Department of Labor Action Alert

The Department of Labor’s Office of Labor-Management Standards in June issued a proposed rule that would  fundamentally change the interpretation of the “advice” exemption under the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).  This proposal is known as the “persuader rule”.  You may send comments directly to the agency, which are due on Wednesday, September 21.

Background

Under existing law, employers are required to report “any agreement or arrangement “where the object is “directly or indirectly, to persuade employees to exercise or not to exercise…the right to organize and bargain collectively...”  (29 U.S.C. Section 433(a)(4) and (b)(1)).

However, any activities that provide “advice” rather than “persuasion” do NOT need to be reported (29 U.S.C. Section 433(c)).  This advice exemption allows employers to seek the counsel of attorneys and labor law consultants to help them comply with the law.  For more than 50 years, DOL has distinguished between “direct” and “indirect” contact with employees, requiring direct contacts to be reported but NOT requiring the some types of advice to be reported, including providing draft speeches to an employer, training supervisors, and drafting policies.

Proposed “Persuader” Rule

SHRM is concerned that the proposed persuader rule would narrow the longstanding “advice” exemption for several reasons. These include:

1. The proposed rule is so broad that it would cover activities unrelated to traditional “persuader” activities, such as:
   * Planning a response to a union campaign;
   * Delivering draft communications for the employer to use;
   * Training supervisors on how to comply with the NLRA;
   * Drafting or revising policies.
2. The expanded definition of reportable activity would require law firms, if they report as a “persuader” for one client, to disclose all fees and arrangements from all clients for all labor relations services.  This may have a chilling effect on consultants choosing to provide labor relations counsel, and it may prevent employers from seeking critical guidance on how to comply with federal law.
3. The proposed regulation also seriously hinders the attorney-client relationship by exposing privileged communications to attack by unions.  In fact, the American Bar Association has opposed the persuader rule to protect client confidentiality.

Action Needed

Before or on September 21, please submit your comments to the Regulations.gov website by visiting HERE.  On this website, you should type your information into the form then make your comments in the section on the right and click the SUBMIT button.  Please note that when the regulations.gov website is under heavy use, it may take more than one attempt to fully load the page.  Comments to the DOL are due on or before September 21, 2011.

Please consider submitting your own comments about how your organization uses outside consultants to help you comply with the laws governing union organizing and your thoughts on the proposed rule.  Or use the suggested language below to craft your submission.

If you have questions about this persuader rule, you may contact Nancy Hammer, SHRM’s Senior Policy Counsel, at nancy.hammer@shrm.org.

Suggested Language

Human resource (HR) professionals strive to comply with all aspects of employment law and understand the importance of laws governing union organizing.  As an HR professional and member of the Society for Human Resource Management, I am very concerned about the Department of Labor’s proposed changes to the “advice exemption” of the LMRDA and its effect on both employers and employees.

The role of HR is to understand and value the critical role that employees play in the success of any organization.  This role includes creating benefit packages, policies, and work environments that maximize employee engagement in both union and non-union workplaces.  It also includes ensuring compliance with a multitude of employment laws.

The laws and rules governing union organizing are complex and constantly under discussion.  The proposed regulations broaden the number and types of activities that would have to be reported under the LMRDA.  I am concerned that this will cause outside consultants on whom HR professionals rely for advice to stop providing critical advice on how to best comply with the law.  As a consequence, the persuader rule may limit the information that employees receive about the important decision whether or not to join a union in their workplace.

I urge you to reconsider the proposed changes to the advice exemption.