The Persuader Rule is Postponed

The Department of Labor has delayed its target date for publishing its final rule on the “advice exception”, a/k/a the “persuader rule”. It’s not clear why the rule was postponed, but opponents to the rule think the DOL postponed publication to shore up the language against anticipated legal challenges. Regardless, this rule could have significant impact on employers and how they deal with union organizing, so we’ll monitor this rule closely.

Current Law on Persuader Activity

To get everyone up to speed, the Labor-Management Reporting Disclosure Act requires employers to report to the Department of Labor (DOL) each time they engage a consultant to assist in dealing with employees’ rights to organize or bargain collectively. This is also known as persuader activity. If employers fail to comply with the reporting requirements, they could be fined up to $10,000 and face jail time of up to a year.

There is, however, an advice exception to the persuader rule that has consistently been applied to exclude advice from attorneys, so long as the attorneys have not direct contact with employees.

The Proposed Rule Changes Everything

The new rule significantly narrows the advice exception and would require employers to file reports with the government dealing the labor work an attorney or law firm performs for the employer. This report, which would be publicly available, would have to be filed, even if the attorney did not meet with employees.

Some of the specific categories of persuadable support included in the new rule are:

• Drafting materials for presentation or distribution to employees;
• Training supervisors to conduct employee meetings;
• Developing HR policies or practices; and
• Other (my favorite).

This new rule certainly appears to require an employer to waive its attorney-client privilege and I sure there will be challenges to any effort to implement this rule. We will continue to monitor the situation and update you as the March, 2014 publication date approaches.