June 21, 2017
Proposed Rescission of Rule Interpreting “Advice” Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act
On June 12, 2017, the Office of Labor-Management Standards (OLMS) published in the Federal Register a Notice of Proposed Rulemaking (NPRM) that proposes to rescind the currently-enjoined regulations established in the final rule titled "Interpretation of the 'Advice' Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act," published March 24, 2016, and effective April 25, 2016. See the NPRM at: https://www.regulations.gov/document?D=LMSO_FRDOC_0001-0037. The 2016 Rule revised the Department’s interpretation of the reporting requirements set out in section 203 of the Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. 433, concerning employers and labor relations consultants who make agreements or arrangements under which the consultant undertakes activities with an object, directly or indirectly, to persuade employees regarding the exercise of the right to organize and bargain collectively through representatives of their own choosing. See the 2016 Rule at: https://www.gpo.gov/fdsys/pkg/FR-2016-03-24/pdf/2016-06296.pdf.
The statute states that no report is required covering the services of a consultant or other person by reason of his giving or agreeing to give "advice" to such employer.
The 2016 Rule narrowed the interpretation of the "advice" exemption. It expanded the reporting requirements by requiring the reporting of employer-consultant agreements under which the consultant undertakes activities that do not involve direct contact between consultants and employees. See the 2016 Final Rule page for further information.
The proposed rule would rescind the 2016 Rule. However, if the 2016 Rule is rescinded as proposed, the action would not affect the disclosure requirements currently in effect. The U.S. District Court for the Northern District of Texas issued a nationwide permanent injunction against enforcement of the Rule on November 16, 2016, which continued a preliminary injunction that had been entered on June 27, 2016. National Federation of Independent Business v. Perez (N.D. Tex. 5:16-cv-00066-c). PDF. Since implementation of the 2016 Rule was enjoined before its application became mandatory, no reports were filed or are due under it. Thus, the Department has continued to enforce the reporting requirements that existed before the 2016 Rule.
The NPRM provides for a 60-day comment period. Comments must be received on or before August 11, 2017. You may submit comments, identified by RIN 1245-AA07, only by the following method: Internet-Federal eRulemaking Portal. Electronic comments may be submitted through www.regulations.gov/document?D=LMSO_FRDOC_0001-0037. Follow the instructions for submitting comments. Please be advised that comments received will be posted without change to www.regulations.gov, including any personal information provided. The Paperwork Reduction Act section of the preamble provides information about additional comment opportunities for the associated information collection requirements.
If you have any questions, please contact Andrew R. Davis, the Chief of the OLMS Division of Interpretations and Standards, at (202) 693-0123 or OLMS-Public@dol.gov.
Last Updated: 6-21-17