New Pro Union Regulations Announced

June 21, 2011
Legal Updates

Today the NLRB announced proposed rule changes designed to dramatically reduce the time employers have to respond to union organizing. Yesterday the Department of Labor proposed regulations designed to make it more difficult for employers to respond to union organizing. The objective?  More help to unions.

Ambush Elections. Under current rules, most elections to determine if employees want a union occur approximately 42 days after the union files an election petition.  This 42 day period gives employees a chance to hear "the rest of the story" regarding what it means to give up their right to speak for themselves to a union.  Prior to a union filing a petition for an NLRB election, most employees have only heard the union's sales pitch.   

The effect (and purpose) of the proposed new rules is to reduce as much as possible this educational period.  The proposed new rules do not set a fixed time frame within which to hold elections, but on first reading it appears they would result in elections being held in perhaps 10 days of a union asking for the election.  In any event, the time frame will certainly be much shorter than it is now.   

Added to this, the new rules would require employers to promptly turn over to the union all voting employees' names, street addresses, and work e-mail addresses. These new rules are not final.  There will be a 75 day comment period, but we anticipate the proposed rules, or rules very similar to the proposed rules, will be in effect by the end of the year.

Chilling Reporting Requirements. Yesterday the Department of Labor proposed regulations that would overturn a 50 year-old common-sense interpretation of federal law and subject employers and their advisors to criminal penalties. The proposed DOL regulations would chill employers' ability to communicate the truth about unions in whatever time is available before employees vote.

Under the law as it has been understood for decades, if an employer pays a consultant to talk directly with its employees about the dangers of turning over control of the workplace to unions, the contract with the consultant must be reported to the DOL.  The idea is to make available to the union and the employees how much the company is willing to spend on "hired guns" to keep the union out.  But an exception to the reporting requirement has been consistently interpreted to mean that no disclosure is required if the consultant or labor lawyer gives advice on strategy, drafts speeches, handouts or scripts for the employer to deliver to employees, or offers seminars about how to effectively communicate a union-free message to employees.

Background.  In 1959, Congress passed the Labor Management Reporting and Disclosure Act ("LMRDA").  Of course, the law was primarily aimed at union corruption in the form of vote buying, payoffs, and waste and misuse of union members' dues money.  The law required the filing of annual reports by unions about union leaders' salaries and expense accounts, and the other ways that union dues were spent.  To achieve bi-partisan support, the law also required reports by employers about their agreements with consultants who engaged in "persuader activity."  The law makes failure to report a criminal offense.

The LMRDA specifically recognizes that advice from an attorney - even advice that includes drafting of information for the employer to share with employees, training of supervisors, etc. - is privileged and therefore "off limits" to the reporting obligation.   The very practical interpretation of the law, universally understood for decades, is that so long as the consultant or attorney does not engage in direct persuader activity by personally communicating to rank and file employees, there is no reporting obligation.

Proposed DOL Regulations. The DOL regulations published yesterday for public comment completely ignore the union corruption side of the LMRDA and focus only on the aspect of the law that is designed to chill employers' rights to seek help in avoiding unions.  Relying on such things as comments from academics who label labor relations consultants "mercenaries," the administration says that the law has been misinterpreted for over 50 years, and reads the "advice exception" right out of the rule.  The explanation that accompanies the proposed new reporting obligations states as follows:

"Seminars, webinars, or conferences offered by lawyers or labor consultants to employers and their representatives must be reported. During such events, guidance is offered to attendees, who represent multiple employers on labor-management relations matters, including how to persuade employees concerning their organizing and bargaining rights. In general, to the extent that these meetings involve actions, conduct, or communications that have a direct or indirect object to persuade employees concerning their representation or collective bargaining rights, then the consultant and employer would be required to file the necessary reports…. For example, if persuader materials, which are intended for presentation, dissemination, or distribution to employees, are provided to employers at such events, then reporting is triggered. Additionally, if, at such events, consultants train supervisors to conduct individual or group employee meetings, then reporting is also triggered. These examples reflect actions, conduct, and communications that have an object to persuade employees. The Department generally views so-called 'union-avoidance' seminars and conferences offered by lawyers or labor consultants to employers to involve reportable persuader activity.

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NOTE: If the agreement or arrangement provides for any reportable activity, the exemptions do not apply and information must be reported for the entire agreement or arrangement."

Employers Can Offer Comments

The regulations are not final until after the public has had a 60-day opportunity for comment.  Our comments are as follows.  When a law threatens criminal sanctions, due process requires that it be crystal clear about what is illegal, and what is not.  The LMRDA, as passed more than half a century ago, exempts advice and attorney-client communication.  The law has been interpreted consistently to draw a common sense and easily understood distinction between persuader activity and advice.  The administration's partisan reinterpretation is perhaps not surprising in the context of its other efforts to help unions, such as the NLRB's attack on Boeing's right to relocate, the end run around Congress in order to place on the NLRB union lawyers who cannot secure Congressional approval, etc.  But there is no justification for ignoring 50 years of consistent interpretation to impose yet more extensive and expensive red tape on U.S. business.

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