The Department of Labor Pulls the Plug on the “Persuader Rule” - Best Best & Krieger
Legal Alerts Jul 19, 2017

The Department of Labor Pulls the Plug on the “Persuader Rule”

Comment Period Open

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The Department of Labor has begun the process of withdrawing a 2016 regulation that increased the reporting requirements for employers, labor relations consultants and others under the Labor-Management Reporting and Disclosure Act. The LMRDA, in part, covers union organizing campaigns in the private sector. Known as the “persuader rule,” the regulation introduced a new interpretation expanding the scope of reportable activities to include, among other things, legal advice — possibly creating a “chilling effect” between attorneys and business clients.
 
Though the DOL has begun the process of rescinding the persuader rule, rescission is far from final. To rescind it, the DOL will have to follow the same process it took to create it, which can sometimes last years. According to the DOL, once the rule is rescinded, the reporting requirements would be the same as they existed before the persuader rule.
 
For now, business owners may breathe a small sigh of relief but should be on the alert for further developments. Additionally, interested parties wishing to make their voices heard should take advantage of the public comment period, which will close Aug. 11.
 
The LMRDA requires employers and their labor relations consultants to report agreements when a consultant undertakes activities intended directly or indirectly to persuade employees in matters related to organizing and collective bargaining. Technically, mere “advice” is exempted from this requirement. Prior to the “persuader rule,” the DOL had interpreted this exemption to exclude consultants who had no direct contact with employees. The persuader rule changed that by requiring employers and consultants to report a consultant’s “behind the scenes” activities if they were intended to persuade employees about their organization and collective bargaining rights.
 
Shortly after publicizing the new regulation, the persuader rule was challenged in court, and a nationwide injunction was granted against it. The rule remains in legal limbo.
 
The DOL listed several reasons for rescinding the persuader rule. Among those reasons is the increased recordkeeping and reporting burdens on the filer. Additionally, this burden would apply to some employers and consultants who had not previously been required to report activities. The DOL also noted that enforcement of the persuader rule would result in the “lengthier and more complicated investigation” of a consultant’s interactions with the employer’s supervisors and other representatives. This would require DOL to dedicate more resources to enforcing the persuader rule.
 
For more information about this issue and how it may relate to your business, contact the authors of this Legal Alert listed at right in the Labor & Employment practice group, or your BB&K attorney.
 
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

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