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New Persuader Rules Issued!

They’re finally here:  the DOL’s new persuader rules have been published in the Federal Register and – at first glance – they look pretty bad.  The DOL watered down their proposed rules just a lil’ bit, and even provided a small set of different rules to allow trade associations to engage in certain activity without triggering any reporting requirements, but overall the rules will be a game-changer for most employers.

discussionI’m currently going through the rules with a fine tooth comb (the rules are either 129 or 446 pages long, depending on whether you read the version with small print or the one with a larger font and double spacing).  In a nutshell, the new persuader rule will no longer accept the “accept or reject” test for the “advice” exception.  As a result, persuaders and employers will be required to file a report for “indirect” persuader activities, which could include the following:

  • Planning, directing, or coordinating supervisors or managers;
  • Providing persuader materials;
  • Conducting seminars; and
  • Developing or implementing personnel policies or actions.

It appears trade associations are exempt from the reporting requirements if they (1) host a counter-organizing seminar but bring in outside speakers or (2) simply provide “off the shelf” materials to an employer for a union campaign.  To get a firmer grasp on how these new rules will affect organizations like the Hawaii Employers Council (“HEC”), however, I need to read through the rules and examine them in more detail.

For anybody who wants to read up on the rules, you can view the following:

In addition, HEC will be providing a seminar on May 11, 2016 that will provide an overview of the new rules, a discussion of how the new rule will impact employers, instructions on how to fill out the LM-10 form for employers, and a review of some of the legal challenges that have arisen against these new rules.  That seminar will be available to HEC members only, and on a first-come-first-served basis.

Finally, once I have a chance to read through all the rules, I’ll prepare and send out an article summarizing the new rule – which will also be available only to HEC members.

DOL’s Controversial Persuader Rules One Step Closer to Becoming Final

To quote the controversial Marshall Mathers, otherwise known as Eminem:

Guess who’s back, back again?
The DOL’s back, with a friend.
Guess who’s back, guess who’s back,
Guess who’s back, guess who’s back.
Guess who’s back, guess who’s back.
Du nana.

Much to the surprise of many employers, the DOL recently submitted their proposed new rules regarding what constitutes “persuader” activity for the purposes of the Labor Management Reporting and Disclosure Act (“LMRDA”) to the Office of Management and Budget (“OMB”).  This move by the DOL is significant (and alarming) because submission of a proposed rule to the OMB is the final step before the DOL can publish its final rule in the Federal Register.  The DOL currently has a target date of March 2016 for publication of its final rule.  In other words, the new persuader rules could become a reality in just three short months (or even less).

The proposed persuader rules have been rather dormant since 2011, when introduction of the rules sparked major controversy and the American Bar Association strongly opposed the rules because they could potentially violate the sanctity of the attorney-client privilege.  This latest move by the DOL, however, means that the rules could take effect despite the objections of the ABA.

The proposal issued by the DOL would expand the scope of an employer’s reporting requirements under the LMRDA.  Currently, the LMRDA contains an exemption for where an employer receives “advice” from an attorney or consultant, but the attorney or consultant does not have direct contact with any employees.  Under the proposed rule, “persuader activity” would  be expanded to include “material or communications to, or engaging in other actions, conduct, or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively.  Reporting is thus required in any case in which the agreement or arrangement, in whole or in part, calls for the consultant to engage in persuader activities, regardless of whether or not advice is also given.”   This broad definition of “persuader activity” would severely narrow the “advice” exemption as we currently know it.  For instance, the DOL has provided the following examples of what would constitute persuader activity:

  • Drafting, revising, or providing a persuader speech, written material , website content; audiovisual or multimedia presentation, or other material or communication of any sort to an employer for presentation, dissemination, or distribution to employees, directly or indirectly;
  • Planning or conducting individual or group meetings designed to persuade employees;
  • Developing or administering employee attitude surveys concerning union awareness, sympathy, or proneness;
  • Training supervisors or employer representatives to conduct individual or group meetings designed to persuade employees;
  • Coordinating or directing the activities of supervisors or employer representatives to engage in the persuasion of employees;
  • Establishing or facilitating employee committees;
  • Deciding which employees to target for persuader activity or disciplinary action;
  • Coordinating the timing and sequencing or persuader tactics and strategies.

The DOL also stated that reportable agreements or arrangements include those in which a consultant plans or orchestrates a campaign or program to avoid or counter a union organizing efforts, such as through the specific activities listed above.  Additionally, such efforts could also include drafting or implementing policies for an employer that has the effect of directly or indirectly persuading employees.

Any employer who enters into an agreement with an outside party – such as an attorney or consultant – to provide “persuader activity” would be required to file Form LM-10 with the DOL.  Failure to comply with the LMRDA’s reporting requirements could technically result in a $10,000 fine and imprisonment for up to one year.

South Carolina Federal Court Strikes Down NLRB Posting Rule

In a highly anticipated decision – in Chamber of Commerce v. NLRB the U.S. District Court for the District of South Carolina, Charleston Division, struck down the new NLRB rule that requires employers to post an NLRB poster (that informs employees of their rights under the National Labor Relations Act) in the workplace.  A copy of the court’s decision can be read here.

Over the past several months, the NLRB’s new posting requirement has been the subject of great controversy, and is currently set to take effect on April 30, 2012.  In light of this recent court decision, however, it will be interesting to see whether the NLRB postpones the posting requirement again.  The posting requirement had already been pushed back twice, pending legal challenges to the rule.

For the first legal challenge, on March 2, 2012, the U.S. District Court for the District of Columbia upheld the posting requirement, and ruled that the NLRB had “broad authority” to issue rules.  Accordingly, although the plaintiffs in that case appealed the court’s decision, it appeared that the new posting requirement would still take effect on April 30, 2012.

In the second legal challenge (discussed in this blog entry) the court in Chamber v. NLRB reached the opposite conclusion and invalidated the NLRB’s new posting rule.  In reaching its decision, the court noted that the Board’s authority was limited to what is necessary to carry out the provisions of the NLRA.  The court then concluded that the NLRB posting requirement was not necessary, but rather “simply useful,”  to carry out the provisions of the NLRA.  The court further explained that the role of the NLRB is to be reactive as opposed to proactive in relation to employees covered by the Act.  On this issue, the court noted that the NLRB’s posting requirement “proactively dictates employer conduct prior to the filing of any petition or charge, and such a rule is inconsistent with the Board’s reactive role under the Act.”

This ruling is good news for employers.  The fact that this decision came out of South Carolina is not entirely surprising, because South Carolina is a largely Republican state and was in the center of the dispute between the NLRB and Boeing, Inc.

In any event, the next step is to wait and see what happens with the April 30, 2012 deadline…

NLRB To Speed Up Representation Election Process

In a move that is being praised by the AFL-CIO and criticized by the United States Chamber of Commerce, the National Labor Relations Board (“NLRB”) recently released its proposed amendments to the rules governing the process that is used for unionization elections.

In a press release issued earlier this week, the NLRB stated that the “proposed amendments are intended to reduce unnecessary litigation, streamline pre-and post-election procedures, and facilitate the use of electronic communications and document filing.”  A review of the proposed amendments, however, indicate that these amendments will make it easier for organized labor to unionize workforces, because unions will get more information about employees sooner, elections will be conducted quicker than before, and employers will essentially be prevented from having sufficient time to express their views during a representation election campaign.  Therefore, it comes as no surprise that the AFL-CIO is excited about these changes, whereas the Chamber of Commerce is displeased.

The NLRB is accepting comments from the public until August 20, 2011.  Comments about the proposed amendments may be submitted online here.

You can read the NLRB’s Fact Sheet on the proposed amendments here, and a redlined version of the rules outlining the changes here.

2009 Hawaii Legislative Wrap-Up

The 2009 legislative session resulted in some bad bills for Hawaii employers. Three bills of particular significance are:

Card Check Certification – This bill amends the Hawaii Labor Relations Act to allow unions to become the exclusive bargaining representative of agricultural employees without going through a secret ballot election. Rather, if the union obtains signed authorization cards from a majority of the employees, the employer will be required to recognize the union as the exclusive bargaining representative of the employees.

This bill applies only to employees in the agricultural field and to employers with annual gross revenues of $5 million or more. All other employers are still covered by the National Labor Relations Act, which currently still requires a secret ballot election to certify a union. However, employers should be aware that the federal Employee Free Choice Act (“EFCA”) which is similar to the Hawaii card check bill is still pending at the Congressional level. For more information on the EFCA, please refer to this post.

Credit History Discrimination - This bill makes it unlawful for an employer to discriminate against an employee or job applicant because of a “credit history or credit report,” unless the credit history or credit report relates to a bona fide occupational qualification (“BFOQ.”) In addition (and similar to Hawaii’s law on arrest and conviction record discrimination), an employer would be prohibited from making any inquiry into an individual’s credit history or obtaining a credit report until after a conditional offer of employment has first been made, and the conditional offer of employment may be withdrawn only if information in the credit history or credit report relates to a BFOQ.

Disputed Workers Compensation Claims - This bill would require employers to continue to provide individuals on workers’ compensation leave with “essential” medical services even if compensability is denied, or a dispute arises as to whether medical services are reasonable and necessary, until the Hawaii State Director of the DLIR conducts a hearing and determines that medical services should end.

Governor Linda Lingle has until June 30, 2009 to veto these bills, or they will become law.

One bit of good news (or relief):

There is one silver lining from the 2009 Hawaii legislative session: the “successorship bill” which would have required successor employers to hire 100% of the employees of a company they were assuming, was not passed. It appeared to have support by the Legislators throughout the 2009 legislative session, but fortunately, it lost steam and died during conference.