DOL to implement final union persuader rule



Publication March 2016

Five years after proposing a controversial regulatory change to the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) the Department of Labor (Department or DOL) finally announced that it is set to implement the final rule on reporting union persuader activities.  The proposed rule was first introduced on June 20, 2011 and the final rule will take effect April 25, 2016. It will apply to all arrangements, agreements and payments made on or after July 1, 2016.  Hailed by the Department as a regulatory change to promote transparency and help employees make well-informed decisions about union representation, the final rule attempts to narrow the scope of advice which would be exempt from the reporting requirements.  The new rule would require employers and labor relations consultants, including legal consultants, to report activities and disclose information regarding their relationships that has never been previously required.


Section 203 of the LMRDA requires disclosure of agreements or arrangements between employers and labor relations consultants under which the consultant undertakes, or agrees to undertake, activities meant to sway workers with respect to whether or not to exercise, or how to exercise, their rights to organize and bargain collectively.  This requirement was enacted to dissuade the activities of consultants who operated as secret agents and infiltrated a workforce to persuade workers not to unionize.  Consultants must disclose the identity of their client, the retention or fee agreement, the fees received and a description of the services provided.  Failure to comply may result in jail up to a year and a $10,000 fine.

However, section 203(c) of the LMRDA carves out an exemption to the reporting requirements for agreements or arrangements in which the consultant is providing advice regarding employee relations.  Section 203 (c) specifically states:

"Nothing in this section shall be construed to require any employer or other person to file a report covering the services of such person by reason of his giving or agreeing to give advice to such employer or representing or agreeing to represent such employer before any court, administrative agency, or tribunal of arbitration or engaging or agreeing to engage in collective bargaining on behalf of such employer with respect to wages, hours, or other terms or conditions of employment or the negotiation of an agreement or any question arising thereunder." 

Further, section 204 exempts information communicated in the course of an attorney-client relationship.  Section 204 specifically states:

"Nothing contained in this Act shall be construed to require an attorney who is a member in good standing of the bar of any State, to include in any report required to be filed pursuant to the provisions of this Act any information which was lawfully communicated to such attorney by any of his clients in the course of a legitimate attorney-client relationship."

The scope of these exemptions in effect created a loophole under which no reporting was required unless the consultant had direct contact with employees.  Thus, the provision of scripts, talking points, letters, and other documents, as well as the presentation of union avoidance seminars to management before or during union organization were not required to be reported. 

New union persuader rule

Under the new rule, the Department claims to have revised its interpretation of the advice exemption to be consistent with Department's original 1960 interpretation of section 203.  However, this re-interpretation excludes from the advice exemption indirect persuasive activity such as conducting seminars and drafting speeches or other written materials to be delivered or disseminated to employees if the intent is to influence their actions.  Thus, reporting is required for activities that clearly are undertaken with an object to persuade employees. Advice provided in the traditional sense, for example, an oral or written recommendation regarding a decision or course of conduct, remains exempt pursuant to section 203 (c).  The attorney-client privilege as expressed in section 204 is also preserved under the new rule.  Any communication made in the course of the attorney client relationship, or any privileged information, is exempt from reporting.  The Department also assures employers and consultants that this interpretation is not meant to restrain or influence an employer's First Amendment right of free speech regarding the communications made to its employees (which is also protected by the National Labor Relations Act).

Regardless of whether the new rule is more consistent with the Department's original 1960 interpretation of section 203, it fails to provide a clear test of what consulting activities must be reported.  Typically, at the first sign of union organizing an employer will seek the services of an attorney.  Previously, it was clear that reporting was required only if the attorney communicated directly to employees in an attempt to influence the exercise of their rights to organize and bargain collectively.  Under the new rule, any activity undertaken by that attorney in an attempt to influence the exercise of employees' rights to organize and bargain must be reported.  For example, if an attorney conducts a union avoidance seminar for an employer in which he develops, or assists the employer with developing anti-union tactics and strategies to be used by the employer's representatives, such activity must be reported.  Similarly, if an attorney is contracted to draft or revise personnel policies with the intent to influence employees, such activity must be reported.  Even if an agreement or arrangement encompasses other legal activities to be undertaken by an attorney, for example representation in a court proceeding, as well as activities deemed reportable, the entire agreement must be disclosed and all activities under the agreement must be reported.


The new rule attempts to address the manner and intent behind the activities of a consultant or attorney undertaken on behalf of the employer without influencing the services a consultant or attorney may provide.  This makes for a very subjective reading of the rule.  For example, what if an extensive training seminar presentation contains one slide that discusses anti-union strategies or tactics?  While the intent of that one slide is obvious, does it taint the rest of the presentation and thus make it reportable?  Or, is the slide and the entire presentation treated as advice and recommendations on union avoidance and therefore not deemed reportable? And what about personnel policies that are drafted or revised without the intent to influence employees?  Do they have to be reported if these new policies tend to influence an employee's decision? 

Legal challenges to the new rule are sure to occur.  Moreover, we anticipate uncertainty and confusion regarding what activities are reportable and what information must be disclosed or can be withheld as advice or privileged under the attorney/client exemption.  Therefore, consultation with an attorney is highly recommended with respect to the determination of reportable activities and prior to the filing of any reporting forms.

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