Can Government Force You to Make Public Disclosures When Consulting Your Lawyer?

Date: April 25, 2016

One would think that even the Obama Administration would respect the time-honored right of individuals and businesses to freely consult with counsel. To be sure, the attorney-client relationship is absolutely fundamental to our system of justice. Moreover, the right to seek counsel is protected by the First Amendment. Unfortunately, we’ve learned that nothing is beyond the scope of federal regulation in the eyes of the Obama Administration. 

The U.S. Department of Labor (DOL) recently proved the point by promulgated amendments to its longstanding “Persuader Rule.” The rule previously required businesses to make public disclosures when paying consultants to speak to their employees during a unionization campaign; however, the revised rules extend those disclosure requirements further. Under the amendments, DOL now expects businesses to report whenever they’ve consulted anyone (including their legal counsel) on unionization issues—regardless of whether that consultant actually speaks with the company’s employees. 
 
One of the major issues with this new regime is that DOL is now interfering with the attorney-client relationship. That’s highly problematic for small business owners because they need competent legal counsel to help them navigate through unionization campaigns. To be sure, it’s very easy to do something that may violate the National Labor Relations Act if one seeks to respond to a unionization campaign without competent legal counsel. This area of the law is especially thorny and small business owners need to be able to speak freely with counsel to avoid legal pitfalls. 
 
Yet if a business must make a public disclosure every time they should consult with an attorney they may think twice about it. Accordingly, that requirement burdens the fundamental right to seek legal counsel. And that is just unacceptable. Moreover, the newly amended Persuader Rule also runs afoul of the First Amendment because it burdens the basic right of small business owners to engage in truthful, non-coercive speech when talking to their employees. What is more, this requirement also burdens the freedom of association because it interferes with a business owner’s right to freely associate with consultants. Bottom-line, it’s flat out unconstitutional. 

But there is an even more fundamental problem here. DOL simply lacks authority to impose this sort of requirement on business owners. Once again, the Obama Administration is stretching the text of statutes enacted long ago to justify new and unfounded mandates. And, as if that wasn’t enough, DOL finalized the revised Persuader Rule without considering small business impacts as required by the Regulatory Flexibility Act. 
 
Suffice it to say, we believe we have a very strong case against DOL. Accordingly, after filing our lawsuit to invalidate the new Rule in the Federal District Court for the Northern District of Texas, we’re now asking the Court for an immediate injunction to block its implementation. NFIB released a press release on Friday explaining that the injunction was necessary to protect the right of small business owners to seek out legal advice.

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