Industry Associations Unite Against DOL Persuader Rule

April 1st, 2016 by Casey Flores

Several building associations are calling the Obama administration’s new “persuader” rule unconstitutional.

The Labor-Management Reporting Disclosure Act, scheduled to take effect on July 1, 2016, requires employers to report to the Department of Labor each time they engage a consultant to directly or indirectly persuade workers concerning their rights to organize and bargain collectively, regardless of whether the consultant has direct contact with workers. However, historically, the advice of attorneys has been exempt from the reporting requirements as privileged and confidential attorney-client communications, provided that 1) the attorney limits his or her services to advice, which the client is free to accept or reject, and 2) the attorney avoids direct communications with bargaining unit employees.

“The DOL is putting small employers at a profound disadvantage,” says National Federation of Independent Business (NFIB) legal director Karen Harned. “Unions pay people whose full-time job is to organize workers. Small employers have businesses to run. They don’t have in-house lawyers or compliance officers to guide them through the process or navigate the complicated rules governing union organizing.”

“DOL’s final persuader rule is another example of regulatory overreach that will impose far-reaching reporting requirements on employers and their consultants and result in significant monetary and legal implications for home building firms,” says National Association of Homebuilder (NAHB) chairman Ed Brady. “This lawsuit is necessary to maintain long standing policy on what union-related communications between employers and attorneys remain confidential.”

NFIB and NAHB joined the Texas Association of Business, the Texas Association of Builders and the Lubbock Chamber of Commerce in filing a lawsuit against the DOL in the United States District Court, Northern District of Texas, Lubbock Division. Other associations, including the Associated Builders and Contractors of Arkansas among others, filed lawsuit directly against secretary of labor Michael Hayes in his official capacity as the rule’s director. The business groups maintain that the rule violates the First Amendment’s guarantee of freedom of speech and right of association.

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