U.S. Department of Labor Proposes Rule Significantly Impacting Employers and Attorneys/Consultants in Responding to Union Organizing Campaigns

Following failure of the Administration to secure passage of the Employee Free Choice Act (“EFCA”), federal agencies and departments have been attempting to adopt, through rulemaking, many of the "reforms" sought in the failed EFCA legislation. On June 21, 2011, the U.S. Department of Labor, Office of Labor-Management Standards joined in the effort, publishing a notice of proposed rulemaking and request for comments at (link to) 76 Federal Register 119, which would significantly change 40 years worth of interpretations and practice as to the reporting of "persuader" activities and the "advice" exception applicable to employers and labor relations attorneys and consultants.

Under Section 203 of the Labor-Management Reporting and Disclosure Act of 1959, employers are required to file Form LM-10 reports, and consultants are required to file Form LM-20 reports covering agreements or arrangements between employers and labor relations consultants under which the consultant is engaged in activities to persuade employees concerning their rights to organize and bargain collectively. Excepted from reportable "persuader" activities are "advice" or representation before a court, agency or arbitral tribunal, or in collective bargaining.

Since the early 1960's, the "advice" exception to reportable activities, particularly with respect to an employer's response to union organizing activities, has been interpreted fairly broadly by the Department of Labor, and reporting was not required for activities such as an attorney's review or revision of an employer's draft of speeches, letters or other documents which the employer intended to distribute to employees during the course of a union campaign, or even an attorney's preparation of such documents to ensure their compliance with applicable legal standards, so long as the employer was free to accept or reject the written material prepared by the attorney.

In the proposed rule, the Department of Labor expressly rejects the past and current interpretation of "advice," substantially narrowing the exception to the reporting requirement for persuader activities, and defines reportable persuader activities as all actions, conduct, or communications that have a direct or indirect object to persuade employees, including an attorney or consultant's provision of materials or communications or engagement in other actions, conduct or communications on behalf of an employer that, in whole or in part, have the object of directly or indirectly of persuading employees concerning their rights to organize or bargain collectively, regardless of whether or not advice is also given.

Examples provided in the proposed rule of reportable “persuader activities” include an attorney or consultant's planning or orchestrating a campaign to counter a union organizing effort; directing or coordinating the activities of an employer's managers or supervisors; and, providing material for dissemination to employees during the course of an organizing campaign – as opposed to merely counseling employer representatives on what they may lawfully say to employees, ensuring a client's compliance with the law, or providing guidance on NLRB practice or precedent. Also reportable as persuader activities by both employers and consultants are conducting or attending seminars, webinars or conferences to the extent that the meeting involves actions, conduct or communications having a direct or indirect object of persuading employees concerning union representation or collective bargaining rights. Consultant training of supervisors to conduct individual or group employee meetings to persuade employees concerning such matters is also branded as reportable activity.

The proposed rule also contains extensive modifications to both the instructions to and form LM-10, to be filed by employers, and Form LM-20, to be filed by consultants with respect to persuader activities.

Comments to the proposed rule must be received on or before August 22, 2011, and may be submitted electronically through http://www.regulations.gov, using RIN No. 1245-AAO3 to locate the proposed rule.

The proposed rule, if adopted, will substantially alter the playing field in labor-management relations. Employers should monitor the progress of this rule closely. We will provide additional alerts as the rulemaking process progresses.