The Department of Labor’s (DOL) final “persuader” rule “will have a chilling effect on hospitals’ ability to seek expert advice and counsel” on labor and collective bargaining issues, the AHA said last week.

The final rule, issued March 23, forces employers to disclose when they engage outside consultants, including legal counsel, to help with employee communications about union election campaigns or collective bargaining.

It narrows the “advice” exemption for “persuader” reporting by employers and labor consultants under the 1959 Labor-Management Reporting and Disclosure Act (LMRDA). The rule, which adopts with slight changes a DOL proposal from 2011, would significantly expand the circumstances requiring employers and labor consultants to report activities specifically undertaken to encourage employees to vote for or against union representation or take a certain position on collective bargaining proposals.

In a press statement following release of the rule, AHA Executive Vice President Tom Nickels said the “significant ambiguities and burdens created by the new reporting standards may discourage many from seeking or providing the expertise that is critical and necessary to help hospitals and other employers follow the law.”

Nickels noted that DOL’s prior interpretation of the exemption required reporting only when a consultant communicated directly with employees. The AHA and its American Society for Healthcare Human Resources Administration affiliate had urged the DOL to abandon the proposed new interpretation.

Under the LMRDA’s “persuader rule,” employers and consultants are required to file reports and disclose payments to the DOL each time they engage a consultant to persuade employees regarding employees’ rights to organize. However, the LMRDA provides an “advice exception,” which had been interpreted for more than 50 years to exclude an employer’s discussions with its labor relations consultants – including legal counsel – regarding opposition to a union organizing campaign or collective bargaining agreement, as long as the consultants had no direct contact with employees.

The new rule narrows the definition of advice and substantially expands the scope of an employer’s reporting obligations under the LMRDA to include a broad range of indirect persuader activities by labor relations consultants – including attorneys.

The definition of “persuader activities” under the new rule would include “any actions, conduct, or communications that are undertaken with an object, explicitly or implicitly, directly or indirectly, to affect an employee’s decisions regarding his or her representation or collective bargaining rights.”

According to the DOL, employers and consultants will now have to report not only when there is direct consultant contact with the employees, but also when the consultants:

  • Plan, direct, or coordinate managers to persuade workers;
  • Provide persuader materials to employers to disseminate to workers;
  • Conduct union avoidance seminars; and
  • Develop or implement personnel policies or actions to persuade workers.

The rule has come under fire from the American Bar Association, most employers and national organizations, like the Coalition for Democratic Workplace (CDW), which includes the AHA as a member. The coalition is considering a legal challenge to the rule.

“The department’s revised persuader rule is so expansive it will likely make it difficult for employers to access routine legal counsel or expert advice on employee relations, human resources or employee benefits,” CDW Chair Kristen Swearingen said. She added that it will require “new, complex and unprecedented levels of disclosure for attorneys, consultants, associations and other professionals who provide advice to employers about how to legally communicate with their employees.”