Update: On June 27, 2016 a federal district court in Texas issued a nationwide injunction against the Department of Labor’s new “Persuader” rules. The injunction prevents the DOL from enforcing its new rules pending final review by that court, or a higher court. Until that happens, it remains advisable to enter into an engagement agreement before July 1, 2016 should the new rules be reinstated down the line.
As we reported to you in our April 2016 Employment Law Note, the U. S. Department of Labor (DOL) finalized new regulations that will require employers and consultants to report and disclose direct or indirect communications that had an object to persuade employees with regard to union organizing, including what was formerly considered exempt “advice” under the law. The new persuader rule would require employers and advisors (including consultants, lawyers, and law firms) to report standard labor relations advice and services (which formerly were exempt within the LMRDA’s “advice exemption”) that they provide to employers which can have the effect of influencing employees during union organizing drives. Reports and fees filed by employers, consultants, lawyers and law firms would be subject to public disclosure, and could be used as an organizing tool by a labor union targeting an employer’s workforce. The implementation date for administration and enforcement of the new regulations is July 1, 2016. Though there are several lawsuits pending challenging the new rules, employers, consultants and law firms must proceed as if the rules will go into effect on July 1st.
Recently, the DOL issued guidance regarding the implementation of the new rule. According to the DOL, all engagements entered into before July 1, 2016— including long-term or multi-year agreements for labor relations services to be performed after July 1—will not be subject to the reporting and disclosure requirements of the new rule. Services for “direct” persuader activities previously reportable under the old rule will continue to be reportable.
Should an employer wish to shield the terms of its engagement with its labor relations consultant or law firm from public scrutiny, the employer should enter into the engagement before July 1, 2016. Accordingly, if you wish to beat the DOL deadline and engage SBJ in this regard, please contact Matt Lynch (firstname.lastname@example.org), Judd Lees (email@example.com), or any SBJ attorney to request an engagement letter that will issue before July 1, 2016.