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There is a big piece of breaking news related to the DOL persuader rule. It’s not all completely clear right now, but several sources including the US Chamber of Commerce are reporting, and the DOL seems to be confirming that any agreement related to so-called “persuader” services including legal, consulting and association services that are in place prior to July 1st will NOT BE subject to reporting under the new requirements.
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The excerpt below is from a status report filed by DOL in the Arkansas challenge to the new LRMDA requirements, the , pertinent part which is excerpted below:
On March 24, 2016, the Department of Labor’s (“the Department”) Office
of Labor-Management Standards published a rule entitled “Interpretation
of the ‘Advice’ Exemption in Section 203(c) of the Labor-Management
Reporting and Disclosure Act,” 81 Fed. Reg. 15924 (“the Rule”). While
the effective date of the Rule is April 25, 2016, the rule is only applicable
to arrangements and agreements made on or after July 1, 2016, and to
payments made pursuant to arrangements and agreements entered into on
or after July 1, 2016. 81 Fed Reg. 15924. The Rule revises the reporting
requirements, and related recordkeeping requirements, for certain
agreements and arrangements entered into between employers and labor
relations consultants or other independent contractors, and payments made
pursuant to those agreements and arrangements. The Department will not
apply the Rule to arrangements or agreements entered into prior to July 1,
2016, or payments made pursuant to such arrangements or agreements.
Consequently, under the Rule no employer, labor relations consultant, or
other independent contractor will have to report or keep records on any
activities engaged in prior to July 1 that are not presently subject to
reporting, or file the new Forms LM-10 or LM-20 (revised pursuant to the
Rule) for any purpose prior to July 1.
NOTE: THIS IS NOT INTENDED AS LEGAL ADVICE. BE SURE TO SEEK LEGAL ADVICE ON THIS MATTER BEFORE TAKING ANY ACTION!!!
Persuader Rule Webinar on 2/29 – Exclusively For CUE Members
I recently read an article written by former SHRM CEO Sue Meisinger entitled Seeking ‘Clear and Sensible’ Compliance Guidance in which she mentions a challenge facing every human resources professional in the United States today. That challenge is the struggle to keep with a veritable flood of new government rules and case law decisions that are changing long held and wee understood rules in many areas of HR.
In her article, Ms. Meisinger mentions three major changes instituted by the NLRB, an agency every CUE member follows closely. She mentions GC 15-04 Report of the General Counsel Concerning Employer Rules, the new NLRB representation election rules, and the decision in the Browning v.Ferris Industries case as being especially problematic for employers.
It is no secret to anyone reading this that each one of these issues taken by themselves are extremely complicated, and require a great deal of work by human resources professionals in order to ensure that their companies are prepared and in compliance with the new rules and regulations. Many HR practitioner work with their labor attorneys, internal or external to ensure that they are covering all the compliance bases.
Any day, we are likely to see yet another agency regulation issued that will make talking to your attorney about important HR issues a lot more difficult. The Department of Labor has moved ahead with their proposed “persuader rules” which were first issued in 2011. The proposed changes would broaden the scope of reportable activities by substantially narrowing the interpretation of the “advice exemption” in Section 203(c) of the LMRDA which has been observed for many years.
It is not known what the final regulations will look like at this point, but they are likely to have an impact on the ability of employers to seek advice from their labor counsel or consultants related to union activity by requiring a much more detailed reporting of persuader agreements.
In her article, Ms. Meisinger predicts “that the new reporting requirements will lead to new uncertainty.”
It’s important to remember that this rule isn’t a reason for an an employer to panic, or to feel that you will have to stop your efforts at building and maintaining a positive workplace relationship with your employees.
The business case for doing so will still be there. Organizations like the American Bar Association, the Chamber of Commerce and SHRM are doing what they can to influence what the final rules will look like. Even the Attorneys General in several states have weighed in on the potential impact the new rules could have on small business.
There a lot of things we don’t know about what the final rules will look like, but there is one thing we know for certain. Employers need to start preparing for the new regulations as much as possible right now, and you need to do based on the worst case scenario – which means preparing for the rules as initially proposed back in 2011.
As always, CUE is here to help our members with preparing for this new labor reporting requirement and any changes you may need to make in your labor and employee relations planning efforts.
Persuader Rule Webinar – Exclusively For CUE Members
It’s been 3 years since most of us have even thought about this, but here we are. The Persuader Rule is back, and we have CUE experts ready to help you prepare with a webinar on February 29th featuring Phil Wilson of LRI and LLAC attorney Doug Seaton.
In this webinar, Phil and Doug will review the current reporting requirements; introduce the proposed rule changes; discuss the impact of these changes on your company; and lay out what employers should be doing now. This webinar will be open only to CUE member companies.
Spring 2016 CUE Conference – Don’t forget to register!
We’ll be covering the latest on the persuader rules, joint employer issues and many other topics at the CUE conference in Orlando May 15-17th. Registration is open and is taking off with 100+ registrations so far. We have a stellar line up and are excited to announce that the conference schedule is now posted. You may view the first tentative schedule here.
Be sure to register early to get a room at the Hilton Orlando Lake Buena Vista, which is directly across the street from the Disney Springs entertainment area. The size of the room block is limited, so reserve your space now.
As I’m sure you aware by now, the Department of Labor (DOL) surprised a lot of people earlier this week when they sent the long-delayed persuader rules to the Office of Management and Budget (OMB, thereby indicating their intent to implement some version of the new rules in March 2016. The new rules would require employers to report more details on some provisions of their labor relations.
As first mentioned here when the story broke a few days ago on Politico Morning Shift when the Labor Department sent its long-delayed “persuader rule” to the Office of Management and Budget, according to several people familiar with the matter, including a senior administration official meaning that the proposed regulation has moved one step closer to implementation.
A key provision in the final rule would narrow the range of activities exempt from public disclosure under the Labor Department’s “advice exception.” …
But the Labor Department concluded in 2011 that its “advice exception” might be overbroad, noting that “the consultant may have devised and orchestrated certain, or even all, aspects of activities with a direct or indirect object to persuade employees about their rights to organize and bargain collectively.” OMB review is a key prerequisite for finalizing the rule. In its unified agenda released last month, the Labor Department said it hoped to finalize the regulation by March.
We’ve placed some additional links containing more details on the rules changes and how they could potentially impact employers in the CUE Weekly newsletter which is going out today, but here are some highlights from those resources for anyone who doesn’t receive the newsletter, but wants to learn more.
From the Littler Labor Blog:
This broad interpretation would have a drastic impact on the confidential nature of the attorney/client relationship, as it would expand the types of union-related activities that would trigger reporting requirements from both employers and law firms. Small employers would be at a particular disadvantage, as they often lack in-house counsel to assist with the LMRDA’s reporting requirements.
From Labor Relations Today, regarding possible legal challenges to the new rules:
Not surprisingly, the final rule is not without its critics, and there has been some speculation that DOL has taken its time in order to bolster the rule against potential legal challenges. Specifically, critics claim that the proposed rule is improper because it effectively writes the advice exception out of the statute. Moreover, the American Bar Association and the Association of Corporate Counsel assert that the proposed rule is also inconsistent with the rules of professional conduct pertaining to lawyer-client confidentiality. They and others believe that the proposed rule forces lawyers to disclose privileged attorney-client information and that it will discourage employers from seeking legal assistance during union organizing campaigns.
Opponents also claim the new persuader rule will place enhanced burdens on employers to comply, and they take exception to the DOL’s estimate that compliance with the rule will only cost all employers and their lawyers about $826,000 a year. Indeed, others project the increased burden from the narrowing of the “advice exception” to cost employers over $200 million a year, with a former chief economist at the DOL estimating that the new rules will cost approximately $60 billion over a 10 year period.
At the moment, it is unclear what the final rules will look like, but we have already started discussions with CUE experts about developing guidance for CUE members based upon what is known. We’ll have more information on this in the coming weeks here on the blog and via direct communication with members to assist you in preparing for these changes, if they are implemented.