New Labor Rules Attack Small Businesses

In June 2011, the Department of Labor proposed sweeping changes to the rules that administer the Labor-Management Reporting and Disclosure Act. The changes, which could take effect as early as May 2013, seek to drastically re-interpret longstanding requirements on how employers can work with legal counsel to comply with labor laws.

► Current law requires employers, law firms, and other labor union experts to disclose when employers have sought assistance from consultants who intend to directly “persuade” employees regarding union members.

► For decades, the law has included a very important exemption: employers were allowed to obtain legal advice from attorneys to remain compliant with current law.

► These new regulations would drastically expand the definition of “persuader” activity to include many activities currently recognized as labor-law advice.

► These proposed changes would make it more difficult for employers, especially smaller-sized businesses, to access necessary legal assistance to help them comply with the complex laws governing labor relations. It would make it more difficult for employers to understand how to legally discuss labor issues with their employees and create an environment where even the most well-intended employers could unknowingly trigger a technical labor violation. This would effectively “gag” employers by preventing access to legal assistance and keep many employees from hearing both sides of the unionization debate.

Activities that would trigger the new reporting requirement are expansive and include training for management and supervisors, employee handbooks and other documents prepared by attorneys, and materials provided at conferences or by trade associations. Specifically, these new Labor Department regulations would require employers and consultants to report such activities as:

• Drafting or revising written materials;

• Drafting or revising remarks employers give to employees;

• Supervisory training;

• Coordinating the activities of supervisors;

• Developing personnel policies or practices; and

• Conducting certain types of training for supervisors.

The bottom line:

Many small and medium-sized manufacturers do not have the resources to keep expensive labor attorneys on their payrolls, and they often have to retain outside lawyers to help them understand the complex labor law system. Many times, even larger employers feel the need to rely on outside legal experts to help them with complicated labor issues.

The proposed change virtually eliminates the “advice exemption,” so businesses would have to make detailed and confidential information public—including possibly proprietary information about business operations and details about contracts for services, including legal services.

Finally, and most chillingly, under this proposal, employers and attorneys who fail to properly comply with the new regulations would face criminal penalties.

Joe Trauger is vice president for human resources policy for the National Association of Manufacturers in Washington, D.C. This post originally appeared on Labor Watch, published by the Capitol Research Center, and appears here with permission.