Client Alerts / 06.08.2017

DOL Rescinds Obama-Era Persuader Rule

By Alex E. Jones

In May 2017, Secretary of Labor, Alexander Acosta, published an op-ed in the Wall Street Journal announcing that the Department of Labor (“DOL”) planned to rescind certain Obama-era regulations. Specifically, the current administration intends to rescind the so-called Persuader Rule, which broadened disclosure requirements for attorneys assisting businesses with unions.

By way of background, the Labor-Management Reporting and Disclosure Act (LMRDA) requires  employers and labor relations consultants (including attorneys) to report to the DOL any agreement or arrangement  whereby such labor relations consultant/attorney persuades, directly or indirectly, employees to exercise or not exercise the right to organize and bargain collectively.

Traditionally (since 1962), the rule was interpreted as requiring such parties to report direct communications between employees and labor relations consultants/attorneys. However, communications between an employer and labor relations consultants/attorneys were generally exempt from the disclosure requirements under what is referred to as the “advice exception.”

In March 2016, the DOL (under the Obama administration) announced a revised persuader rule that altered this interpretation. Under the revised rule, the “advice exception” was narrowed, thus, broadening the scope of disclosures employers and their labor relations consultants/attorneys were required to make.

The new rule was immediately challenged, in part, because it would require the reporting of information that was protected by the attorney-client privilege. In November 2016, the Northern District of Texas issued a permanent injunction, preventing the law from going into effect. The Obama administration appealed the ruling, but appeal efforts have subsided under the Trump Administration.

The DOL has now made it clear that it intends to roll back the Persuader Rule. Before it can do so, however, the new rule will have to go through the rulemaking process, including a notice and comment period.

For additional questions or assistance with this matter, please contact Rob S. Gilmore or Alan M. Rauss.