The Persuader Rule has Arrived: A Must-Read for Employers

The DOL issued its new persuader rule today. The final rule is largely unchanged from the proposed rule that was originally published in 2011. As expected, the DOL’s new interpretation departs from decades of precedent to expand the definition of “persuader” activities while limiting the definition of “advice” activities. As a result of this new rule, employers face substantial reporting requirements related to agreements they enter into with consultants  and attorneys that could touch upon union organizing.  Moreover, the range of activities on which employers must report is substantially broader, given the DOL’s focus on what it calls “indirect” persuader activity.

Historically, employers were only required to report to the DOL after engaging third parties (e.g., consultants or attorneys) during an organizing campaign if the third parties directly communicated with employees.  Agreements or payments to entities or individuals providing advice to employers on how to communicate with employees did not need to be reported. The new rule, by contrast, requires employers to report the use of consultants or attorneys even if there is no direct contact with employees and the employer is free to accept or reject the consultant’s recommendations.

The new persuader requires employers to report when the consultants or attorneys the employer hires directly persuade workers or when the work has an “object” to persuade, even if there is no direct contact with employees.  This latter form of “indirect” persuasion can fall into one of the following four categories:

1. Planning, directing, or coordinating managers to persuade workers;
2. Providing materials to employers to disseminate to workers;
3. Conducting seminars for supervisors or other employer representatives; and
4. Developing or implementing personnel policies, practices, or actions to persuade workers.

A partial list of the types of engagements the DOL will now treat as reportable, indirect persuader activity includes:

1. Planning group or individual employee meetings;
2. Training managers or supervisors to conduct group or individual employee meetings;
3. Drafting, revising, or providing speeches, written material, website, audiovisual or multimedia content for distribution to employees;
4. Establishing or facilitating employee committees;
5. Coordinating the timing and sequencing of union avoidance tactics and strategies.

The DOL left the proposed rules substantially intact despite receiving comments that it could infringe on employers’ First Amendment rights and the attorney-client privilege. The DOL’s failure to change the proposed rule is not surprising, however, as it had previously stated that requiring disclosure when employers engage consultants or attorneys who do not directly contact employees was part of the reason it was revisiting its interpretation of the “advice” exemption.

The rule will become effective 30 days after publication in the Federal Register (which will likely happen tomorrow or Friday) and will be applicable to arrangements, agreements, and payments made on or after July 1, 2016.