It’s more than mere red tape.
Next month, the Department of Labor is expected to release its “final” rule on the nearly five-year old scheme to require employers and their service providers (e.g., advisors, attorneys, consultants, survey companies, and even website developers) to report their financial arrangements, as well as the payments made and received.
They’re known as the “persuader rules” and they will, very likely, affect every employer* in the U.S. that has two or more employees and ever makes a call to an outside attorney—or even a human resources consultant—over employee-related matters, hires a survey company, designs a website for employees, pays someone for an employee handbook, or attends a human resources conference or seminar…regardless of whether or not they have union-related issues.
Here’s the background.
In 1959, Congress passed the Labor Management Reporting and Disclosure Act (also known as Landrum Griffin).
Passed in large measure as the result of union corruption, the law requires unions to file financial disclosures on an annual basis.
However, a lesser-known component of the law requires employers who hire any person(s) “to persuade” employees in the exercise of their Section 7 Rights (under the National Labor Relations Act) to disclose their financial arrangements.
Under the LMRDA, if there is “persuading” going on, both parties are required to file with the DOL. If they (willfully) do not file or provide false information, it can mean jail time.
For years, the DOL’s interpretation has been that “persuading” employees was directly meeting with employees and, therefore, reportable activity.
“Advice,” however, was not considered persuading (since, really, someone can take someone’s advice or leave it) and, as a result, it was specifically exempted.
However, unions and their cronies at the Department of Labor have long believed that the advice that lawyers and consultants give should be reported to the DOL as well—even if they are not directly meeting with employees.
Calling the current interpretation of the advice exemption from reportable persuader activity “overly broad,” the proposed rule states, “ ’Advice’ means an oral or written recommendation regarding a decision or a course of conduct. In contrast to advice, ’persuader activity’ refers to a consultant’s providing material or communications to, or engaging in other actions, conduct or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively.”
The key word that the Department of Labor is targeting is “indirectly.” Any third party activity that could indirectly persuade employees in the exercise of their rights should be reported, according to the DOL.
“…activities that have as a direct or indirect object to, explicitly or implicitly, influence the decisions of employees with respect to forming, joining or assisting a union, collective bargaining, or any protected concerted activity (such as a strike) in the workplace. [Pages 68 & 69].”
Here are 3 things every employer* should know about the proposed “persuader” revisions:
1. The persuader rules do NOT just apply to “union issues”
Although many believe the “persuader” revisions only apply to companies with “union issues,” they don’t. In fact, much of the proposed rules apply to what is normally considered “human resources-related” matters.
As the National Labor Relations Board views workplace policies as affecting employees’ Section 7 Rights, a mere phone call to your lawyer about your company’s recording policy (see Whole Foods decision) could trigger a reporting obligation.
In fact, the Department of Labor specifically stated in its 2011 proposed revision (in full below) that such things as using third-party help for employee handbooks, policies, surveys, building websites, and even attending conferences or seminars would trigger a reporting obligation.
Now, under the proposed rules, virtually anything that affects employee relations would be considered reportable activity if an employer uses an outside vendor.
Let’s say, for example, your HR manager attends a SHRM conference that has a session on the best practices for employee handbooks. That attendance would likely be reportable activity.
2. All reports to the Department of Labor will become public information.
This is already the case. Once a report is filed with the Department of Labor, it goes on the DOL’s website (unionreports.gov), usually within a few weeks.
This allows anyone with access to the internet (i.e., competitors, customers, litigants, and even union organizers) to see how much a company pays its attorneys, or other advisers.
3. The proposed reporting rules will enable unions to develop “hit lists.”
As the DOL will make the financial reports available on line, unions that do opposition research, (e.g., target companies for unionization) will have that information well beforehand.
More importantly, however, (as noted here in 2011) during strikes: “Under the Department of Labor’s proposal, not only will the firms that supply replacement workers likely be required to file reports with the Department of Labor, it is highly likely that the Department of Labor will require the replacement workers themselves will have to file with the DOL, which will then make the information public, on the internet, for union bosses (and others to view).”
If the DOL’s final proposal is mandated in March, as expected, there will likely be significant legal challenges.
However, no one knows for certain what the outcome of those challenges will be.
* The DOL’s new “persuader” rules would not apply to employers—like airlines and railroads—that are not under the jurisdiction of the National Labor Relations Act.
Here is the Department of Labor’s proposed rule, as of 2011: