‘Persuader’ Rule on Union Advice Should Go, DOL Proposes

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By Ben Penn

The Labor Department formally proposed rescinding the Obama administration’s “persuader” rule, which would have expanded disclosure requirements for employers that hire advisers to fight unionization.

In a new proposed regulation issued June 8, President Donald Trump’s DOL calls for rescinding the rule by citing the concerns raised by a federal judge who already blocked it from taking effect. The agency now opens up the rule for public comments starting June 12, allowing submissions over the next 60 days as part of a procedural step to eventually nullify the controversial regulation.

The persuader rule 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. The 2016 rule has never been enforced after an injunction was issued.

The new administration is also seeking to roll back the regulation so it can conduct a more detailed analysis of new categories of attorneys’ "indirect” persuasion, such as drafting materials to be distributed to employees. The department further explained that reversal of the rule is necessary because if the DOL “elects to change the scope of reportable activity beyond what has been in place since 1962, it can provide as thorough an explanation of its statutory interpretation as possible.”

The DOL also cited a lack of resources to enforce the rule as a reason to withdraw it.

“If the Rule is rescinded, as proposed here, the reporting requirements in effect would be the requirements as they existed before the Rule,” the agency wrote.

Labor Secretary Alexander Acosta first announced the rescission in an op-ed in May.

In response to a lawsuit by business groups, the judge issued an injunction last year on the grounds that the persuader rule is inconsistent with the Labor-Management Reporting and Disclosure Act and therefore unlawful. 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 act exempts advice from the reporting requirements. The prior administration's DOL took the position that consultant activity isn't exempt if its purpose is to persuade employees to reject or refrain from unionization, but the court disagreed. The statutory exemption protects employers against forced disclosure of information about their legal representation, it said.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

For More Information

The draft proposal is available at http://src.bna.com/pGT.

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