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New labor regs could violate First Amendment, lawyer-client confidentiality

By   /   March 24, 2016  /   News  /   No Comments

Employers will have the federal government looking over their shoulder if they discuss unionization issues with outside legal counsel under a final rule released Wednesday by the Department of Labor.

Unions are vocal supporters of the new regulations, which give them a leg-up in organizational activities, but some lawyers worry that the new regulations violate employers’ First Amendment rights and privileged communication between attorneys and clients.

Image via Wiki Commons

DON’T SPEAK: New regulations issued Wednesday by the U.S. Department of Labor will limit how employers can communicate with their employees about unionization issues.

The so-called “Persuader Rule”  has been a contentious issue since it was first proposed more than four years ago. The final version requires businesses to disclose whether they sought outside consultation or legal assistance as part of any effort to oppose their workers’ unionization.

The Department of Labor is greatly limiting businesses’ ability to obtain labor relations advice from attorneys, consultants and trade associations, said Kristen Swearingen, vice president of political affairs for the national branch of Associated Builders and Contractors, a trade group of open shops.

Since most small businesses don’t have in-house legal teams, the rule piles new mandates on small businesses, ABC warned.

“No employer should have to wade through the final rule’s 446 pages to figure out whether they can safely get advice on what they can say to their employees,” said Swearingen.  “The final rule is clearly an attempt by DOL to restrict employers from communicating the potential pros and cons of unionization.”

The National Association of Manufacturers says the new rules violate employers’ First Amendment rights and promised to challenge them in court.

The Department of Labor says more than 70 percent of employers hire outside consultants to oppose union organizing campaigns.  In a statement, DOL called the use of consultants “a longstanding loophole” that allowed employers to call on experts to guide their messaging during unionization battles.

Now, the new rules will require labor organizations, consultants, and employers to file reports and disclose expenditures on labor-management activities. The ostensible purpose is to prevent abuse, corruption, and improper practices by all parties — labor organizations, employers, and labor relations consultants — according to U.S. Secretary of Labor Thomas E. Perez.

“It’s a matter of basic fairness,” Perez said. “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.”

Even if those consultants never have direct contact with workers, businesses will have to file reports with the federal government.

“Working men and women deserve to know who their employer is hiring and exactly how much they are spending to discourage workers from forming a union,” said Richard Trumka, president of the AFL-CIO, in a statement.

But such disclosures raise free-speech questions and risk compromising the privileged communication between lawyers and their clients, some attorneys warn.

READ MORE: Lawsuits flying as NLRB pushes ahead with new union election regulations

“The U.S. Department of Labor’s (USDOL) new ‘persuader’ rule would force attorneys and their clients to report in public records their confidential attorney-client and financial relationships, providing an unfair boost to unions in their organizing efforts,” said Fisher & Phillips LLP, a national law firm, in a “legal alert” posed on the firm’s website.

The new rules are “a transparent effort to boost union organizing,” the law firm said.

It’s the latest in a series of pro-union moves made by the Obama administration.

Another major change – the so-called “ambush election rule” that shorted the period of time between when a unionization election is called and when it must take place – is still being fought in court by employers’ groups.