On December 21, 2012, the Department of Labor (DOL), as well as all federal agencies, released its regulatory agenda and regulatory plan.  Included in the agenda is the DOL Office of Labor-Management Standards’ (OLMS) plan to revise the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) otherwise known as the “Persuader Activity” rule. The proposed revisions, at first blush, may not appear significant to most manufacturers, but please read on.

Many employers, when exposed to the possibility of union organizing activity, may consider consulting with counsel or consultants to prepare a union avoidance strategy or to simply get some questions answered about how to respond. The proposed revisions to the “Persuader Activity” rule could require employers to publicly report this type of activity – discussions with counsel and consultants about union organizing.

There is already a reporting element to the current law, LMRDA, but the DOL is proposing to expand the circumstances in which consultant services provided to an employer, which are used to inform employees about their rights to collective bargaining, have to be reported by both the consultant and the employer under the LMRDA. 76 Fed. Reg. 361788 (June 21, 2011). Currently, employers are only required to report any agreements or arrangements with a third party consultant when the purpose of such agreement or arrangement is to persuade employees as to their collective bargaining and organizing rights or to obtain certain information concerning the activities of employees or a labor organization in connection with a labor dispute. Importantly, the current requirement includes a reporting exemption for “advice” provided to an employer by a consultant or attorney. Neither an employer nor a consultant is currently required to file a report with the Department covering the services of a consultant if the consultant is merely giving or agreeing to give advice to the employer. This exemption preserves the right to counsel which is critical for employers unfamiliar with the complexity of labor laws.

Put simply, these revisions could have a significant “chilling” effect on employers and any third party consultant because they may dramatically expand the scope of “persuader” activities and narrow the “advice” exemption that has been in place for over 50 years. Small businesses that don’t have in-house counsel and may rely on expert advice to deal with union organizing campaigns and steer clear of unfair labor practices could be exposed to a greater risk. While the DOL has indicated that it has addressed the public concerns raised by these proposed revisions, it still is not clear whether reportable “persuader” activities could encompass virtually any activity in which a consultant engages that would directly or indirectly persuade workers concerning their rights to organize and bargain collectively, regardless of whether or not the consultant has direct contact with workers.

Further, the rule also proposed to enhance the requirements for mandatory electronic filing (Form LM-21) for reporting receipts and disbursements. Employers may therefore be required to report their own internal costs, including wages paid to the employer’s own managers and employees for “persuader” activities. Penalties for willfully failing to report “persuader” activities carry both civil and criminal penalties.

The reports are publicly available and it is expected that labor unions would use these reports against employers during their aggressive union organizing efforts. Indeed, this appears to be the DOL’s agenda, given this statement:

When workers have the necessary information about arrangements that have been made by their employer to persuade them whether or not to form, join, or assist a union, they are better able to make a more informed choice about representation.

This little rule may have an enormous impact on your business. Manufacturers should consider carefully monitoring the regulatory track of these proposed revisions.