May 30, 2017

Trump Administration, Senate Take Action To Address Costly Labor Regulations

Last Tuesday, the U.S. Department of Labor (DOL) sent to the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) a new proposed regulation that would get rid of the Obama administration’s persuader rule, which the Metals Service Center Institute (MSCI) has long opposed. 

The OIRA will now review the proposed rule. Once approved by OIRA, DOL will publish the proposal in the Federal Register and open it up to public comment. 

As Connecting the Dots readers may remember, the persuader rule altered the advice exemption under the Labor Management Reporting and Disclosure Act (LMRDA), effectively interfering with both employers’ access to legal advice on labor matters and attorney-client privilege. Under previous law, if an employer hired an outside consultant, including an attorney, to persuade employees with respect to their rights under the National Labor Relations Act, both the employer and the consultant were required to file extensive reports with DOL under the LMRDA and related regulations. There was, however, an exemption to the reporting requirement for advice, under which reports were not required if the consultant or attorney does not communicate directly with employees. This exemption allowed employers to seek routine legal and other advice without triggering the reporting requirements. The Obama administration’s rule, which the DOL now seeks to undo, greatly narrowed this advice exemption, thereby discouraging employers, and small employers in particular, from seeking legal representation or other expert advice during the course of a union campaign. 

In November 2016 in National Federation of Independent Business, et. al. v. Perez, the U.S. District Court for the Northern District of Texas permanently halted the final Obama administration persuader rule. Two other lawsuits also had been filed against the rule, one in Minnesota and one in Arkansas. Rather than appeal the Texas court's decision, DOL has decided to rescind the rule in its entirety, which is why the Trump administration is rewriting it now. 

The Coalition for a Democratic Workplace (CDW) will file comments on the proposed rule. MSCI is a member of CDW and will support these efforts. Click here to learn more about CDW’s and MSCI’s advocacy efforts on this matter. 

In related news: 12 U.S. senators last week introduced legislation, S. 1217, the Representation Fairness Restoration Act, that would reverse the National Labor Relations Board’s 2011 “micro-union” decision, which allowed labor unions to form individual bargaining units within the same company consisting of as few as two or three workers. As Senate Health, Education, Labor and Pensions Committee Chairman Johnny Isakson (R-GA), who is sponsoring the bill, explained, S. 1217 would reinstate the nearly 80-year-old standard for determining which groups of employees should constitute an appropriate bargaining unit in the workplace. MSCI supports this legislation and over the past several years also has worked with its allies at CDW to reverse the micro-union ruling. Click here to learn more.