Manufacturers should take note of two recent developments in the human resources world. One expected. The other not.
Frequent readers of this blog may recall that in January I predicted the United States Department of Labor (“DOL”) would make good on its goal of updating the “Persuader Rule.”
By way of background, the Persuader Rule interprets the 1959 Labor-Management Reporting and Disclosure Act (“LMRDA”). That law mandated that unions and employers file certain annual disclosures. When a manufacturer hires a third-party to directly persuade its employees, or to offer alternatives to a union’s promise of benefits, both the manufacturer and the third-party have to file an annual disclosure reporting the services provided and the amount paid for those services. Soon after its adoption, however, the DOL adopted a Rule exempting from these reporting and disclosure requirements “advice and counsel” provided by consultants, so long as those third-parties did not directly advocate or “persuade” employees. That interpretation remained “on the books” for over forty years. Broadly speaking, employers could lawfully hire consultants (usually law firms) to provide purely advice and counsel to assist those manufacturers in lawfully opposing a union’s efforts to organize workers. So long as the consultant did not directly advocate employees against unionization, the contractual arrangements did not have to be disclosed.
Organized labor has long objection to this blanket exemption – believing that workers are entitled to know how much their employer was spending for such third-party consultants.
In March 2016, the last year of the Obama Administration, the DOL finally published the revised Rule. Effective April 25 and applying to any arrangement entered into on or after July 1, 2016, the new rule requires both manufacturers and their consultants to disclose all financial arrangements directly or indirectly impacting on advice as to how to stay “union free.” Almost immediately following the publication of the Rule at least three separate lawsuits were filed by employer associations and their law firms seeking to prevent its implementation. If implemented in its present form, the broadly written Rule will require law firms and their client manufacturers to meet the reporting and disclosure requirements under a host of circumstances. For example, law firms and their clients must comply if the law firm (1) prepares an employment handbook where any aspect of the handbook is intended or used to advocate that employees remain “union free,” (2) provides labor compliance training to supervisors and managers, (3) reviews employee communications for legal compliance, and (4) reviews and edits materials to be used in a union organizing campaign.
Read the Rule here.
Of course, we will be monitoring the progress of these cases.
The second development was far less predictable. In March, the Second Circuit Court of Appeals issued a surprising decision, holding that an individual human resources manager could be held personally liable for a violation of the federal Family and Medical Leave Act. Read R+C’s Client Alert here. While individual HR managers could previously be held personally liable for intentional discrimination and retaliation under applicable laws, holding individuals liable under the FMLA opens an entire new area of concern. Unlike most laws prohibiting intentional discrimination and retaliation, the FMLA in essence is a “no fault” statute – meaning a “discriminatory” or “evil” intent is not required to impose liability. Given the complexity of assessing an employee’s medical issues, often two reasonable people can look at the same set of facts and reach (in good faith) different answers. HR managers making these difficult choices must now do so in the backdrop of possible personal liability.
Whether read separately or together, these two significant developments reinforce Bob Dylan’s epic lyrics, “The Times they are a Changin.’”