A lawsuit Associated Builders & Contractors and other national or state groups have filed in U.S. District Court for the Eastern District of Arkansas challenges the U.S. Department of Labor’s (DOL) final “persuader rule.” Officially titled Interpretation of the “Advice” Exemption, it revises the definition of what activities constitute “advice” and expands circumstances under which public reporting is required per the Labor-Management Reporting and Disclosure Act of 1959.
“[The] rule is a clear attempt to chill employers’ First Amendment rights by placing onerous restrictions on their ability to receive advice and discuss the potential pros and cons of unionization with employees,” affirms ABC President Michael Bellaman. “[It] will have a particularly disparate impact on small businesses that do not employ in-house legal counsel, and carries serious repercussions including possible jail time.
“In overturning 50 years of precedent, the rule replaces clear-cut legal definitions with an indecipherable guessing game for employers and advisors. The rule is designed to silence the voice of employers by working hand-in-glove with the National Labor Relations Board’s flawed ‘ambush election rule’ in a thinly veiled attempt by the administration to achieve the goals of its failed ‘card check’ proposal.”
ABC has opposed the persuader rule since it was first proposed in 2011, expressing concerns through: comments and a letter submitted to the Labor Department in 2011 and 2014; a late-2015 letter to the Office of Information and Regulatory Affairs (OIRA) from a coalition of business groups, including 29 ABC chapters; and, a meeting with OIRA officials earlier this year. Representing ABC as general counsel are Littler Mendelson P.C. and Cross, Gunter, Witherspoon & Galchus, P.C. Joining ABC and its Arkansas chapter as plaintiffs are Coalition for a Democratic Workplace, National Association of Manufacturers, Arkansas State Chamber of Commerce/Associated Industries of Arkansas and Arkansas Hospitality Association.
Leading up the lawsuit, the persuader rule had met with strong criticism from other business interests. “It is a shame the Department of Labor would expend its resources on a regulation that is so clearly one-sided and intended solely to benefit its big labor, rather than focusing on initiatives that would invigorate a still-underperforming economy,” said U.S. Chamber of Commerce Senior Vice President, Labor, Immigration and Employee Benefits Randy Johnson. “Instead, on the heels of the [National Labor Relations Board’s] ambush election regulation, DOL’s rule is all about tilting the playing field in favor of big labor, who—in the face of its continuing inability to convince employees to buy its outdated product—again asked its friends in the administration to change the rules to their advantage.
“It’s the height of hypocrisy that the unions support this rule based on the claim that it will help give employees more informed decisions with regard to unionization, but they have steadfastly opposed requiring greater disclosure obligations on how union dues are spent for political and other reasons not related to collective bargaining.”
“In narrowing [the advice] exemption, DOL is greatly limiting businesses’ ability to obtain labor relations advice from attorneys, consultants and trade associations, including ABC, which will have a particularly onerous impact on any business without in-house counsel,” observed ABC Vice President of Legislative and Political Affairs Kristen Swearingen. “No employer should have to wade through the final rule’s 446 pages to figure out whether they can safely get advice on what they can say to their employees … ABC is committed to fighting this burdensome, costly and poorly crafted rule through every available avenue.”
DOL POSITION
The new DOL rule interprets Section 203 of the Labor Management Reporting and Disclosure Act, which requires labor organizations, consultants, and employers to file reports and disclose expenditures on labor-management activities. The law intends to prevent abuse, corruption and improper practices by labor organizations, employers and labor relations consultants alike, DOL officials contend.
Announcing the rule, they cited a longstanding “loophole” that allows employers to hire consultants to create materials, strategies and policies for organizing campaigns—and even to script managers’ communications with employees—without disclosing anything, as long as the consultant does not directly contact employees. The new rule closes the loophole to align the regulation with the statute, DOL notes, by requiring reporting on “actions, conduct or communications that are undertaken with an object, explicitly or implicitly, directly or indirectly, to affect an employee’s decisions regarding his or her representation or collective bargaining rights.”