DOL rescinds Persuader Rule

Reporting requirements remain as before

Posted July 19, 2018

On Tuesday, 7/17/18, the U.S. Department of Labor (DOL) rescinded the 2016 Persuader Rule, which would have required employers and consultants to file reports when they reach an agreement that the consultant will perform activities to persuade employees about how or whether to exercise their collective bargaining rights. This meant that the reports would be filed not only for direct persuader activities – consultants talking to workers – but also for indirect persuader activities – consultants scripting what managers and supervisors say to workers.

The DOL indicated that the rule exceeded the authority of the Labor-Management Reporting and Disclosure Act (LMRDA), as it impinged on attorney-client privilege by requiring confidential information to be part of disclosures. The rule relied on an inappropriate reading of the LMRDA that required reporting based on recommendations that constitute “advice” under any reasonable understanding of the term. That fact alone, the DOL indicated, requires rescission. Even if the statute does not unambiguously forbid the Persuader Rule, strong policy reasons — in particular, the Persuader Rule’s effect on the attorney-client relationship — militate in favor of rescission.

The rule was strongly condemned by many stakeholders, including the American Bar Association. In November 2016, a federal court blocked the rule from taking effect, indicating that that it was incompatible with the law and client confidentiality.

The LMRDA requires two sets of parallel reports:

  • Labor organizations must report a wide array of financial information, including, for unions that are organizing workplaces, information on how much they spend on organizing campaigns; and
  • Employers who hire labor relations consultants to persuade employees one way or another on organizing and bargaining issues must also report these relationships, including how much they spend on these activities.

The rescinding rule appears in the July 18, 2017 Federal Register.

This article was written by Darlene M. Clabault, SHRM-CP, PHR, CLMS, of J. J. Keller & Associates, Inc.


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