U.S. Department of Labor Rescinds 2016 Persuader Rule

For several years now we have been tracking the controversial 2016 Persuader Rule, which would have expanded the reporting requirements for employers and consultants when consultants provided indirect advice to employers to persuade employees, one way or another, on organizing and bargaining issues, including how much was spent on this service. Under this Obama-era rule, employers and consultants would have been required to report activities like: planning or conducting employee meetings; training supervisors or employer representatives to conduct meetings; coordinating or directing the activities of supervisors or employer representatives; establishing or facilitating employee committees; drafting, revising or providing speeches; developing employer personnel policies designed to persuade employees; and identifying employees for disciplinary action.

But as we previously reported the 2016 Persuader Rule was met with strong resistance. On November 16, 2016, the U.S. District Court for the Northern District of Texas converted a temporary injunction to a permanent injunction, which prevented the U.S. Department of Labor (DOL) from enforcing the 2016 Persuader Rule in that jurisdiction. In reaching this decision, the court held the 2016 Persuader Rule was inconsistent with the Labor-Management Reporting and Disclosure Act (LMRDA) and was unlawful. The DOL then issued a proposed rulemaking to withdraw the 2016 Persuader Rule in June 2017, and the Rule was recently rescinded by the DOL on July 17, 2018. In its News Release, the DOL stated the 2016 Persuader Rule “exceeded the authority of the LMRDA” and “impinged on attorney-client privilege by requiring confidential information to be part of disclosures.”

It is important to note that employers, law firms and consultants still must disclose the existence of “persuader agreements” on DOL forms LM-10 (Employer Report) and LM-20 (Agreement and Activities Report), respectively. More specifically, covered entities are required to report arrangements with “persuaders” hired to communicate directly with employees. Covered entities 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.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employments matters for over sixty years and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.

Learn more aboutDaniel G. Fritz
Dan represents clients in employment discrimination claims and works on behalf of management to investigate and respond to claims brought before administrative agencies. He also counsels clients on personnel policies, employment contracts, severance agreements, non-compete agreements, employee handbooks, and similar matters.