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Labor Department vs. Employers: Rewriting Advice Exemption to Benefit Unions

The Labor Management Reporting and Disclosure Act (“LMRDA”) says labor relations consultants and lawyers must report to the government on their activities if they attempt to persuade employees in a workplace to organize a union and bargain collectively. But the law contains an important provision called the “Advice Exemption” (section203c), which says an employer or its lawyer/consultants is not required to file a report with the government.

For many years the Labor Department (DOL) broadly interpreted this provision. The “advice exemption” was considered protection for an employer so that when it asks a lawyer to look over materials it is preparing to counter a union organizing drive, it doesn’t have to report on the content of the materials or the details of its lawyer-client relationship.

However last June the Obama Labor Department proposed to change the meaning of this important exemption. Under the DOL’s proposed new rules, both employers and their attorney/consultant advisors must file reports that can give labor unions detailed information about their relationships—including information about their fee arrangements—that can be used against them during a union organizing campaign.

Under the longtime interpretation of the advice exemption, which is still in effect, the Labor Department provides a key ‘bright-line’ test: It says the exchange of lawyer-employer information is exempt from government reporting requirements if the employer “is free to accept or reject the written material prepared for him …” As a result, most services performed by attorneys and consultants during a union organizing campaign are currently exempt. The courts upheld this interpretation of the law in a 1989 case, International Union, United Automobile Workers v. Dole, 869 F.2d 616 (D.C. Cir. 1989).

DOL’s proposed new or revised interpretation of the LMRDA advice exemption directly addresses and squarely overturns its current interpretation of the Advice Exemption. Under the proposed new DOL interpretation, when such a person prepares or provides a persuasive script, letter, videotape, or other material or communication, including electronic and digital media, for use by an employer in communicating with employees, the “Advice Exemption” does not apply and the duty to report is triggered. Similarly, a consultant’s revision of the employer’s materials or communications to enhance the persuasive message also triggers the duty to report. “Communications, or revisions thereto, are to be considered persuasive if they, for example, explicitly or implicitly encourage employees to vote for or against union representation, to take a certain position with respect to collective bargaining proposals, or refrain from concerted activity (such as a strike) in the workplace.” (Notice, pp. 61–62)

The DOL Notice goes on to delineate specific persuader activities not exempted under the advice exemption. These include but are not limited to drafting, revising, or providing a persuader speech, written material, website content, an audiovisual or multimedia presentation, or other material or communication of any sort, to an employer for presentation, dissemination, or distribution to employees, directly or indirectly; planning or conducting individual or group meetings designed to persuade employees; developing or administering employee attitude surveys concerning union awareness, sympathy, or proneness; training supervisors or employer representatives to conduct individual or group meetings designed to persuade employees; coordinating or directing the activities of supervisors or employer representatives to engage in the persuasion of employees; establishing or facilitating employee committees; developing employer personnel policies or practices designed to persuade employees; deciding which employees to target for persuader activity or disciplinary action; and coordinating the timing and sequencing of persuader tactics and strategies. (Notice, p. 66)

Just as frightening as DOL’s practical elimination of the advice exemption is a 7th Circuit 1983 decision which held that once a party provides persuader service to just one client, it is required to report all labor relations services to all clients in that same fiscal year, regardless of whether or not such services fall within the now limited advice exemption.

The new approach by the DOL is clearly designed to deter employers from seeking labor relations advice, and counsel in preparing for and defending against union organizing campaigns, much to the delight of the organizing union entity. This is but another result of the Obama Administration’s partnership with organized labor.

DOL’s new interpretation seeks to impose an unworkable standard that is difficult, if not impossible, to apply in practice and will have the effect of deterring employers from seeking to obtain legitimate information and guidance in developing and administering their labor and personnel programs and policies. In addition to these undesirable results, this new interpretation will impose broad ranged and burdensome reporting and filing requirements on employers at a time when they should be concentrating their energies and resources on creating jobs. All of these deleterious effects are obviously being driven by DOL’s desire to assist labor unions in their organizing efforts and to make it more difficult for employers to resist them. Simply stated, there is no justification for abandoning the DOL’s longstanding interpretation of the advice exemption and substituting an interpretation which practically removes it from the statute, thus burdening employers and benefiting unions.


Francis T. Coleman is a Washington, DC-area attorney.