Persuader Rule Rescinded by Department of Labor

From OMA Connections Partner, Bricker & Eckler: “Earlier this week, the U.S. Department of Labor (DOL) rescinded the so-called “Persuader Rule”, issued in 2016.

“This rule required employers to report to the DOL the retention of law firms or consultants engaged to directly or indirectly persuade employees about exercising or refraining from exercising their right to organize and bargain collectively. This reporting requirement — a publicly available filing — meant employers’ strategies about union campaigns could become known to unions, employees, and anyone making a public records request. The reporting requirement also included the duty to report fees paid to firms and persuaders. In implementing this rule, the DOL relied on the Labor Management Reporting and Disclosure Act of 1959 (LMRDA), thus exposing companies to civil or criminal penalties for non-compliance.

“In November 2016, a federal district court in Texas blocked enforcement of the 2016 rule, finding it was incompatible with a longstanding doctrine known as the “advice exception” and jeopardizing the attorney-client privilege.

“Now, the DOL has rescinded the rule, acknowledging in a Twitter post on July 17 that “the 2016 Persuader Rule [ ] exceeded the authority of the Labor-Management Reporting and Disclosure Act.” The rescission will become effective on or about August 17, 2018, 30 days after publication in the Federal Register.”

Please direct any questions to Marie-Joëlle C. Khouzam, Bricker & Eckler LLP. 7/19/2018

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