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Mar 24, 2016

ALERT: DOL persuader rule expands requirements to report help from labor consultants

Labor Relations 

A revised regulation from the U.S. Department of Labor (DOL) will require employers to file electronic reports detailing all activities in which they use a consultant to persuade employees regarding their rights to organize and bargain collectively.

A revised regulation from the U.S. Department of Labor (DOL) will require employers to file electronic reports detailing all activities in which they use a consultant to persuade employees regarding their rights to organize and bargain collectively. The reports will be publicly accessible online, and must include specific information about the projects, organizations, people, and payments involved. Consultants (including attorneys and trade associations) will have to file additional reports identifying the employers for whom they provide these services. A few narrow exceptions exist, but if a consultant engages in both persuader activities and exempt activities, the entire arrangement between the employer and consultant must be reported (81 Fed Reg 15923, March 24, 2016).

Previously, persuasive activities only had to be reported if a consultant directly communicated with employees (such as a presentation or conference call). The DOL has now concluded that workers are also entitled to know when labor consultants are working in the background to indirectly influence them. To illustrate its point, the DOL has gone so far as to quote the Wizard of Oz on its web page summarizing the rules (“Pay no attention to that man behind the curtain. The great Oz has spoken.”). If the object is to persuade employees regarding union organizing and collective bargaining, then these activities by a labor consultant must be reported by both the employer and the consultant:

  • Planning, directing, or coordinating activities by supervisors or other company representatives (for example, drafting talking points for crew meetings);
  • Providing material or communications for the employer to share with workers (for example,  creating posters during a union organizing drive or writing letters summarizing the status of collective bargaining negotiations);
  • Conducting a seminar for supervisors or other company representatives (for example, holding an in-person training session or telephone conference call on union avoidance); or
  • Developing or implementing personnel policies, practices, or actions for the employer (for example, drafting a grievance procedure to fend off potential union organizing).   

The DOL’s new rule permits some limited exceptions to these reporting requirements related to consultants’ persuasive activities on behalf of employers:

  • No report is required when a consultant reviews a document for legal compliance or corrects mistakes in grammar or spelling.
  • An employer who attends a union-avoidance conference attended by other employers doesn’t have to report it. The presenter, however, must report the names of all attendees.
  • Conducting an employee opinion survey or union vulnerability assessment directed by a consultant doesn’t require a report, unless conducted in a way that is intended to persuade employees regarding organizing or collective bargaining.
  • An employer’s purchase of off-the-shelf persuasive materials doesn’t require a report, unless a consultant selects the materials (however, trade associations are allowed to offer a selection of off-the-shelf persuasive materials for their members without triggering a reporting obligation).
  • A consultant’s gathering of information about a union in connection with a labor dispute involving the employer doesn’t require a report as long as the source is publicly available.
  • A consultant’s advice regarding a course of conduct (recommending whether to take an action) doesn’t need to be reported. For attorney consultants, if the intent of the activity is exclusively to provide legal advice, then no report is required. If the attorney provides additional services related to persuading employees, however, then the entire arrangement must be reported although the legal services may be described generically as “legal advice.” The DOL specifically rejected arguments that a client’s name and amount of payment are protected by rules of confidentiality or attorney-client privilege.
  • A consultant may represent the employer before an arbitrator, court, or administrative agency without triggering a reporting requirement.
  • A consultant’s activities in negotiating with a union during collective bargaining or as part of a grievance procedure under a collective bargaining agreement don’t require a report.

The new requirements apply to all agreements or arrangements (whether verbal or written) that take place on or after July 1, 2016. Forms are available on the DOL’s web page for employer and consultant reporting requirements. Employers need only report once a year, by filing a Form LM-10 within 90 days after the end of their fiscal year and attaching a copy of any written agreements describing the terms of the consultant’s covered services. Labor consultants must act faster, by filing a separate Form LM-20 for each employer for whom they agree to provide covered persuasive services, within 30 days after the agreement. For reportable union avoidance seminars, a consultant must file a Form LM-20 with a list of attendees within 30 days after the seminar. Then within 90 days after the end of the consultant’s fiscal year, it must file a Form LM-21, which is a comprehensive report of all receipts and payments made as a result of the activities described in Form LM-20.

Willfully failing to file the reports, misrepresenting facts on the reports, or failing to disclose material facts on the reports can result in criminal penalties of up to one year in prison or a fine of up to $10,000. Individuals who sign the reports (the company president and treasurer) are personally responsible for the filing of the reports, and for any statements on the reports that they know to be false.

Tips: As an employer, if you need assistance in dealing with union organizing or in communicating with your employees related to collective bargaining, Vigilant is still available to help. Before doing so, though, you should talk with your Vigilant attorney to decide on the type of assistance desired. No reports will be required if your Vigilant attorney provides pure legal advice or represents you during a grievance or at the bargaining table. If your needs extend more broadly, though, to crafting communications to employees with the intent to persuade them to reject a union or support your stance during collective bargaining, then you should understand the reporting consequences before proceeding. Have specific questions about the new rule? Contact your Vigilant employment attorney.

This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.