Employment Law Report
Effective Date of Persuader Rule Affects Employers’ Decisions to Retain Advisors
The United States Department of Labor’s (“DOL”) “persuader rule,” which requires employers and their advisors (including employers’ attorneys) to disclose publicly any advice that directly or indirectly persuades employees regarding union organizing or collective bargaining activity, took effect on April 25, 2016. Litigation is pending to enjoin the enforcement of the rule because the broad sweep of the persuader rule now requires public reporting of what had been previously exempted services that are often provided by labor lawyers and consultants to their clients in confidence. Examples of such activities include providing material or communications to employers for dissemination to employees; conducting union avoidance training; and developing personnel policies or practices that are intended to influence or persuade employees regarding their rights to engage in union organizing activities or other activity protected by the National Labor Relations Act.
It is important to note that the persuader rule applies only to persuader arrangements and agreements made on or after July 1, 2016. In one of the pending cases to enjoin the enforcement of the persuader rule, the DOL filed a status report taking the position that advice given pursuant to arrangements or agreements made before July 1, 2016 is not subject to the persuader rule. The DOL stated: “While the effective date of the [persuader] 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….The [DOL] 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, employers should immediately consider whether to enter into agreements with anyone who provides them legal or consulting services regarding employees’ union organizing activities or other concerted activity governed by the National Labor Relations Act. If you have any questions about the persuader rule, including questions about entering into an agreement with your counsel, please contact one of your Wyatt employment team members.