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Contractors, business community challenge DOL Persuader Rule

Leading up to the Department of Labor’s delay in issuing a new reporting rule that would change the long-standing interpretation of “advice” under federal labor law, the Associated Builders & Contractors relayed strong criticism of the proposed measure to Labor Secretary Thomas Perez. Joining 53 other employer organizations, ABC reiterated its strong opposition to proposal, while highlighting additional concerns.

If finalized, DOL’s rule will greatly restrict employers’ relationships with labor relations advisers. Communication that was previously considered advice would now carry onerous requirements for employers—most of whom are small businesses without in-house legal counsel—and third-party advisors, now considered “persuaders,” would be required to produce forms for each of their clients or potentially face criminal charges.

The letter criticized DOL’s plan to issue its final persuader rule ahead of a separate rulemaking, set for later this year, to make significant changes to Form LM-21. The signatory groups recommended that DOL not move forward with finalizing the persuader rule without first addressing the potentially significant changes to the LM-21, which employers must file when they pay a “persuader”—a third party who speaks directly to their employees about labor relations matters. The letter cautioned that failure to do so would demonstrate the agency’s lack of understanding of both rules’ employer impact.

The letter also addressed the persuader rule’s treatment of employers and trade associations that offer “seminars, webinars or conferences” that may trigger the proposed reporting requirements, pointing out that DOL did not include adequate compliance instructions. The inclusion of seminars, webinars and conferences in the proposed rule, coupled with the availability of content online, potentially subjects millions of individuals to new disclosure requirements without clear instructions on what exactly must be disclosed.

ABC and its members have long opposed the persuader rule because it eviscerates attorney-client privilege and infringes upon employers’ right to free speech, freedom of association, and legal counsel. By finalizing the rule, DOL would curtail employees’ rights to obtain balanced and informed input from both sides as they decide whether to be represented by a union. ABC also contends that the rule would also work hand-in-glove with the National Labor Relations Board’s “ambush” elections rulemaking, which hastens union elections and hands over personal employee data to union organizers.

In addition to Perez, the letter was also shared with White House staff, the Office of Information and Regulatory Affairs, the committees of jurisdiction on Capitol Hill and several states’ attorneys general.