On June 12, the U.S. Department of Labor will publish a Notice of Proposed Rulemaking to rescind a rule that would have required employers and labor-management consultants to report consultants’ indirect contact with workers during union organizing campaigns.
The rule, approved in March, applied to Section 203 of the Labor Management Reporting and Disclosure Act. It requires that labor organizations, consultants, and employers file reports and disclose expenditures on labor-management activities. The law is intended to prevent abuse, corruption, and improper practices by all parties.
What the Labor Department termed “a longstanding loophole,” however, allows employers to hire consultants to create materials, strategies and policies for organizing campaigns—and even to script managers’ communications with employees—without disclosing those arrangements, as long as the consultant does not directly contact employees.
The “persuader” rule was intended to close that loophole 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.”
In November 2016, U.S. Senior District Judge Sam Cummings of the U.S. District Court for the Northern District of Texas granted a permanent injunction and a motion for summary judgment by plaintiffs challenging the rule.
The case, National Federation of Independent Business v. Perez, was filed by the named plaintiff along with the Texas Association of Business, Lubbock [Texas] Chamber of Commerce, National Association of Home Builders, and the Texas Association of Builders. State attorneys general of Texas, Arkansas, Alabama, Indiana, Oklahoma, South Carolina, Utah, West Virginia, and Wisconsin were later added to the lawsuit.
Plaintiffs argued that the rule violated their First Amendment rights, the Due Process Clause of the Fourteenth Amendment, and the Regulatory Flexibility Act.
The public can comment on the new NPRM and the potential repeal of the rule through the Federal eRulemaking Portal. All comments received will be posted without change to the site. The public inspection copy of the NPRM can be viewed on the Federal Register’s website.