By Jeffrey C. Kauffman

DOL estimates new interpretative standards will triple the number of LM-10 Employer Reports filed annually and predicts a twelve-fold increase in LM-20 Reports required from firms engaged in “persuader activities” as newly defined.

If the DOL proposals take effect, employers (and their advisors, including legal counsel) will have to treat activities that have not been reportable for the past 50 years as now subject to reporting requirements. The ambiguity of the new regulatory standards, coupled with potential criminal sanctions for willful non-reporting, potentially could result in substantial interference with an employer’s attorney-client relationship, disrupt an employer’s ability to obtain legal advice when confronted by union campaigns, and have a chilling effect on employer free speech during such campaigns.

On Monday, June 20, 2011, the DOL revealed details about its proposed changes for employer and consultant “persuader activity” reporting under the Labor Management Reporting and Disclosure Act (LMRDA). The DOL proposes to broaden the scope of reportable activities by substantially narrowing its interpretation of the “advice exemption” in Section 203(c) of the LMRDA.

As a result, employers will essentially be “flying blind” as to the reporting requirements, with long-standing interpretations and key factors employers previously relied upon being removed and replaced by new standards never applied or enforced before. The DOL proposes to eliminate any reliance on the following interpretative factors that have been used since 1962:

• Whether the potential persuader has “direct contact” with the Employer’s employees (as opposed to “indirect” or no contact)
• Whether the Employer is “free to accept or reject” written materials or revisions to materials for use during a union campaign

The proposed rules contain the following revised definition of exempt “advice” and reportable “persuader activity” to appear in instructions for the LM-10 and LM-20 reporting forms:

With respect to persuader agreements or arrangements, “advice” means an oral or written recommendation regarding a decision or a course of conduct. In contrast to advice, “persuader activity” refers to a consultant’s providing material or communications to, or engaging in other actions, conduct, or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively. Reporting is thus required in any case in which the agreement or arrangement, in whole or part, calls for the consultant to engage in persuader activities, regardless of whether or not advice is also given.

DOL/OLMS Notice, dated June 20, 2011, p. 23.

The proposed LM-10 and LM-20 reporting forms give examples of activities that would be reportable “if the object thereof was, directly or indirectly, to persuade employees”:

• Drafting, revising, or providing written materials for presentation, dissemination, or distribution to employees
• Drafting, revising, or providing a speech for presentation to employees
• Drafting, revising, or providing audiovisual or multi-media presentations for presentation, dissemination, or distribution to employees
• Drafting, revising, or providing website content for employees
• Developing or administering employee attitude surveys concerning union awareness, sympathy, or proneness
• Training supervisors or employer representatives to conduct individual or group employee meetings
• Coordinating or directing the activities of supervisors or employer representatives
• Developing personnel policies or practices
• Conducting a seminar for supervisors or employer representatives

The official DOL notice of proposed rulemaking, (pdf) published in the Federal Register on June 21, 2011, allows the public until August 22, 2011 to submit any comments to the DOL regarding its proposed new standards.  Written comments must include the regulatory identification number (RIN): 1245-AA03 and may be sent to: Andrew R. Davis, Chief of the Division of Interpretations and Standards, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution Avenue, NW., Room N-5609, Washington, DC 20210. Alternatively, comments may be filed electronically through the federal eRuelmaking portal.

Photo credit: style-photographs