The rule, which was scheduled to be enforced beginning July 1, requires both employers and attorneys (or other advisors) hired during a union organizing campaign to file new disclosure reports with the department, amending the Labor-Management Reporting and Disclosure Act. The rule has been put on hold for all 50 states.
A U.S. District judge in Texas put the Department of Labor’s (DOL’s) Persuader Rule on hold for all 50 states, giving clubs respite from the rule’s impact. The rule requires both employers and attorneys (or other advisors) hired during a union organizing campaign to file new disclosure reports with the DOL. Its enforcement was scheduled to begin July 1, NCA Connect reported.
The Persuader Rule amends the Labor-Management Reporting and Disclosure Act (LMRDA). Under LMRDA, only direct contact between the attorney and the employees—where the attorney tries to persuade the employees against joining a union—would trigger the LMRDA disclosure requirements, NCA Connect reported.
While direct persuader activities start the reporting requirements, indirect activities were never subject to the LMRDA disclosure requirements. They were specifically excluded under the law’s “advice exemption,” NCA Connect reported.
The advice exemption allows attorneys to discuss a strategy with an employer and devise a plan to deal with the union campaign. The employer would then go forward and implement the plan himself. This had been the rule for over 50 years, NCA Connect reported.
The new rule removes the advice exemption. As such, all direct and indirect contact with employees now causes the LMRDA disclosure requirements to kick in. This includes:
- Planning, directing or coordinating supervisors’ or managers’ activities during a union campaign
- Providing persuader materials—either by drafting or revising such information meant to be distributed to employees (but only if it is intended to persuade against the union and not if it is to ensure legality)
- Conducting seminars to assist employers in dealing with a union campaign
- Developing or implementing personnel policies meant to persuade during a union campaign
NCA’s concern with this rule is that it will discourage many lawyers from assisting clubs when a union organizing campaign begins, leaving those clubs unable to effectively communicate their side of the story during the campaign. The rule also threatens the attorney/client relationship for clubs by forcing attorneys to disclose confidential information and by forcing clubs to disclose things they will not want out in the open during a union campaign, NCA Connect reported.
Furthermore, the rule will allow union organizers to stress that a club has money to pay for “hired guns” so it must have money to increase wages or benefits. Such a message will be a valuable tool for unions during a campaign.
U.S. District Judge Sam R. Cummings said that DOL likely did not have the authority to pass the rule, calling it “defective.” Indeed, the reason for the injunction was because the court believed there is a highly likelihood that the challenge to the rule would succeed once the case goes to trial, NCA Connect reported.