For many years, employers have been able to lawfully avoid certain reporting requirements under the Labor Management and Reporting Disclosure Act which compels the disclosure of agreements with outside consultants/“persuaders” – i.e. individuals retained for the express purpose of attempting to convince employees not to organize a union. This “advice exemption,” eliminates the employer’s reporting requirements if the outside consultant/persuader does not make direct contact with employees and merely advises and assists the employer in combating union organizing activities.
In an effort to eliminate this exemption, the Department of Labor just published its final rule requiring employers to report their agreements with outside consultants, attorneys and persuaders even if the individual(s) retained does not have direct contact with employees. To summarize, the final rule requires employers to report their arrangements with any outside consultant, attorney (including outside labor counsel) or persuader that acts to influence employees’ decisions to organize and collectively bargain by: 1) planning, directing or coordinating activities undertaken by supervisors or managers or other employer representatives; 2) preparing materials for distribution to the employees; 3) conducting a seminar for supervisors or representatives; or 4) developing or implementing personnel policies or actions for use by the employer.
The final rule was initially proposed in 2011, and was met with staunch opposition from the American Bar Association (ABA) and the business community. One of the major concerns raised by the ABA was that the narrowing of the “advice exemption” undermines the strict confidentiality of attorney-client relationships. Likewise, trade associations have expressed concern that the final rule unnecessarily restricts employers’ ability to educate and inform their employees.
The final rule goes into effect on April 25, 2016, and applies to all arrangements and agreements made on or after July 1, 2016. However, employers and trade associations are expected to file lawsuits seeking to block the implementation of the final rule, and therefore, the content of the final rule and effective date may be subject to further modification.
As always, HR Legalist urges our readers to consult legal counsel if you have any questions about the final rule.