The Department of Labor has been taking aggressive steps to prevent employers from exercising their rights to provide information to their employees during union campaigns. Under the Labor-Management Reporting and Disclosure Act, employers must disclose the amounts they spend on consultants either attempting to influence their employees about the choice of unionization or providing information to employers about certain union activities.
The consultants must also report—not only for that employer, but for all their labor clients. Not surprisingly, this is a considerable deterrent to the free flow of relevant information to employees. Under the current interpretation of the Act, which has stayed fairly consistent since 1959, employers who hire lawyers to advise them about how to avoid unlawful communications have not had to report. This is due to the “advice” exception.
This exception has allowed employers to get the advice they need without having to file the burdensome disclosures required by the Department of Labor for paid consultants, and has enabled law firms to avoid having to face a federal requirement to violate their duties of confidentiality to their clients if they give legal advice during union campaigns.
The Obama administration, through the DOL’s Office of Labor-Management Standards, has begun the process of changing this interpretation by narrowing the advice exception. The rulemaking process is lengthy, and may face barriers in a Congress where the majority in the House is Republican.
Meanwhile, OLMS has begun a new campaign of sending intimidating letters to law firms who enter appearances in representation cases pending before the National Labor Relations Board. The letters “remind” the firms that there are reporting obligations and, of course, tell the firms that their identities are now known to the Department of Labor enforcers. Here is an excerpt from one such letter.
Information obtained by OLMS from the national Labor Relations Board (NLRB) indicates that you have identified yourself as the representative of _______ an employer who is a party to a petition for a representation election to be conducted by the NLRB _____. As such, you may have Form LM-20 and Form LM-21 reporting obligations is you have engaged or will engage in persuader or information-supplying activities pursuant to your agreement or arrangement with the employer. OLMS has sent a similar letter informing the employer of its potential Form LM-10 reporting obligations.
[Identifying information removed.]
This is the first time, to my knowledge, that an agency of the federal government has contacted law firms simply on the basis of their entering an appearance in a case before a tribunal. The threat is obvious, and this is even before the regulations have been changed. What will happen to attorney-client privilege if and when the advice exception is vitiated remains to be seen. Employers, law firms, and associations need to be concerned about this effort.