It would be unprecedented to ask the Boston Red Sox to file its playbook with Major League Baseball before it takes on the Bronx Bombers. It would be unheard-of for a columnist at the New York Times to disclose a list of news sources before delivering a blow to the presidential front-runner. And it would be unfair to ask any U.S. business to tell the U.S. government when they seek counsel to deal fairly with their employees – and yet, last week the U.S. Department of Labor leveled a rule that would require exactly that from American businesses.
The “persuader” rule is one of several disclosure requirements imposed by Congress in 1959 as part of the Labor Management Reporting and Disclosure Act. It was designed to require employers to disclose their hiring of “middlemen” to speak with employees and influence their opinions about unions. Often, these middlemen – persuaders — would pose as workers so that the employees would not know that their employer was the source of these communications. For more than 50 years, the persuader rule has required employers and those they hire to speak directly to employees to file reports to increase transparency on this type of activity.
On the other hand, the retention of outside legal and labor relations experts who advise employers on how to lawfully communicate with employees — but do not actually speak directly with employees — has been exempt from these reporting requirements as “advice.” The distinction is that in these instances it is clear the employer is the one trying to persuade the employees, not outside advisers.
Now, the Department of Labor — without any involvement from Congress – is attempting to rewrite the law. The Department’s revised persuader rule is so expansive it will likely make it difficult for employers to access routine legal counsel or expert advice on employee relations, human resources or employee benefits.
The rule will require new, complex and unprecedented levels of disclosure for attorneys, consultants, associations and other professionals who provide advice to employers about how to legally communicate with their employees. Additionally, these professionals will need to disclose to the federal government their client lists and other confidential information not related to the transaction in question. According to the American Bar Association, the persuader rule will likely discourage many attorneys from handling labor issues, leaving tens of thousands of small businesses without access to important advice on how to comply with the law.
As a result of the filing of this rule, the Coalition for a Democratic Workplace – made up of over 600 organizations — this week joined seven other plaintiffs in a lawsuit against the U.S. Department of Labor. The nature of the lawsuit is centered on the rule’s unfair and unnecessary foundation. Employers already have to report when they hire consultants to speak directly with employees, so any additional reporting is redundant.
It is our belief that the rule deprives U.S. businesses the right to free speech under the First Amendment and the National Labor Relations Act.
What is especially concerning is the blatant one-sidedness of this rule. While the Department of Labor has imposed strict rules on the side of business, they’ve failed to impose any transparency on labor unions, which regularly rely on high-paid PR firms, front groups and salts to influence the employees’ views on their employer and the union itself.
Not only is the Department’s new rule unfair to U.S. businesses, it delivers a huge win to labor unions and could be a massive blow to the U.S. economy. What was once designed to be a rule to protect employees from being unfairly influenced by businesses now allows unions to unfairly influence employees.
Today’s middlemen are salts, union front organizations and messages from union-retained public relations firms and they will remain secret under the proposed rule.
So while competition continues to be enjoyed in sports, politics and many other aspects of the American dream, the desire to successfully run a business in this country will be compromised by the U.S. Department of Labor and their alliance with the labor unions.
J. Bruce Cross is a director in the firm of Cross, Gunter, Witherspoon & Galchus, P.C. in Little Rock, Arkansas.