Restoring the Power of Persuasion – The DOL Takes Another Step Toward Ending the Persuader Rule
The Department of Labor (“DOL” or “Department”) has continued its efforts towards eliminating the “Persuader Rule,” a controversial Obama-era regulation which requires employers to report arrangements made with third parties for the purpose of influencing employees in matters of collective bargaining, union organizing, and other union-related activity. The Persuader Rule broadened the Labor-Management Reporting and Disclosure Act’s (LMRDA) “advice exemption” requiring employers to disclose “persuader activities” undertaken by third party consultants.
On May 22, 2017, the DOL forwarded a draft of the Department’s Rescission of Rule Interpreting ‘Advice’ Exemption in Section 203 (c) of the Labor-Management Reporting and Disclosure Act to the Office of Management and Budget for consideration. Prior to the Persuader Rule, the LMRDA limited its definition of “persuader activity” to only those instances where third party consultants directly contacted employees in reference to their collective bargaining rights. The Persuader Rule, however, broadened the definition of “persuader activity” to include “indirect persuasion activities” which have the “direct or indirect object” of influencing employees in exercising their union organizing rights. As a result, the Persuader Rule requires that employers disclose any third party involvement in providing advice that might have some persuasive impact on employee organizing efforts irrespective of any actual direct contact between the advisor and the employees.
Due to the nationwide injunction issued in June 2016, the Persuader Rule was never enforced. As such, it is difficult to pinpoint precisely what range of activities would constitute “indirect persuasion activities.” Still, it is clear that the Persuader Rule would have greatly increased the instances in which employers were required to disclose the use of legal counsel or other outside labor consultants. Paradoxically, however, the Rule has been criticized as indirectly promoting unfair labor practices by imposing reporting requirements which discourage employers from consulting with labor counsel.
With the appointment of Alexander Acosta as the Trump Administration’s new Labor Secretary, the rescission of the Persuader Rule appears imminent. Ultimately, the elimination of the Persuader Rule represents an employer-friendly shift in the labor relations landscape. In the rule’s absence, employers will be able to effectively navigate the complex challenges presented in collective bargaining issues by comfortably seeking guidance from experienced legal counsel and other labor consultants without the need to disclose such efforts.