Employers Brace for Reporting Requirements Under Labor Management Reporting and Disclosure Act

Proposed U.S. Department of Labor (“DOL”) revisions to the “advice exemption” of the Labor Management Reporting and Disclosure Act, 29 U.S.C.A. § 401, et seq. (“LMRDA”), soon may require employers, consultants and law firms to publicly report and disclose private, confidential agreements protected by the attorney-client privilege regarding union organizing, collective bargaining, strikes and employee concerted activities.

Currently, pursuant to Section 203(c) of the LMRDA, employers, law firms and consultants are required to disclose the existence of “persuader agreements” on DOL forms LM-10 (Employer Report) and LM-20 (Agreement and Activities Report), respectively.  Covered entities are required to report arrangements with “persuaders” hired to communicate directly with employees.  Covered entities currently are not required to report “advice” received from a consultant or law firm that has no direct contact with employees.  Activities qualifying for the advice exemption include legal advice related to employer speeches and materials created during organizing campaigns, collective bargaining and strikes; training managers regarding avoiding unfair labor practices in communicating with employees; and helping to prepare or review written company policies to ensure compliance with applicable labor laws.

In November 2013, the DOL is expected to issue final regulations which may significantly expand reporting requirements under the LMRDA.  In June 2011, the DOL issued a Notice of Proposed Rulemaking substantially limiting the activities that qualify for the LMRDA’s advice exemption.  The proposed new interpretation includes examples of activities that may no longer be considered “advice”, including providing persuader material to employers for distribution to employees; drafting or reviewing speeches for employers; coordinating or directing the activities of employees or supervisors engaging in the persuasion of employees; and drafting or implementing policies for the employer with the objective of persuading employees. Clearly, these activities extend far beyond direct contact with employees.

Under the Proposed Rules, no report will be required concerning an agreement or arrangement to exclusively provide legal advice to an employer, such as when a consultant exclusively counsels employer representatives on what they may lawfully say to employees, ensures a client’s compliance with the law, or provides guidance on NLRB practice or precedent.

McMahon Berger will update this legal blog with more detail when the final regulations are issued by DOL.  In the mean time, if you have questions or comments regarding the advice exemption to the LMRDA, or need advice regarding potential implications of revisions to the exemption, please contact our St. Louis Labor and Employment law firm at (314) 567-7350.