Proposed Labor Dept. Agenda Could Bury Employers With New Regulations

By Fredrick Englehart

If even half of the proposed actions get approved from the U.S. Department of Labor’s spring 2013 regulatory agenda, unions will likely be celebrating.

That’s because the agenda created by new Secretary of Labor Thomas Perez (right) reads like a wish list for organized labor. Of course, there is no way of telling if and when any of these regulations will be approved, but the stepped up actions do send a cautionary message to employers.

One of the more controversial changes expected to be resolved yet in 2013 is the issuance of the final rule to narrow the advice exemption to the Labor-Management Reporting and Disclosure Act (LMRDA).

“Persuader Rule” would significantly increase reporting

The LMRDA currently requires employers, attorneys and consultants to file detailed reports to the Labor Department when employers engage consultants and attorneys who talk directly with employees about unionization. Under the newly proposed regulation (commonly called the persuader rule), the frequency of reporting will increase significantly, as disclosures would have to be made even when attorneys have no contact with employees but speak only with management.

If you think this change does not apply to you, think again. Despite the fact that unions only represent 6.6 percent of the private workforce today, this proposed legislation would apply to any and all private sector businesses that have or might seek legal advice about labor or employment.

Should the final rule, which is due to be published any day now, adhere to the proposed rule the Department of Labor released in June 2011, if you or your company either hires someone to help you with a union organizing campaign, or you are the person hired to provide that help (that is, the persuader), both of you must now complete and provide to the DOL a detailed report on that engagement – whether or not the persuader has direct contact with your employees.

If passed in its current form the proposed rule defines “advice” so broadly that virtually any improvement in terms and conditions of employment could trigger the new regulation.

Activities that the rule would cover

The activity need not be union-specific as long as the purpose of the activity is to persuade employees, directly or indirectly, relative to their rights under the National Labor Relations Act. Here are just a few examples:

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  • Drafting or revising of materials of any sort for presentation or distribution to employees;
  • Conducting research, e.g. surveys or focus groups, regarding employee attitudes about the company, supervision, and/or their terms and conditions of employment;
  • Training supervisors to address questions or host meetings relative to unionization;
  • Establishing or facilitating employee committees;
  • Developing personnel policies or practices designed to make your company more employee-friendly.

And that is not the worst of it.

Client-Attorney communications would be made public

If the persuader works for a firm that represents and provides labor or employment advice to other businesses, the persuader must report not only his engagement with the employer to whom he provided the organizing advice, but “all receipts from employers in connection with labor relations advice or services regardless of the purposes of the advice.”

So much for client-attorney confidentiality, as much of the previously confidential communications would now have to be made public.

If the new persuader rule mirrors that published in 2011, the U.S. will be the only country where employers cannot receive private legal advice about union matters.

In the meantime, employers should closely follow the developments around the Department of Labor’s 2013 agenda, as certain decisions could dramatically affect what type of legal advice businesses can receive, how they obtain it and how they must report it.

Fredrick Englehart is senior counsel in the Labor & Employment Law Group of Cleveland-based law firm Walter | Haverfield. He has cultivated legal & labor law expertise through a unique career path that included membership in a local union and as an elected Business Representative of a San Francisco Local of the International Brotherhood of Teamsters. Contact him at fenglehart@walterhav.com.

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