March 25, 2016

U.S. Department of Labor Publishes New Persuader Rule

Holland & Knight Alert
Frederick D. Braid

The U.S. Department of Labor (DOL) published on March 23, 2016, its controversial "persuader" rule concerning labor relations activity that will force many employers and their law firms to file reports annually with the federal government. The forms will reveal the relationship between employers and their labor law firms, including information about fees and disbursements in connection with labor relations and employment law activity that might be viewed as influencing the actions of employees regarding union activity. The effective date is April 25, 2016, but the new interpretation will apply only to prescribed activity taking place on or after July 1, 2016.

Essentially, the DOL is revising its interpretation of a federal statute that has been in place for more than 50 years. These new reporting obligations will require reporting information that many feel interferes with attorney-client relationships. For this reason, the American Bar Association has gone on record as opposing the regulation in its current form. Many also feel that, aside from the attorney-client relationship issue, the change in the interpretation of the applicable law is unreasonable and not supported by the law. If allowed to stand as currently promulgated, those who fail to comply will be subject to both monetary (maximum $10,000) penalties, as well as imprisonment (up to one year).

It is anticipated that there will be legal challenges to the DOL's action, and once there is a better understanding of the anticipated litigation, Holland & Knight will provide details in a timely manner. If the new regulations remain in effect following those challenges, we will ensure that clients have all of the necessary information to meet their compliance obligations.   

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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