Labor Secretary Thomas Perez has given American businesses a short reprieve from a controversial proposed rule that, if promulgated, will restrict business’ ability to obtain legal counsel and other labor relations advice potentially leading to a dearth in labor counseling. Perez told an audience at the U.S. Chamber of Commerce last week that the new rule was “not going to happen” this November, as the Department of Labor had originally planned.
While the Department has received over 9,000 comments on its proposal and considering the negative impact it will have on American businesses, it surprisingly hasn’t received much media attention.
Presently, many companies retain the services of labor consultants, some of whom are attorneys, to help them navigate the labyrinth of American labor laws. These consultants are crucial for business because employers are focused on running their businesses and need labor consultants to assure their compliance with applicable laws. Employers especially turn to labor consultants amidst a union-organizing campaign.
In order to ensure that such consultants are not engaging in nefarious activities, Congress passed the Labor Management Reporting and Disclosure Act (LMRDA) in 1959. The LMRDA requires employers and their labor consultants to file extensive disclosure forms when the consultant communicates with employees in an effort to persuade them whether to exercise their right to organize and/or collectively bargain.
Notably, the LMRDA provides an “advice” exemption which since 1962 has been interpreted to exclude consultants who merely provide advice to the employer but have no direct contact with the employees. Such advice can include, for example, assistance with written material or a prepared speech, provided the employer, not the consultant, is acting as the “persuader.” This interpretation is fully consistent with the statute and is perfectly logical because the consultant is not actively engaged in directly attempting to influence an election or the employees’ views on unionization rather he is only providing advice to the employer who may or may not use it.
However, under the proposed Department of Labor regulation, that exemption would be virtually nullified. The termination of this exemption threatens to impose a heavy regulatory burden on businesses and law firms and disadvantage employers when unions are attempting to organize their employees. At a time when the federal government’s focus should be on creating an environment conducive to job creation, it is instead unnecessarily expanding disclosure requirements to make union organizing easier.