Yesterday, the Department of Labor issued its long-awaited and controversial “persuader” rule requiring companies to disclose when they seek advice about countering union campaigns. The rule requires the employer and the attorney to report any actions, conduct, or communications taken-whether directly or indirectly- to affect employees’ decisions regarding union representation and collective bargaining. The rule affects agreements for representation entered into after July 1, 2016, between employers and attorneys.
The new rule is not only broad and expansive in its reach, it also represents a major shift. Under the current rule’s “advice exemption”, employers who engage counsel for advice on union matters do not have a reporting obligation as long as counsel does not interact directly with employees and the employer is free to accept or reject any communications prepared by counsel. The new rule however, will require employers to report not only that they have sought legal advice regarding union organizing and collective bargaining issues, but also a host of other various employment issues.
In practical terms, the rule will require attorneys and their clients to report to the Department of Labor, as a matter of public record, the time spent on a variety of labor and employment issues and the cost to the employer of the attorney’s services. The changes set forth in the rule are substantial and there will likely be more in the future.
While the rule has been widely criticized as promoting a violation of the attorney/client privilege, the Department of Labor is not expected to delay enforcement of the rule unless forced to do so by a court. As such, we anticipate several business organizations will file lawsuits seeking court orders blocking implementation of the rule.
If litigation is initiated, we will continue to closely monitor developments to determine whether attorneys and clients are required to abide by the new reporting requirements while the litigation is pending. We are in the process of reviewing the 446-page rule in its entirety to determine its full impact our clients. In the event litigation fails, we will ensure our clients will be in compliance with the new rule’s requirements..
If you have any questions about the persuader rules or any other labor matter, please do not hesitate to contact Lowenbaum Law’s Labor Team