WASHINGTON — The Department of Labor issued a new disclosure rule Wednesday requiring employers and paid consultants to disclose more information about their strategizing during union organizing campaigns, drawing condemnation from the National Retail Federation.
The rule requires employers and paid consultants to file reports for what DOL called “direct persuader activities” when consultants speak with workers, as well as indirect activities, including any scripting a consultant might create for managers and supervisors speaking to workers.
“Workers often don’t know that their employer hired a consultant to manage its message in union organizing campaigns, including by scripting speeches by managers, talking points, letters and other documents,” DOL said. “Consultants may also direct supervisors to express specific viewpoints that don’t match those supervisors’ actual views as individuals — something workers may find relevant in assessing the information they receive from their supervisors.”
Labor Secretary Thomas Perez said, “Workers should know who is behind an antiunion message. It’s a matter of basic fairness. This new rule will allow workers to know whether the messages they’re hearing are coming directly from their employer or from a paid, third-party consultant. Full disclosure of persuader agreements gives workers the information they need to make informed choices about how they pursue their rights to organize and bargain collectively. As in all elections, more information means better decisions.”
The rule does not prohibit employers from hiring consultants or “constrain them in what information they can provide,” DOL said. It “simply ensures that employees are given more information about the source of campaign material, which helps them make a more informed choice in exercising their rights.”
The NRF said the new rule could have a “chilling effect” for employers.
“Once again, the Obama administration is bowing to labor unions and eliminating a well-established, clear test in favor of an ambiguous and open-ended standard that will lead to confusion for America’s employers,” said David French, senior vice president for government relations at the NRF. “For more than 50 years, the Department of Labor has maintained a clear definition of the advice exemption so that employers could seek and receive legal counsel and protect employer free speech. Now, DOL is rewriting the law without any involvement from Congress and without any proof a change is needed.”
French said the rules would “trigger” reporting requirements for any communication that “could even indirectly persuade workers regarding collecting bargaining.”
“NRF is concerned that the new standard will discourage employers from seeking advice of counsel in a broad swath of areas that have nothing to do with traditional persuader activities,” French said. “The end result will be a chilling effect on simple legal advice regarding employee or collective bargaining issues.”
DOL argued that it is addressing a loophole and a lack of transparency under the current statute that allows employers to hire consultants without disclosing anything as long as the consultant does not directly contact employees.
That statute is designed to prevent abuse, corruption, and “improper practices” by labor organizations, employers and labor relations consultants.
DOL said the information will be used to complement what unions already report on in their organizing expenditures to give workers considering whether or not to form a union or bargain collectively better information. Under the same statute, unions must already make comprehensive public reports on their expenditures, including on union-organizing campaigns.
“This rule is about disclosure, and more disclosure here means more peaceful and stable labor-management relations,” said Michael Hayes, director of the Office of Labor-Management Standards. “With workers having a better understanding of the true source of persuader communications, worker-supervisor and other workplace relationships are likely to proceed more smoothly no matter what is decided regarding union representation.”
The new rule takes effect on April 25 and will be applicable to arrangements, agreements and payments beginning on July 1.