DOL publishes ‘persuader’ final rule

Employers will be required to report use of third-party consultants

Posted March 28, 2016

On March 24, the Department of Labor (DOL) published the “persuader” final rule in the Federal Register. The rule will require employers to report consultant — or “persuader” agreements — to complement the information that unions already report on their organizing expenditures. The DOL says this allows for better information for workers making decisions on whether or not to form a union or bargain collectively.

According to the DOL, employers commonly engage third-party consultants in union matters, adding that workers often do not know when employers engage consultants.

The new rule interprets Section 203 of the Labor Management Reporting and Disclosure Act. The law requires labor organizations, consultants, and employers to file reports and disclose expenditures on labor-management activities. The law intends to prevent abuse, corruption, and improper practices by labor organizations, employers, and labor relations consultants alike.

The DOL says there is currently a reporting gap which allows employers to hire consultants to create materials, strategies, and policies for organizing campaigns — and even to script managers’ communications with employees — without disclosing anything, as long as the consultant does not directly contact employees.

According to the agency, the new rule closes the gap to align the regulation with the statute, by requiring reporting on “actions, conduct, or communications that are undertaken with an object, explicitly or implicitly, directly or indirectly, to affect an employee’s decisions regarding his or her representation or collective bargaining rights.” Under the same statute, unions already are required to make comprehensive public reports on their expenditures, including expenditures on union-organizing campaigns.

The final rule is effective on April 25, 2016. The rule will be applicable to arrangements and agreements as well as payments (including reimbursed expenses) made on or after July 1, 2016.