For over 50 years, the United States Department of Labor’s (DOL) interpretation of the Labor Management Reporting and Disclosure Act of 1959 (LMRDA) has remained the same. Under the LMRDA’s “Advice Exemption,” an employer is not required to report its engagement of a consultant (including an attorney) to assist in responding to a union organizing campaign, as long as the consultant does not directly contact employees and the employer is free to reject the consultant’s recommendations. But this past March, the DOL published a final rule aimed at boosting union organizing campaigns. Under it, employers would be required to file a public report each time they hire a consultant to provide advice or services that persuade employees against unionization.

A federal court judge for the Northern District of Texas granted a preliminary injunction against the new rule on June 27, 2016. In November, the court issued a permanent injunction. The judge found that the new rule exceeds the DOL’s authority under LMRDA and “imposes content-based burdens on speech,” in violation of the First Amendment. Judge Cummings also noted the potential conflicts for attorneys with regard to “their longstanding ethical duty to maintain client confidentiality.” If the new rule is implemented and enforced, it is suspected that many lawyers will be forced to cease representing employers in union organization matters, thereby decreasing employers’ access to advice.

The DOL’s appeal of the preliminary injunction is ongoing; however, even if the DOL successfully defends the persuader rule in court, it is questionable how long the rule will survive under the incoming Secretary of Labor. Accordingly, employers may continue to seek and rely on the advice of attorneys without being subjected to reporting requirements, as long as the advice can be rejected and is not communicated directly to rank and file workers. Activities that typically fall within the “Advice Exemption” include an attorney’s preparation of materials for an employer’s use during union organizing, the training of managers and supervisors on unionization matters, and the development of personnel policies and practices.

Fishel Hass will continue to monitor the situation. For more information, contact FHKAD attorney Marc Fishel at mfishel@fishelhass.com.