Employment Law Report
Lawsuit Filed to Enjoin U.S. Department of Labor’s New Persuader Activity Rule
On March 30th, a group of plaintiffs consisting of several industry associations of employers and an Arkansas law firm filed an action in the U.S. District Court in Little Rock seeking an injunction to prevent the U.S. Department of Labor from implementing its new “persuader activity” rule. This rule, which is set to take effect on April 26th, would expand the types of activities which employers and labor relations consultants (including attorneys and industry groups) must report to the Department of Labor. Under the new rule, if a labor relations consultant performs any work for an employer which is intended even “indirectly” to persuade employees in their choice of whether or not to be represented by a labor union (including such activity as supervisor training, seminars for employers, and preparation of employment policies), then all activity of the consultant for that employer in the engagement must be reported, including any advice to the employer which is not itself intended to persuade employees. In addition, if the terms of the engagement are in writing, then that written document must be filed. Also, the financial terms of the engagement must be reported. This information would be filed in a public record accessible by anyone. Failure to comply with the rule is a criminal offense punishable by a fine of up to $10,000 and up to a year in jail.
The suit asks the court to declare the new rule unlawful on the basis that it violates the following: the First and Fifth Amendments to the U.S. Constitution, the federal Administrative Procedures Act and the National Labor Relations Act. In addition, it unlawfully infringes on rules protecting attorney/client confidentiality, and fails to take into account the regulatory impact the rule would have on small employers. Since the rule is set to take effect in slightly more than three weeks, the plaintiffs will certainly push to get at least a temporary decision from the court before then.
More suits seeking to enjoin the rule are likely to be filed shortly.