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DOL Provides Important Guidance Regarding “Persuader Rule”

Earlier this week, the Office of Labor Management Services (“OLMS”) of the U.S. Department of Labor (“DOL”) offered important guidance to employers concerning their reporting obligations under the recently amended Persuader Rule. The position articulated by OLMS offers a meaningful way for employers (and law firms) that enter into appropriate agreements before July 1, 2016—the amended Persuader Rule’s effective date—to avoid the potential obligation to file public disclosure reports concerning identifying payments that employers made in connection with services that will, for the first time, be considered “persuader activity.”

The New Persuader Rule

On March 24, 2016, the DOL issued its new “Persuader Rule,” which, among other things, requires employers and their advisors (including outside lawyers and consultants) for the first time to file public reports with the DOL disclosing their relationship, including amounts paid/received, for any advice that “indirectly persuades” employees regarding union organizing or collective bargaining. Previously, such reports were required only when a lawyer or other advisor made direct contact with the employer’s employees, regardless of the persuasive purpose of the advice.  The new rule provided that it would become effective on April 25, 2016, and would apply only to “persuader” arrangements and agreements, as well as payments (including reimbursed expenses) made on or after July 1, 2016. The rule is presently being challenged in at least three lawsuits.

During the course of litigation, the DOL clarified its position regarding the key dates that impact the agency’s enforcement of the rule. This month, the DOL stated that the new rule does not apply to any agreement between an employer and an advisor entered into before July 1, 2016, in which the advisor agrees to provide “persuader” services on or after July 1, 2016, provided that those “persuader” services would not have otherwise triggered reporting obligations prior to the issuance of the new rule.

What This Means for Employers

At a recent compliance assistance seminar, OLMS representatives stated that no persuader payment reporting will be required as a result of payments made after July 1 so long as those payments are tied to an agreement made prior to that date.

This interpretation by OLMS is considerably different from how many envisioned enforcement of the rule when the amendment was issued. Until now, most employers and law firms understood that post-July 1, any agreements or arrangements—as well as any payments related to indirect persuader activity—would trigger reporting, regardless of whether the agreements or arrangements were entered into before July 1. Given this new information, some employers may wish to sign long-term agreements with law firms or consultants now. At this point, it appears that so long as those agreements are made prior to July 1, any payments made under those agreements—even payments made later in 2016 and beyond—will not trigger reporting, according to OLMS.

Entering into agreements with labor counsel prior to July 1 should, given OLMS’s announced interpretation, protect advice and assistance provided by counsel from reporting and disclosure to the DOL. It is not necessary that an employer be facing a current threat of union organizing or an existing bargaining obligation for the employer to enter into such a relationship and take advantage of this opportunity to shield itself from future reporting obligations under the new, amended Persuader Rule.

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About this Author

Steven M. Swirsky labor employment lawyer health care and life sciences attorney
Member of the Firm

STEVEN M. SWIRSKY is a Member of the Firm in the Labor and Employment and Health Care and Life Sciences practices, in the firm's New York office. He regularly represents employers in a wide range of industries, including retail, health care, manufacturing, banking and financial services, manufacturing, transportation and distribution, electronics and publishing. He frequently advises and represents United States subsidiaries and branches of Asian, European and other foreign-based companies.

Mr. Swirsky:

  • Advises employers on a full range of labor and...
Adam C. Abrahms Labor Management Relations attorney Healthcare law lawyer

ADAM C. ABRAHMS is a Member of the Firm in the Labor and Employment and Health Care and Life Sciences practices, in the firm's Los Angeles office, where he serves as a member of the firm's Labor Management Relations practice group. He has devoted his practice almost exclusively to aiding employers in developing strategies to remain union-free and, in organized operations, to securing and expanding management rights.

Mr. Abrahms:

  • Represents clients before the National Labor Relations Board and other federal and state agencies, and in federal and state courts
  • Counsels and represents management on maintaining non-union status including union organizing and representation elections, corporate campaigns, supervisory education and training, preventative programs, and response strategies
  • Negotiates initial and successor collective bargaining agreements, mid-term negotiations, effects negotiations, and closing agreements, including strong pro-employer management rights, arbitration, successorship, and zipper clauses, and multi-unit, multi-location, multi-employer, and multi-union bargaining
  • Represents employers in unfair labor practices proceedings and arbitrations
Adam S. Forman, Epstein Becker Green, Workforce Management Lawyer, Chicago, Detroit, Social Media Issues Attorney

ADAM S. FORMAN is a Member of the Firm in the Employment, Labor, and Workforce Management practice, based in Chicago and Detroit (Metro). As noted in the 2015 edition of Chambers USA, Mr. Forman “is a renowned expert in social media issues relating to the workplace” and also “focuses on litigation, training and preventive advice on the employment side.” A frequent writer and national lecturer on issues related to technology in the workplace, such as social media, Internet, and privacy issues facing employers, Mr. Forman is often interviewed by...