the Final Rule to take effect April 25, 2016.
For additional information or questions regarding this topic, please contact the author or your DeWitt employee relations attorney.
About the Author
Laura Davis is an attorney in Dewitt’s Litigation, Labor & Employment Relations, Intellectual Property and Background Screening practice groups. Laura is committed to producing timely, high quality legal work in an efficient and effective manner. She values building relationships with clients to guide them through their complex legal needs.
Contact Laura by email or by phone at (608) 252-9337.
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