Labor Dept.’s new reporting rule for anti-union consultants is long overdue

Today, the Department of Labor (DOL) will publish a long-awaited new rule (RIN 1245-AA03) expanding the range of activities that trigger the employer and consultant reporting requirements of the 1959 Labor-Management Reporting and Disclosure Act (LMRDA). As its name suggests, the authors of the act sought to impose reporting and disclosure requirements on both unions and employers. But because of a loophole in the act (the interpretation of the “advice exemption”), employers and consultants have largely evaded its reporting requirements. The new rule addresses when employers are required to report to the DOL when they hire outside anti-union consultants for the purpose of dissuading employees from choosing to form a union.

{mosads}Why is the rule necessary? For years, employers and anti-union consultants have reported their financial relationship only when the consultants have engaged in “director persuader activity” — i.e., face-to-face contact with employees. As a result, the overwhelming majority of consultant campaigns, no matter how aggressive or expensive, go unreported. This practice is contrary to the intention of the law’s drafters and it ignores the significant expansion of the union avoidance industry in recent decades. Academic studies have demonstrated that the overwhelming majority of employers now recruit the services of outside anti-union experts when confronted by employee organizing.

The old practice also ignores the growing sophistication of anti-union consultants, who operate extremely effectively in the gray areas of the law. Most consultant firms claim overwhelming victory rates in organizing campaigns. One firm even offers employers a “money back guarantee” in the event of a union victory, thereby making a mockery of the notion that the law protects employees’ choice on unionization. Moreover, many consultants don’t simply operate in the gray areas of the law but have also been involved in organizing campaigns tainted by egregious unlawful management practices. The additional disclosure required by the DOL’s new rule is long overdue and a small step in the right direction.

So what does the new rule do? The rule adopts a commonsense definition of the word “advice” and in doing so, helps restore the original intent of the act when it comes to reporting the activities of union avoidance consultants. When consultants are effectively running the show during anti-union campaigns — training supervisors in anti-union activities, writing anti-union scripts for employers to deliver to employees, and creating videos and other anti-union materials that are shown to employees at compulsory “captive audience” meetings and distributed to them at work — they cannot evade the reporting requirements by hiding behind an overly broad interpretation of “advice.” Instead, they will be required to report their financial arrangements to the DOL. The rule is consistent with the intention of the law, and will provide greater transparency for employees.

What does the new rule not do? The rule does not limit employers’ right to recruit anti-union consultants or law firms. It does not require reporting by law firms that provide employers solely with legal advice or reporting by consultants whose activities are merely related to providing advice.

Nor does it restrict the vast array of anti-union tactics used by consultants or limit employers’ ability to communicate their anti-union views to employees in any way. Employers and consultants will still have exclusive access to employees at the workplace. They will still be able to force employees to attend “captive” anti-union meetings, which employees, who have no right of reply, can be sacked for refusing at attend. They can still use supervisors to lead anti-union campaigns and conduct one-on-one meetings with employees, and supervisors can still be fired for refusing to perform this role.

The rule simply says that when consultant anti-union activities extend beyond any reasonable interpretation of the term “advice,” they must report their financial arrangements with employers to the Labor Department. This was the original intention of the statute: Its drafters were deeply concerned by the role of shadowy third-party consultants in union campaigns during an era when their activities were significantly less prevalent, less intense and sophisticated than they are now.

This commonsense rule has been many years in the making. The Obama administration DOL first proposed the new rule five years ago — a similar rule was enacted by the Clinton DOL but then reversed by George W. Bush’s DOL — but it has suffered constant delays because of vigorous opposition from big business and anti-union organizations who confidently predicted that the rule “would never see the light of day.” Their opposition will not end even now: they will seek to block the rule in the courts or even through a Congressional Review Act. But just as it did with the National Labor Relations Board’s new election rule — which has made only a slight difference to the conduct of certification elections — big business is once again crying wolf. Make no mistake, their opposition has nothing to do with the likely impact of the modest rule: Unions are already subjected to extensive financial disclosure requirements under the law, and the extent of disclosure imposed on employers and anti-union consultants under the rule, in contrast, is fairly minimal.

More important, workers have a right to know: When anti-union employers spend hundreds of thousands, and in some cases millions of dollars, on shady consultants to undermine organizing efforts, workers should have a right know how much they are spending. In recent years, anti-union organizations have made an art form out of attacking workers’ collective rights in the name of “worker freedom,” but what about the freedom of workers to know how much money consultants are being paid to defeat their efforts to form a union? The disclosure of this information will assist workers making a more informed decision on unionization.

Logan is a professor and director of Labor and Employment Studies at San Francisco State University.