“The U.S. Labor Department on Tuesday officially rescinded the Obama administration’s ‘persuader rule’ that would have required lawyers and consultants to report on advice given to employers about persuading employees on union issues.” Among its numerous other problems, the rule drew fire from the American Bar Association and other groups as an infringement on lawyer-client confidentiality. [ABA Journal, earlier]
“Calling the Department of Labor’s new interpretation of its LMRDA Persuader Rule ‘defective to its core,’ the District Court for the Northern District of Texas issued a nationwide injunction” against the Final Rule published on March 24, 2016.” [Labor Relations Today, earlier] We summarized the regulations early on:
New Department of Labor regulations will require, on pain of serious criminal penalties, regular disclosures by lawyers, consultants, advisers, website developers, P.R. firms, pollsters and many others whose activities might persuade employees not to sign union cards. (Current regulations require disclosures only regarding consultants who actually meet with employees, as opposed to generating information that might reach them.)
The result would be not only to put we-know-where-you-live intimidation pressure on a much wider range of persons, and create many new tripwires for damaging liability, but also imperil attorney-client privilege, as with a provision demanding that attorneys disclose relationships with other clients.
On “Wednesday the American Bar Association joined others in asking federal lawmakers to reconsider the [Labor Department’s] revised rule [requiring more extensive disclosure of the identities of outside professionals hired to resist unionization, as well as other clients of those professionals]. Although there are a number of ways in which the rule is ‘deeply flawed,’ the overarching concern of the ABA is the negative impact it will have on attorney-client privilege, says ABA President Paulette Brown in written testimony (PDF) submitted for a Wednesday hearing by a U.S. House subcommittee.” [ABA Journal, BNA, earlier]
A shocking change in American labor relations is brewing at the U.S. Department of Labor, which is expected sometime soon to alter a major regulation. The change involves a new interpretation of the “advice exemption” of the Labor Management Reporting and Disclosure Act. Specifically, businesses would have to disclose the names of, and fees paid to, attorneys and consultants who advise them on union-organizing activities. In turn, attorneys and consultants providing such advice would be required to disclose their client lists and the fees they receive.
If that sounds like a road map for retaliation and strong-arming, with dangers for traditional attorney-client confidentiality, well, you’re getting the idea. Furchtgott-Roth says the department has evaded regulatory review by low-balling the proposal’s billions of dollars in costs. “The change has no basis in existing law or precedent.”
New Department of Labor regulations will require, on pain of serious criminal penalties, regular disclosures by lawyers, consultants, advisers, website developers, P.R. firms, pollsters and many others whose activities might persuade employees not to sign union cards. (Current regulations require disclosures only regarding consultants who actually meet with employees, as opposed to generating information that might reach them.) The result will be to give the Jimmy Hoffas of the world a road map to put legal pressure on (maybe even “take out“) a wide range of consultants and back-office employees in areas like safety, productivity management and general HR (say, employee-handbook writing), many of whose activities have predictable impact on bargainable issues and worker inclination to unionize. [Labor Union Report](& Legal Ethics Forum)
- Not headed to Gotham after all: “The RWDSU union was interested in organizing the Whole Foods grocery store workers, a subsidiary owned by Amazon, and they deployed several ‘community based organizations’ (which RWDSU funds) to oppose the Amazon transaction as negotiation leverage. It backfired.” [Alex Tabarrok]
- “NLRB reverses course and restores some sense to its concerted activity rules” [Jon Hyman, earlier]
- Among papers at the Hoover Institution’s conference last summer on “Land, Labor, and the Rule of Law”: Diana Furchtgott-Roth, “Executive Branch Overreach in Labor Regulation” discusses persuader, fiduciary, overtime, joint employer, independent contractor, federal contract blacklist, campus recruitment as age discrimination, and more; Price Fishback, “Rule of Law in Labor Relations, 1898-1940” on how reducing violence was a key objective of pro-union laws, anti-union laws, and arbitration laws; and related video; Christos Andreas Makridis, “Do Right-to-Work Laws Work? Evidence from Individual Well-being and Economic Sentiment” (“Contrary to conventional wisdom, RTW laws raise employee well-being and sentiment by improving workplace conditions and culture”) and related video;
- Relief coming on NLRB’s Browning-Ferris joint employer initiative? [Federalist Society panel video with Richard Epstein, Richard F. Griffin, Jr., Philip Miscimarra, moderated by Judge Timothy Tymkovich; Philip Rosen et al., Jackson Lewis; earlier]
- “Production company hires union labor after Boston officials allegedly threaten to withhold permits for music festivals. District court: Can’t try the officials for extortion because they didn’t obtain any personal benefit; the alleged benefits went to the union. First Circuit: The indictment should not have been dismissed.” [John K. Ross, IJ “Short Circuit,” on U.S. v. Brissette, earlier]
- In 1922 a brutal mob attack resulted in the slaughter of 23 strikebreakers in Herrin, Illinois. Maybe something that should be taught in schools? [Robby Soave, Reason]
The Democratic Party has selected as its DNC chair Thomas Perez, widely described as the Establishment choice. Perez didn’t give off much of an impression of moderation in the Obama cabinet, however, where he was a leading symbol of regulatory lawlessness, hauled up repeatedly by the courts for trampling employers’ rights. See, for example, Gate Guard (Fifth Circuit describes conduct of DoL as “vindictive,” “indefensible,” “bad faith”), the we-know-where-you-live “persuader” rule (blasted by ABA, enjoined by judge), and of course mid-level overtime (enjoined by judge). More: Dan McLaughlin (Perez’s manipulation of fair housing litigation); John Fund (hiring practices at DoJ civil rights division).
Some on the left are still blasting judges as activist for standing up to Obama administration assertions of executive power in the regulatory sphere. That might prove shortsighted considering what’s on the agenda for the next four years, or so I argue in a piece in Sunday’s Providence Journal.
I take particular exception to a Bloomberg View column in which Noah Feldman, professor at Harvard Law, assails federal district judge Amos Mazzant III for enjoining the Department of Labor’s overtime rule for mid-level employees (earlier). In a gratuitous personal jab, Feldman raises the question of “whether Mazzant sees an opportunity for judicial advancement with this anti-regulatory judgment” in light of the election results, though he offers not a particle of evidence that the judge, an Obama appointee, is angling for higher appointment under the new administration.
The problems with the overtime rule were both substantive and procedural. As I mention in the piece, “more than 145 charitable nonprofits signed a letter begging the department to allow more than a 60-day public comment period. It refused.” That letter is here (via, see Aug. 5, 2015 entry). I also mention that a court recently struck down the Department of Labor’s very bad “persuader rule” that would have regulated management-side lawyers and consultants; more on that from Daniel Fisher, the ABA Journal, and earlier.
After pointing out that many of the rulings restraining the Obama administration have been written or joined by Democratic-appointed judges, I go on to say:
Judges rule all the time against the partisan side that appointed them.
And we’ll be glad of that when the Trump executive orders and regulations begin to hit, and Republican-appointed federal judges are asked to restrain a Republican White House, as they have often done in the past.
We should be celebrating an energetic judiciary that shows a watchful spirit against the encroachments of presidential power.
Speaking of infringements on what is now the scope of attorney-client privilege, an Oregon law professor has proposed to make environmental protection part of lawyers’ ethical duties. [Daily Climate; Tom Lininger, “Green Ethics for Lawyers,” Boston College Law Review, 2016; Scott Greenfield] Some backers hope the idea will encourage lawyers representing the fossil fuel industry, in particular, to disregard conventional attorney duties of loyalty to clients; indeed, it might someday serve as grounds for them to be disciplined if they refrain from betraying client interests in various situations.
- Feared Philadelphia union boss launches program to use drones to surveill non-union worksites [William Bender, Philly.com (“got into a fistfight with a nonunion electrical contractor – and broke his nose – at a construction site at Third and Reed.”)]
- “We know where you live” continued: U.S. Secretary of Labor Thomas Perez’s “persuader rule” exposes lawyers and other professionals to intimidation, creates legal minefield for employers expressing opinion [The Hill, Jon Hyman, earlier]
- Richard Epstein on labor unions [Libertarianism.org podcast discussion with Aaron Ross Powell and Trevor Burrus]
- Actions protected as “concerted” by labor law include some taken by individual employee entirely alone, according to National Labor Relations Board, as it declares unlawful company policy against secretly taping conversations at the workplace [Jon Hyman, Whole Foods case]
- “Brace for more litigation based on feds’ new joint employment guidance, labor lawyers tell companies” [ABA Journal; Insurance Journal on Browning-Ferris; Daniel Schwartz; earlier] Applying NLRB joint employer notion to company like McDonald’s could blow up franchise business model, which some union advocates might not mind [Diana Furchtgott-Roth]
- Judge Merrick Garland shows great deference to NLRB, except in cases where it has ruled for an employer [Bill McMorris, Free Beacon]