July 1 Marks Persuader Rule Compliance Date

July 1 marks the deadline when employers and consultants must comply with the Department of Labor’s (DOL) new “Persuader Rule.”

July 1 marks the deadline when employers and consultants must comply with the Department of Labor’s (DOL) new “Persuader Rule.”

The DOL in March issued a final Persuader Rule that limits the so-called "advice exemption" in the DOL's Persuader Rule. The rule requires employers and the experts they hire to disclose any arrangements where an expert is hired to communicate directly with employees about their decision to unionize. 

If the experts do not communicate directly with employees, but are simply providing "advice" to the employer about how to effectively/legally communicate with employees, this has been exempt from disclosure requirements.

The final rule narrows the scope of the "advice" exemption so that far more interactions between employers and hired experts providing advice on employee or labor relations will be subject to disclosure requirements.

New reporting obligations in the final rule apply only to agreements or arrangements that employers and consultants enter into on or after July 1. The expanded reporting requirements do not apply for any agreements or arrangements entered into prior to July 1, even if the services are provided and/or paid for after July 1.

The rule is being challenged in at least three separate pending federal lawsuits, including one brought by the Coalition for a Democratic Workplace (CDW), of which NATSO is a member. Many in the employer and legal community fear that employers will no longer have access to routine legal counsel or expert advice on employee relations, human resources or employee benefits because of the excessive costs associated with such disclosure.

A Texas court on June 20 heard arguments from the Chamber of Commerce on why it should enjoin enforcement of the Labor Department’s “Persuader Rule” while the lawsuit is pending.

Several elected officials also have introduced legislation seeking to nullify the controversial rule. Most recently, Senators Jeff Flake (R-Ariz.) and Lamar Alexander (R-Tenn.) on June 9 introduced S.J.Res. 35, a resolution that would prohibit implementation of the final persuader rule. CDW plans to send a letter of support to the Senators. CDW also supported similar legislation in the House, H.J. Res 87, introduced by Rep. Bradley Byrne (R-Ala.) in April. That bill currently has 46 cosponsors.



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