As labor law practitioners brace for the new broad
“persuader rules,” they can’t help but wonder whether representing employers
faced with issues implicating labor laws would be worth the proverbial
headache. In an unprecedented move, the
rules – as proposed – would vastly expand the Department of Labor’s onerous
recordkeeping and reporting requirements.
In particular, the obligation to report would arguably be triggered in
nearly every facet of the labor attorney’s representation of his client. That, in turn, presents a whole host of
concerns for the labor lawyer, not the least of which involve ethical dilemmas,
intrusion into highly confidential information, and the potential waiver of the
sacred attorney-client privilege. Adding
insult to injury, failure to comply with the new requirements could lead to
criminal sanctions. Not surprisingly,
the proposed rules have been met with sharp resistance.
On November 27, 2013,
the Department of Labor announced that the proposed rules, which were
originally slated for a November 2013 release date, would not be issued until
March 2014. At issue are rules
interpreting the Labor Management Reporting and Disclosure Act of 1959
(“LMRDA”), which generally includes financial reporting and disclosure
requirements for labor organizations, their officers and employees, employers
and labor relations consultants.
Sections 203(a) and (b) of the LMRDA impose upon employers and their
labor relations consultants a duty to report any agreement or arrangement
between them involving the consultants’ attempt to, directly or indirectly,
persuade employees to exercise or not to exercise their rights to
organize. Section 203(c), however,
exempts from these requirements “the services of such [consultant] by reason of
his giving or agreeing to give advice to such employers.”
Historically, the DOL
has interpreted the term “advice” to exclude an employer-consultant agreement
in which the consultant has no direct contact with employees and limits his
activity to providing the employer with advice or materials for use in
persuading employees, which the employer is free to accept or reject. The DOL’s newfound interpretation, however,
dramatically narrows the communications exempted from the LMRDA’s requirements
by swapping the DOL’s longstanding interpretation of the term “advice,” for one
that is much more narrowly construed.
Critically, the DOL has proposed redefining persuader activities as “all
actions, conduct, or communications that have a direct or indirect object to
persuade employees.” Accordingly,
whether an attorney had direct contact with employees is no longer
relevant. Neither is whether the
employer was free to accept or reject the materials provided by the attorney.
According to the DOL,
reportable activities will now include:
drafting,
revising, or providing materials or communication of any sort, to an employer
for presentation, dissemination, or distribution to employees, directly or
indirectly;
developing or
administering employee attitude surveys concerning union awareness, sympathy,
or “proneness”;
training
supervisors or employer representatives to conduct individual or group meetings
designed to persuade employees;
coordinating or
directing the activities of supervisors or employer representatives to engage
in the persuasion of employees;
establishing or
facilitating employee committees;
developing
employer personnel policies or practices designed to persuade employees;
deciding which
employees to target for persuader activity or disciplinary action; and/or
coordinating the
timing and sequencing of persuader tactics and strategies.
Reportable activity will also include the mere supplying of
information to an employer concerning the activities of employees or a labor
organization in connection with a labor dispute involving such employer,
including:
research or
investigation concerning employees or labor organizations;
supervisors or
employer representatives;
employees,
employee representatives, or union meetings; and
surveillance of
employees or union representatives (video, audio, Internet, or in person).
It’s not difficult to
see how the DOL’s proposed reinterpretation of the advice exemption poses a
threat to the sanctity of the attorney-client relationship. Indeed, an employer who hires outside counsel
for the purposes of obtaining advice on a labor issue would have to disclose
that relationship in a public report (accessible by unions, competitors and
customers), detailing who it hired, for what purpose, and how much it is paying
the attorney. Likewise, once an
attorney is labeled a “persuader,” which will easily – even inadvertently –
happen given that the new interpretation of what constitutes persuader activity
is incredibly broad, that attorney must report detailed information about all
of his clients, to whom he renders “labor relations advice or services.” Arguably, that would eliminate the
protections afforded to, for instance, a management employee who seeks advice
in connection with a non-persuader purpose that involves labor relations (e.g.,
drafting a social media policy that comports with the National Labor Relations
Board’s stance on the lawfulness of such policies).
The inevitable effect
(and some argue intent) of the new reporting requirements would be to dissuade
employers from seeking, and attorneys from providing, legal advice. Regardless, attorneys and companies should
closely follow the proposed rules and, if/when they are released, reevaluate
the necessity and scope of representation with respect to labor law issues.
By: Isabel Lazar,
Esq.
Source: Seyfarth
Shaw LLP
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