March 23, 2016
Final Rule: Employer-Consultant Reporting: Interpretation of “Advice” in Section 203(c) of the LMRDA
The Department of Labor’s Office of Labor-Management Standards (OLMS) will publish on March 24, 2016 a final rule revising two public disclosure reporting forms, the Form LM-10 (employer report) and the Form LM-20 (agreement and activities report). Speaking generally, and subject to exceptions, these reports must be filed when an employer and a labor relations consultant make an arrangement or an agreement that the consultant will undertake efforts to persuade the employer’s workers to reject an organizing campaign or collective bargaining effort by a union.
The final rule pertains to the employer and labor relations consultant/“persuader” reporting requirements of section 203 of the Labor-Management Reporting and Disclosure Act (LMRDA). Section 203 of the LMRDA requires employers and labor relations consultants to report their agreements or arrangements pursuant to which the consultant undertakes activities with an object, directly or indirectly, to persuade workers concerning their rights to organize and bargain collectively. This requirement is subject to an exemption in section 203(c) of the LMRDA, which states that no one is required to file a report covering the services of a consultant “by reason of his giving or agreeing to give advice” to the employer.
Under the final rule, an employer-consultant agreement is reportable if a consultant engages in “persuader activities.” These are defined as any 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 typical reportable agreement or arrangement, a consultant agrees to manage a campaign or program to avoid or counter a union organizing or collective bargaining effort, either jointly with the employer or separately. Under the Department’s previous interpretation of section 203(c) of the LMRDA, the employer and consultant would have to file a report only if the consultant communicated directly to the workers. The final rule requires that both direct and indirect activities must be reported.
The final rule also requires consultants to file reports when they hold union avoidance seminars for employers, but does not require employers to report simple attendance at these seminars.
The revisions to the Form LM-20 Agreement and Activities Report and the Form LM-10 Employer Report were made upon review of the comments received in response to the Department’s June 21, 2011 Notice of Proposed
Rulemaking. The final rule will be published in tomorrow’s edition of the Federal Register.The document is available for public inspection on the Federal Register website.
The revised interpretation in the final rule states that consultant activities that trigger reporting include direct contact with employees with an object to persuade them, as well as the following categories of indirect consultant activity undertaken with an object to persuade employees: (a) planning, directing, or coordinating activities undertaken by supervisors or other employer representatives including meetings and interactions with employees; (b) providing material or communications for dissemination to employees; (c) conducting a union avoidance seminar for supervisors or other employer representatives; and (d) developing or implementing personnel policies, practices or actions for the employer. Exempt “advice” activities that do not trigger reporting are now limited to those activities that meet the plain meaning of the term: an oral or written recommendation regarding a decision or course of conduct.
Under the previous interpretation, persuader agreements were not required to be reported if the consultant had no direct contact with employees and if the consultant limited his or her activity to providing the employer with materials that the employer had the right to accept or reject. The earlier interpretation of “advice” resulted in significant underreporting of persuader agreements, as it essentially limited reporting to agreements involving only direct persuader activities, not indirect activities.
In the Department’s view, full disclosure of both direct and indirect persuader activities protects employee rights to organize and bargain collectively and promotes peaceful and stable labor-management relations. The disclosure required under today’s rule will provide workers with essential information about the underlying source of the views, materials, and policies directed at them and designed to influence how they exercise their rights to union representation and collective bargaining. With knowledge that the source of the information received is an anti-union campaign managed by an outsider, workers will be better able to assess the merits of the arguments directed at them and make an informed choice about how to exercise their rights. With this information, they will be able to better discern whether the views and specific arguments of their supervisors about the benefits and drawbacks of union representation are truly the supervisors’ own, reflect their company’s views, or rather reflect a scripted industrywide (or even wider) antipathy towards union representation and collective bargaining. They will also be better able to consider the weight to attach to the common claim in representational campaigns that bringing a union, as a third party, into the workplace will be counterproductive to the employees’ interests.
More information on the rule is available on the OLMS persuader final rule page and employer-consultant reporting page, including the Form LM-20, Form LM-10, and corresponding instructions, as well as a persuader rule summary.
This rule takes effect on April 25, 2016. The rule will be applicable to arrangements, agreements, and payments made on or after July 1, 2016.
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Last Updated: 3-23-16