As we’ve previously blogged, for several years the Obama Administration has been on a calculated campaign to increase unionization in America. Federal agencies, particularly that National Labor Relations Board, have been systematically changing longstanding rules to make it more likely that unions can prevail in election representation campaigns.  We previously blogged about two earlier key components of this campaign: the revised rules from the NLRB approving “quickie” union elections on dramatically shortened time frames; and even earlier efforts to allow unions to designate “micro-units,” increasingly small groups of employees so that unions may narrowly focus their organizing efforts.  Now, in the twilight of the Obama Administration, the final effort in the campaign to increase unionization has just been announced: the Department of Labor has finally issued its long threatened regulations that would dramatically narrow the scope of confidential advice employers can receive when dealing with union organizing campaigns.

On March 23, the DOL issued the final version of its proposed regulations re-interpreting a key provision in the federal statute that regulates labor consultants.  The “Labor Management Reporting and Disclosure Act” requires reporting to the federal government by unions and employers on a variety of their interactions.  This statute, originally passed in 1959, was primarily aimed at widespread public concerns about corrupt dealings between some employers and unions.  Thus, the LMRDA required extensive financial reports by labor unions and their leaders, as well as annual reporting by employers of payments or the gift of anything of value by employers to labor union leaders.  The LMRDA also required that employers report about payment to consultants who attempt to persuade employees as to whether or not unionization is right for them — and thus this section of the law has always been referred to as the “persuader” reporting requirement.   However, since its enactment, the LMRDA contained a broad exception, specifically indicating that nothing in that section required reporting about the services of anyone “giving or agreeing to give advice” to an employer.  Shortly after President Kennedy (who had played a key role in the passage of the LMRDA when he was in the Senate) was inaugurated, the Department of Labor issued regulations making it clear that the LMRDA reporting obligations do not apply to consultants who merely advised employers, including preparing materials that the employer was free to accept or reject.  Thus, for fifty years the reporting requirements of the LMRDA have been well known: they applied only to “persuaders” who appeared before employees and personally tried to persuade them to reject unionization.  Others, such as lawyers who focused on labor law, were free to give confidential advice to employers so long as they did not themselves attempt to persuade employees.

This application of the “advice” exception was critical for labor relations attorneys.  The reporting required for “persuaders”  included identifying all clients receiving labor relations advice, and all fees received from those clients, even if wholly unrelated to “persuader” activity.

President Obama’s DOL has sought to change that.  The new rules were originally proposed more than five years ago and have been extraordinarily controversial from the onset.  By design, the proposed rules will dramatically reduce the scope of confidential advice that can be given to employers suddenly faced with union organizing efforts (and, by virtue of other initiatives from the NLRB, now having to respond in dramatically shortened time).   Under the new rules, many routine activities by labor lawyers will lead to mandatory reporting:

  • Advising employers about when and where they can meet with employees who are considering unionization;
  • Advising employers about what they should or should not say to their employees;
  • Advising employers about how they can lawfully gather information;
  • Advising employers about what materials to use in a union organizing campaign;
  • Advising an employer’s supervisors in a seminar setting about union avoidance;
  • Advising an employer about potential changes to personnel policies, if done in response to concerns identified during the union organizing campaign.

All of these issues raise serious, sometimes subtle issues under the labor laws; NLRB case law establishes precise, if not downright picky, rules related to virtually all actions an employer might take during an organizing campaign.

From the initial promulgation of the proposed rules five years ago, many commenters have expressed deep concerns that the new reporting requirements will require the publication of advice from counsel, including aspects of the attorney-client relationship that are unrelated to any particular union organizing drive. It is thus unsurprising that numerous groups have made clear that litigation over the newly enacted “persuader” rules is a certainty.  As released by the DOL yesterday, the new rules are scheduled to become effective on July 1, 2016.

Given the numerous threats of litigation, whether the new rules will ever be enforced remains to be seen.  However, it is clear that if nothing else, the Obama administration as introduced dramatic new uncertainty in how employers may respond to union organizing.