Persuader Rule Finalized

The U.S. Department of Labor (DOL) has finalized its proposed rule requiring disclosure of labor relations consulting activity under the Labor Management Reporting and Disclosure Act (LMRDA). The DOL originally proposed this rule in 2011. The rule will require both employers and labor consultants to file reports with the federal government when said labor consultants provide advice intended to persuade employees regarding their choice to form or join a union.

For over 30 years, the DOL has interpreted the LMRDA as requiring disclosure only when a labor consultant has direct contact with employees. As such, if a labor consultant were to give an employer a sample speech or other material that the employer could use at its discretion, no disclosure was required. Under the revised interpretation, any work done by a labor consultant designed to influence employees must be disclosed, regardless of whether the consultant actually contacts or speaks with employees directly. Simple advice from a labor consultant on relevant legal standards will not need to be disclosed, but advice on how the law applies to a given situation or help with strategy will.

Secretary of Labor Thomas Perez said the rule is necessary to help workers “make informed decisions about exercising critical workplace rights such as whether to form or join a union.”

While the required reports do not have to state the context of any advice, they must disclose when and how much consultants are paid for it. Many, including the American Bar Association (ABA), believe this requirement violates well established confidentiality laws including the attorney-client privilege. The ABA has intimated it will challenge the rule on those grounds. MSEC will provide its members with further updates as events on this rule unfold.