Employers May Bypass Union Activities’ Reporting Requirement Under the “Persuader Rule” If They Take Action Before July 1st

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Last month, we reported on the U.S. Department of Labor’s (“DOL”) recently-issued Final Rule (“Rule”), designed to boost transparency in union/collective bargaining. Beginning July 1, 2016, the Rule requires public disclosures from an employer’s advisors (e.g., labor relations consultants or attorneys) who are engaged to perform any work that “has the ultimate objective of persuading employees” in relation to union/collective bargaining matters.

Previously, such disclosure only had to be made when the advisor communicates directly with the employer’s workers.  The Rule greatly expands the conditions under which disclosures must be made:  any work with the objective of persuading employees, even indirectly, must now be publicly disclosed—such as providing materials for an employer to distribute to workers, or developing strategies or procedures for persuading workers.  The Rule could thus expose previously confidential attorney-client or other financial relationships.

Three lawsuits attempting to block the Rule have been filed.  The DOL clarified during the ongoing litigation process that the Rule will not apply to any agreement between an employer and an advisor under the following conditions:

  1. The agreement is entered into before July 1, 2016
  2. The advisor agrees to provide “persuader” services on or after July 1, 2016
  3. The “persuader” services offered on or after July 1, 2016 would not have otherwise triggered reporting obligations prior to the issuance of the Rule

Employers who are concerned about the new disclosure requirements therefore have until June 30, 2016 to contact their labor relations advisors and discuss entering such an agreement, before July 1st.

Otherwise, the future of the Rule is unclear.  On June 22, the Minnesota District Court denied a preliminary injunction; however, Judge Patrick J. Schiltz expressed doubts about the validity of some of the Rule’s requirements.  Rulings in the Northern District of Texas and District of Arkansas are anticipated prior to July 1, 2016.  Interested employers should look for more developments as challenges to the Rule continue.

Action Items:

  1. Consult with your labor relations advisors immediately about entering into a long-term agreement before July 1, 2016.
  2. For more information about the Rule, see the DOL’s dedicated web page on Persuader Reporting.
  3. Look for more news from ManagEase as this area continues to develop.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2016 ManagEase, Incorporated.

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