What the Union Persuader Rule’s “Indirect Persuasion” Focus Means for Employers 

Labor & Employment Alert

March 25, 2016

Unless Congress steps in, effective July 1, 2016, employers and the labor relations consultants, including lawyers, with whom they work to counter unionization efforts will be subject to the U.S. Department of Labor’s (DOL) new interpretation of the rule governing disclosure of those arrangements. Published in the Federal Register Thursday, the DOL touts its final “union persuader” rule as an expansion of the reporting requirements under Section 203(b) of the Labor-Management Reporting and Disclosure Act. The DOL’s final rule reverses an interpretation that has existed for more than a half century exempting consultants from reporting on “advice” to companies embroiled in a union campaign.

According to the DOL, the final rule requires employers to disclose “agreements or arrangements” with third-party consultants — including attorneys — that are aimed at persuading employees to vote a certain way in a union election. Significantly, the DOL says the disclosure requirements apply regardless of whether the consultant has any direct contact with employees so long as an object of the advice or work is to persuade employees. This represents a watershed change from 54 years under the prior interpretations, which allowed employers’ arrangements with consultants to remain confidential so long as the employer had the right to accept or reject the consultant’s materials or if the consultant had no direct contact with employees.

The DOL heralds this change as closing a loophole in the prior rule, which it claims “left a broad category of persuader activities unreported ... .” Absent from the DOL’s comments is any real showing of concern for employers’ rights to keep their attorney-client relationships confidential, with the DOL simply making statements like: “[T]he Department’s revised interpretation does not infringe on the common law attorney-client privilege.”

The practical impact of this dramatic change is that more employers and consultants must consider the reporting obligation of filing DOL Forms LM-20 (for consultants) and LM-10 (for employers). According to the DOL, Form LM-20 must be filed “within 30 days” after entering into a covered agreement or arrangement, and it must be filed electronically with the DOL.

According to DOL, the final rule requires that both the employer and the consultant use those forms to report the consultant’s engagement if the consultant engages in any direct persuasion (i.e., direct communication with employees) or undertakes activities that fall within any of the following categories of “indirect persuasion”:

  • Planning, directing, or coordinating supervisors or managers with the aim of indirectly persuading employees. The final rule provides the following nonexclusive list of factors that the DOL views as “indicia of a consultant using supervisors to engage in indirect persuasion: the consultant plans, directs or coordinates which employees they meet; where they meet them; when they meet; for how long they meet; the topics discussed and the manner in which they are presented; the information gathered from the employees and how they should gather it; debriefing with the supervisor to orchestrate the next steps in the campaign; and identifying materials to disseminate to employees.”
  • Providing “persuader materials.” According to the DOL, this category of reportable activity includes not only the creation of materials by the consultant for dissemination to employees by the employer, but also includes a consultant revising employer-created materials if the object of the revision is to enhance their persuasive effect.
  • Conducting a seminar for supervisors or other employer representatives with the aim of developing “anti-union tactics and strategies.” The DOL makes clear, however, that this category is not meant to encompass an employer’s attendance “at a multiple-employer union avoidance seminar.” This category does not include the provision of “off-the-shelf” materials that the employer selects “from a library or other collection of pre-existing materials prepared by the consultant for all employer clients.” However, if the consultant selects such materials for the employer, then the DOL deems the activity to be reportable.
  • Developing or implementing personnel policies or actions with an object to persuade employees. The DOL notes that “[t]his encompasses two types of activities: (a) creating persuasive personnel policies; and (b) identifying particular employees (or groups of employees) for personnel action, with an object to persuade employees about how they should exercise their rights to support (or not) union representation or a union’s collective bargaining proposal.”

DOL says disclosure is not required, however, if the consultant merely provides advice, which the final rule defines as “oral or written recommendations regarding a decision or course of conduct.” Also exempted from required disclosure are agreements that involve nothing more than the provision of legal services.

Given the DOL’s position on this new reporting requirement, some employers might be tempted to avoid involving legal counsel when faced with organizing efforts, because the idea that the relationship might be reportable is unappealing. However, employers should bear in mind that the new rule does not purport to reach all engagements, and the benefits of having counsel generally will outweigh the intrusion and inconvenience of any reporting requirement. It is also worth noting that Secretary of Labor Thomas E. Perez has publicly stated that the final rule does not require that the content of a consultant’s work be disclosed.

The final rule is available here. Republican lawmakers reacted quickly with a promise to consider options to block the rule, but whether those efforts take shape and gain traction remains to be seen. 


Jeremy J. Glenn



(312) 474-7981

Related Practices

Cozen O’Connor will continue to provide clients with traditional labor law advice and services and will help clients comply with the new requirements.