Tilting The Playing Field: How DOL Is Trying To Deprive Small Businesses Of Legal Representation

Karen Harned Executive Director, NFIB Small Business Legal Center
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The Super Bowl is coming up. Both teams’ coaches have been extensively preparing, going over game tape, reading scouting reports, and drawing up plays. Imagine what the game would look like if one side’s coach was suspended by the NFL in the two weeks leading up to the game. It would be almost impossible for them to put together an effective plan to win the biggest game of the year.

A similar scenario is playing out in the business world right now. The Department of Labor is pushing a rule that would make it much more difficult for small business owners to get good legal advice when they have to deal with union organizing. Just like professional football, the rules governing union organizing are complex. Without sound legal counsel, a small business owner could easily find themselves in violation of the law. At the least, they would face a profound disadvantage in a unionization election.

A typical small business owner acts as the compliance officer for their firm. They grapple with regulations and file the paperwork. They may employ an accountant to help them with the complexity of filing taxes and making payroll, but they typically don’t have someone whose fulltime job is keeping the company right with regulators. According to NFIB research, more than 70 percent of owners discover new or modified regulations in the normal course of doing business.

That means that most small business owners won’t seek to understand labor law until they are confronted face-to-face with the issue. The folks on the other side, the labor union representatives, are not exactly in the same boat.

Labor unions employ dedicated personnel whose full-time job is organizing workers. They know the system inside and out and take every advantage they can to organize a new business. They certainly don’t advise a business owner on what their rights are in the process.

Right now, a small business owner is free to call up the National Federation of Independent Business and talk with one of our attorneys. We can point them to our ten-page online guide to managing unionization efforts and can recommend a local attorney with experience in these issues. Seems relatively simple, right?

The Department of Labor has a number of requirements for people who engage in the unionization process as a “persuader.” Legal advice typically falls outside these rules as long as the attorney is not engaging with employees and as long as the small business owner is free to accept or reject their advice.

However, now the Department of Labor wants to apply all of their persuader rules to any lawyer who offers advice of any sort to a business owner. The disclosure requirements would require that a lawyer not just identify themselves as advising the business, it would also force them to publicly disclose all fees and arrangements from all clients for all labor relations services. That is a breach of attorney ethics rules mandated by many states and an incredible burden, so much so that the American Bar Association has warned the rules would discourage attorneys from offering labor law advice.

The NFIB has hundreds of thousands of members and takes many calls throughout the year. By placing our guide freely available on the website, we could be construed as acting as a persuader for every single one of our members. Would that mean we would have to turn over our entire membership list to the Department of Labor?

The new interpretation of the persuader rule is a perverse attempt to tilt the playing field. A small business owner still finds themselves at a profound disadvantage. Just a few years ago, the National Labor Relations Board shortened the minimum time from the start of a union organizing campaign to the election to just 13 days. That’s not a lot of time to engage a lawyer and get educated on the process.

The NFIB Small Business Legal Center is fighting for our right to offer good advice to our members. They deserve to have a coach that is experienced in dealing with union elections and employee relations. They shouldn’t have to take the field alone against a phalanx of union lawyers. We’ve asked the Department of Labor to reconsider their rule, which has not been finalized. There’s time for them to recognize that this goes too far and deprives small business owners of sound legal representation.