Labor Union Activity

DOL Persuader Rule and interpreting the July 1 deadline

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We’ve received reports that some law firms are reaching out to auto dealers to sign them up for representation due to a July 1, 2016 deadline under the United State’s Department of Labor’s (DOL) March 24 “Persuader Rule.” This will help you interpret what this is all about.

Union persuader consultants are individuals who employers hire to communicate with employees about union organizing activities, generally in the context of attempting to persuade employees to vote against electing union representation. Under the Labor-Management Reporting and Disclosure Act (LMRDA), persuaders and employers using persuader services are required to publicly report: the terms and conditions of the agreement or arrangement entered into between the employer and the consultant, the consultant's "receipts of any kind from employers on account of labor relations advice or services, designating the sources thereof," and the consultant's "disbursements of any kind, in connection with such services and the purposes thereof.” Now, the DOL is expanding the definition of persuader services triggering these reporting requirements. Specifically, now reportable “persuader” activities include services provided by consultants and attorneys for employers regarding labor unions, even beyond direct communications with employees. Such newly covered services include the drafting of union-avoidance communications by the employer, training of supervisors/management about unions, and developing or implementing certain policies pertaining to union activity. As such, the employer and the attorneys/consultants who provide the services under this expanded definition will now be required to comply with these reporting requirements.

The new final rule is applicable only to arrangements/agreements and to payments made on or after July 1, 2016. Therefore, if you enter into a contract for these additional covered services prior to that date, there is arguably no obligation to report the terms and conditions of the services contract under the expanded standards of the new rules, but only under the existing rules. These new rules are currently being challenged in other jurisdictions, but the outcome is unknown. If you contemplate potential future union activity or union-organizing efforts at your auto dealerships, you may want to speak to a knowledgeable auto dealer labor and employment attorney and consider the effects of entering into an agreement for such services before July 1.