Mar 23, 2016

New U.S. Department of Labor Rule Allegedly “Improves Transparency for Workers Considering Union Representation.”

On March 24, 2016, the Office of Labor-Management Standards (OLMS) will publish a final rule that revises the interpretation of the “advice” exemption of section 203(c) of the Labor-Management Reporting and Disclosure Act (“LMRDA”).

If employer-consultant agreements and arrangements are entered into on or after July 1, 2016, the parties to the agreement must report if a consultant handles, or agrees to handle, “persuader activities.”  These are defined as “any 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.”  Under the “typical reportable agreement or arrangement,” a consultant agrees to manage a campaign to avoid or counter a union organizing or collective bargaining effort, either jointly with the employer or separately.  The rule also requires consultants to file reports when they hold union avoidance seminars for employers.

Consultant activities that trigger reporting of an agreement or arrangement with an employer include “direct contact” with employees with the goal to persuade them, as well as the following categories of indirect consultant activity undertaken with the goal to persuade employees:

  1. Planning, directing, or coordinating activities undertaken by supervisors or other employer representatives including meetings and interactions with employees;
  2. Providing material or communications for dissemination to employees;
  3. Conducting a union avoidance seminar for supervisors or other employer representatives, and
  4. Developing or implementing personnel policies, practices or actions for the employer.

The Labor Relations Consultant must use the Form LM-20 (the electronic form will not be available until July 1, 2016).  Employers must use the Form LM-10 (The electronic form will not be available until January 1, 2017).

Exempt “advice” activities are limited to those activities include an oral or written recommendation regarding a decision or course of conduct.  According to the current DOL guidance, agreements are not reportable if:

  1. The consultant merely advises or represents the employer.  For example, agreements in which a consultant exclusively provides legal services, representation of the employer before a court or similar tribunal or during collective bargaining negotiations.
  2. The consultant provides guidance on employer personnel policies and best practices;
  3. Seminars in which the consultant does not develop or assist the attending employers in developing anti-union tactics or strategies;
  4. “Vulnerability Assessments,” including the use of surveys, in which a consultant evaluates an employer’s proneness to union-related activity and offers possible courses of action;
  5. Sales pitches;
  6. Sales of “off-the-shelf” materials;
  7. Provision of information for use only in conjunction with an administrative, arbitral, or judicial proceeding, and
  8. Franchisor-franchisee agreements.

U.S. Secretary of Labor Thomas E. Perez touted the new rule by stating that “This new rule will allow workers to know whether the messages they’re hearing are coming directly from their employer or from a paid, third-party consultant. . .  As in all elections, more information means better decisions.”

Employer associations, such as the Retail Industry Leaders Association, have vowed to work with legislators to reverse the rule.

If you have any questions regarding these issues raised in this client alert, please contact your labor and employment counsel at Smith, Gambrell & Russell, LLP.

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice.


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