The Wall Street Journal reports that the U.S. Department of Labor is set to finalize a new rule, which will come into effect this summer. The so called “Persuader Rule” would require businesses to publically report the names of any outside attorneys or consultants who render any sort of advice on unionization issues. It would also require them to disclose how much they are paying for such counsel.
In our view this is one of the more outrageous things that we’ve seen from the Obama Administration. Not only does this represent another attempt to tip the scales in favor of Big Labor in union certification elections, but it infringes on employers right to maintain completely confidential communications with counsel. It also raises serious ethical issues for attorneys who counsel businesses on these matters.
For that matter the Persuader Rule is meant to discourage businesses from seeking out much needed advice on unionization issues—which is an especially difficult and complex area of the law. As we tell small business owners, it is never a good idea to try to manage a unionization campaign without competent legal counsel. But of course, a public reporting requirement will inhibit businesses from exercising their right to counsel. And we think it is flat-out-illegal to impose such a requirement on companies.
Karen Harned, Executive Director of the NFIB Small Business Legal Center, recently published an editorial in the Daily Caller analogizing DOL’s “Persuader Rule” to a an act of sabotage. And without doubt, small business owners are going to be hit hardest by this rule, given that they usually lack in-house counsel and consequently depend on outside advice on labor issues. For more commentary, check out Littler’s labor law blog here.