Obama Persuader Rule on Union Advice Formally Axed

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By Ben Penn

The Trump Labor Department has officially killed an Obama-era rule requiring expanded disclosure of employers’ use of union-avoidance consultants.

By issuing a final rule July 17 to rescind the “persuader rule,” the DOL concludes a contentious regulatory and litigation history that occupied much of the Obama administration. The rule was shot down by a federal judge before it took effect, a factor that influenced the current administration’s decision to change course.

The regulation issued in 2016 would have required employers to disclose information about the third-party labor relations consultants, or “persuaders,” they hire to help craft messaging intended to dissuade workers from joining labor unions.

But in the new rule to reverse course on the 2016 rule, the DOL now agrees with the plaintiffs in the litigation who argued that the original regulation would have led to violations of attorney-client privilege.

“Pursuant to today’s final rule, the reporting requirements in effect are the requirements as they existed before the Persuader Rule,” the department states in its rescission.

The proposed version of the rescission left open the possibility of a new interpretation of the advice exemption to the Labor-Management Reporting and Disclosure Act. But ultimately, the agency decided the “best course of action is to achieve finality at this time.”

The LMRDA requires employers and consultants to report detailed information, including fee arrangements, about some activities designed to persuade employees to reject unions or to refrain from union organizing. However, the law exempts advice from the reporting requirements.

The Obama DOL took the position that specified activities and communications were not advice and so not covered by the exemption if they went beyond merely sharing suggestions with the employer on how to persuade employees to reject or refrain from unionization. But the new administration now returns to a broader application of the exemption.

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