Another layer of red tape has been added for employers seeking to avoid unionization.
Their consultants’ indirect communications with employees about unions—intended to sway workers against unionizing—now are activities that must be reported by the consultants to the federal government under the Department of Labor’s (DOL’s) final “persuader rule,” published in the Federal Register March 24. Consultants’ direct communications with employees already were reportable.
The rule may result in law firms getting out of the business of drafting employers’ union-avoidance communications and focusing instead on providing legal advice, which remains outside the reporting requirement, according to Phillip Wilson, president and general counsel for the Labor Relations Institute, a labor relations consulting firm based in Broken Arrow, Okla.
“The DOL’s just-released ‘persuader rule’ is an unprecedented intrusion into the attorney-client relationship,” said Michael Lotito, an attorney with Littler in San Francisco and co-chair of the firm’s Workplace Policy Institute. “While technical in nature, the purpose will be to restrict the ability of employers, especially small employers, to obtain the kind of confidential information they need to respond to our ever-changing labor laws. It will be challenged with great vigor.”
Jim Gray, a consultant with Jim Gray Consultants in Charleston, S.C., also expects there to be legal challenges of the final rule. If it sticks, though, it will be an “administrative headache,” he said. His company helps business leaders with union-organizing exposure.
Steven Bernstein, an attorney with Fisher & Phillips in Tampa, Fla., said the final rule is an intrusion on law firms’ duty to keep communications with clients confidential and will present attorneys with the choice of complying with either the federal persuader rule or state bar rules.
Already the American Bar Association, Association of Corporate Counsel and state attorneys general have said the rule will have a significant impact on the confidentiality of the attorney-client relationship, said Philip Rosen, an attorney with Jackson Lewis in New York City. He noted that the rule takes effect 30 days after publication in the Federal Register and applies to agreements made on or after July 1. There may be an injunction in the meantime, Rosen said.
Covered Indirect Activity
Indirect activity that will be reportable under the rule includes hiring a consultant to help defeat a union-organizing campaign. Even though the consultant has no direct contact with employees, often it will direct a campaign, frequently formulaic in design and implementation, for the employer to persuade employees to vote against union representation, the DOL noted in its summary of the final rule.
With indirect communication, the consultant typically scripts the campaign, including drafting letters, fliers, leaflets and e-mails that the employer distributes to its employees. The consultant also writes speeches that management gives to employees in mandatory meetings, provides statements for supervisors to use in meetings they are required to hold with direct reports, and controls the timing, sequence and frequency of these events, the DOL said.
Employers hire consultants to engage in this type of indirect persuasion in more than 70 percent of union-organizing campaigns, it added.
Without indirect persuader reporting requirements, employees do not know the source of the message, the DOL observed. “By knowing that a third party—the consultant hired by their employer—is the source of the information, employees will be better able to assess the merits of the arguments directed at them and make an informed choice about how to exercise their rights,” the DOL said. The reported information helps employees assess the extent to which the messaging reflects the true views of their employer and supervisors about issues in their particular workplace vs. a consultant’s general strategy to counter union representation, the DOL added.
Exception for Trade Association Seminars
Trade associations are subject to the reporting requirements only if they conduct union-avoidance seminars themselves, rather than subcontracting their presentation to a law firm or other consultant, the rule notes. And employers whose representatives attend the seminars generally will have no reporting obligations.
Also not reportable would be a seminar conducted by a consultant that hasn’t developed, or hasn’t assisted the employer-attendees in developing, a plan to persuade their employees not to unionize.
However, if there is a seminar designed to train supervisors or managers on how to communicate with their specific employees, that would trigger a reporting requirement, Wilson said.
Engagement Surveys Not Covered
Also not covered by the final rule are vendors of engagement surveys, Gray noted.
“About the only category of survey that DOL targets for reporting are what they call ‘push’ surveys,” Wilson said, noting that he hasn’t seen a push poll used in a union campaign in nearly 25 years. “It may happen, but not often. So I think most survey companies will not have to report.”
This article was originally published by Allen Smith, J.D., the manager of workplace law content for SHRM.
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