Since the Labor Management Reporting and Disclosure Act of 1959 passed, employers have been obligated to disclose to the Department of Labor when they retain consultants to engage in “direct persuader activities.” That is, activities where the consultants directly address the employers and employees on a question of unionization and collective bargaining. The DOL has adopted a final Persuader Rule which requires employers to disclose when they have retained or employed advisers who may indirectly persuade the employer’s workers. The new rule requires employers and their hired consultants to report when the consultants directly persuade workers or when a consultant is engaged in the following activities: (1) plan, direct or coordinate managers to persuade workers; (2) provide persuader materials to employers to disseminate to workers; (3) conduct union avoidance seminars; and (4) develop or implement personnel policies or actions to persuade workers.
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The new final rule still exempts agreements by which a consultant merely agrees to provide “advice” to an employer (“advice” is defined as “recommendations regarding a decision or course of conduct”) and exempts any agreement that involves only the provision of legal services. And there is the rub. It is common in many jurisdictions for attorneys to regularly review employee handbooks, policy statements and procedures. When such activities require a disclosure under the new final Persuader Rule may be more difficult to ascertain than one first thinks.
Suppose an employer has operated its business to avoid unionization. It has done so by creating conditions in its workplace that are intended to rival or exceed conditions provided by similar businesses with union shops. In the course of managing its business, it retains advisors and lawyers to draft, review and prepare personnel policies that reflect the employer’s goal of providing a competitive and attractive workplace for employees. Are these policies and handbooks intended to indirectly persuade the workforce not to unionize? According to commentary and guidance from the Department of Labor, perhaps so. Because there are substantial criminal and civil penalties for failure to file the required annual disclosure form identifying your company as having retained “indirect persuaders,” it is important for employers and their advisors, counselors and lawyers to analyze their work and relationship to determine whether a disclosure is required. Both an employer and the retained advisor are separately obligated to file the disclosures with the Department of Labor. One can only imagine the consequences that would arise if only one of these two parties filed a disclosure.