With its new “persuader rules” scheduled to become effective July 1, 2016, the Department of Labor (DOL) is feeling the heat of withering criticism. In response to lawsuits challenging aspects of the new rule filed by a number of state attorney generals, employers, management-side labor law firms, employer associations (such as the U.S. Chamber of Commerce), and the American Bar Association), the DOL has been forced to define a significant “loophole” in enforcement of the new persuader rules. This significant loophole commands the immediate attention of all existing clients.
In brief, the new persuader rules will require employers and law firms to publicly disclose through filings with the DOL any arrangements to even indirectly persuade employees concerning the right to organize and bargain collectively. Effectively, the rules require employers to report all monies expended for the purpose of resisting union organizing not only for actual direction of union avoidance campaigns, but also peripheral activities such as conducting union avoidance training for managers and supervisors. The rules also extend a concomitant reporting obligation to the attorneys who perform this work for the employer.
The broad definition of persuader activities fashioned by the DOL will create a monumental headache for employers and will provide the unions with fodder for their organizing campaigns. The rules have the potential to fundamentally alter the relationship between attorneys and their clients in the realm of union avoidance and seriously circumscribe the role attorneys can fill in orchestrating successful resistance to union organizing.
It is important for all employers to take immediate action to forestall the adverse consequences of the new rules. The DOL has now publicly affirmed the rules will only apply to attorney/client engagements entered into on or after July 1, 2016, even if the work contemplated by the engagement will be performed in the future (if at all). This means an employer that engages their lawyers prospectively to represent them in union avoidance matters may escape the obligation to publicly report persuader activities, even if these activities are undertaken after July 1.
We will be distributing supplemental engagement letters for clients impacted by these rules. We strongly urge all clients to act immediately upon receipt of the supplemental engagement letters to execute and return the letter to us. If your company is not presently a client, and are interested in engaging our firm to provide legal advice on labor relations and union avoidance matters, please contact R. Michael Lowenbaum, Corey L. Franklin, Robert S. Seigel, David P. Frenzia, D. Michael Linihan, or any other labor law attorney to discuss this matter more comprehensively. As always, we are happy to discuss any questions or concerns you may have concerning the purpose or content of the letters.