Department of Labor Provides Limited Opportunity to Obtain Advice Without Triggering the New "Persuader Rule"

The Department of Labor’s recently-issued Final Rule, 81 Fed. Reg. 15924 (the “Persuader Rule”) imposes upon employers and their advisors (including lawyers and consultants), for the first time, the obligation to file public reports with the DOL disclosing any advice that “indirectly persuades” employees regarding union organizing or collective bargaining.1  Prior to the Persuader Rule, such reports were required only when an advisor made direct contact with the employer’s employees, regardless of the persuasive purpose of the advice.  The published rule provides that it will become effective on April 25, 2016, and apply only to “persuader” arrangements and agreements, as well as payments (including reimbursed expenses) made on or after July 1, 2016.

Shortly after the Persuader Rule's publication, several associations and other entities filed three lawsuits against the DOL, seeking to enjoin the rule.2  During the course of this litigation process, the DOL clarified that the rule will not apply to any agreement between an employer and an advisor entered into before July 1, 2016, in which the advisor agrees to provide “persuader” services on or after July 1, 2016, as long as those persuader services would not have otherwise triggered reporting obligations prior to the issuance of the new rule.  In light of this clarification from the DOL, employers should consult immediately with anyone who provides them with labor and employment law services, including legal counsel and consultants, regarding potentially entering into such agreements prior to July 1, 2016

As with any new federal government regulation, there remains significant uncertainty about the Persuader Rule.  Therefore, it is anticipated that subsequent events will offer further information about, and clarification of, the Persuader Rule, including the DOL's current position regarding the July 1, 2016 enforcement date.  Littler will provide further updates and analysis whenever significant developments concerning this important issue occur.

If you have any questions about these developments, including about possibly entering into an agreement prior to July 1, 2016 please contact your Littler Attorney.

See Footnotes

1 See Michael J. Lotito, Maury Baskin, and Michael G. Pedhirney, Department of Labor Issues Long-Awaited “Persuader Activity” Final Rule, Littler Insight (Mar. 24, 2016).  On March 24, 2016, the DOL issued the Persuader Rule regarding its interpretation of the Labor-Management Reporting and Disclosure Act’s (“LMRDA”) “advice” exemption.  

2 Littler is representing the plaintiffs in one of the three law suits.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.