Office of Labor-Management Standards (OLMS)
Employer-Consultant Reporting: Interpretation of the “Advice” Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act: Notice of Proposed Rulemaking
The Department of Labor’s Office of Labor-Management Standards (OLMS) published on June 21, 2011, a notice of proposed rulemaking (NPRM) to revise the interpretation of a statutory provision relating to OLMS’s administration and enforcement of the employer and labor relations consultant “persuader” reporting requirements of section 203 of the Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. 433.
See: http://www.gpo.gov/fdsys/pkg/FR-2011-06-21/pdf/2011-14357.pdf. LMRDA section 203 requires, in part, the disclosure of agreements or arrangements between employers and labor relations consultants pursuant to which the consultant undertakes or agrees to undertake activities that have a direct or indirect object to persuade employees concerning whether or not to exercise, or the manner of exercising, their rights to organize and bargain collectively. Additionally, disclosure of such agreements or arrangements is required when the consultant undertakes to supply information to an employer concerning the activities of employees or a labor organization in connection with a labor dispute involving such employer. Employers and consultants disclose such agreements or arrangements on the Form LM-10 (Employer Report) and the Form LM-20 (Agreement and Activities Report), respectively.
The reporting of persuader agreements is subject to section 203(c) of the LMRDA. This section states that neither an employer nor a consultant is required to file a report covering the services of a consultant “by reason of his giving or agreeing to give advice” to the employer. Section 203(c) also states that employers and consultants need not file reports by reason of representing an employer before any court, administrative agency, or tribunal of arbitration, or in collective bargaining. More information on employer-consultant reporting is available here.
The NPRM proposed a change in the interpretation of “advice” in section 203(c) of the LMRDA. Under the Department’s current “advice” interpretation, an employer-consultant agreement does not need to be reported if the consultant has no direct contact with employees and only provides to the employer (or its supervisors) advice or materials for use in persuading employees that the employer has the right to accept or reject. The Department is considering whether this interpretation of the advice interpretation is overbroad because, in practice, it excludes from reporting any agreement under which a consultant has no direct contact with employees, even though the consultant may have devised and orchestrated certain, or even all, aspects of activities with a direct or indirect object to persuade employees about their rights to organize and bargain collectively.
The NPRM concluded that the current interpretation of “advice” under section 203(c) resulted in significant underreporting of employer-consultant reporting under 203(a) and (b). Therefore, the Department sought to modify its interpretation of “advice” by limiting the definition of what activities constitute “advice,” and thus expanding those circumstances under which disclosure of employer-consultant persuader activities is required.
The NPRM proposed to adopt the plain meaning of the term “advice,” which, the NPRM proposed, is “an oral or written recommendation regarding a decision or course of conduct,” and contrasted that plain meaning with consultants’ activities that go beyond mere advice and have a direct or indirect object to persuade employees with respect to their statutory rights. Under the proposal, an agreement would be reportable in any case in which, pursuant to the agreement, the consultant engages in specific persuader activities, such as those illustrated in the instructions, regardless of whether advice is given. Persuader activities would include those in which a consultant engages in any actions, conduct, or communications on behalf of an employer that have a direct or indirect object to persuade employees concerning their rights to organize and bargain collectively. Reportable agreements or arrangements would include those in which a consultant plans or orchestrates a campaign or program to avoid or counter a union organizing or collective bargaining effort, such as through the specific persuader activities illustrated in the instructions.
The NPRM offered examples of persuader activity, which consisted of actions, conduct, or communications on behalf of an employer to persuade employees, and which would no longer constitute “advice.” Such examples included providing persuader material to employers for dissemination or distribution to employees; coordinating or directing the activities of supervisors or employer representatives to engage in the persuasion of employees; and drafting or implementing policies for the employer that have an object to persuade employees. The NPRM proposed that no report would be required if activities pursuant to an agreement or arrangement exclusively involve advice to an employer, such as when a consultant exclusively counsels employer representatives on what they may lawfully say to employees, ensures a client’s compliance with the law, or provides guidance on National Labor Relations Board (NLRB) practice or precedent. Additionally, no report would be required where the consultant exclusively provides representation to an employer before any court, administrative agency, or arbitration tribunal or in collective bargaining. However, if the reporting of an agreement is triggered, because pursuant to such agreement a consultant undertakes persuader activities, and “advice” is also performed as part of the agreement, the entire agreement or arrangement would be reported.
The Department also proposed revisions to Forms LM-10 and LM-20. The revisions would modify the content and layout of the forms and instructions to better outline the reporting requirements and improve their readability and utility. In addition, the Department proposed the incorporation of a checklist of activities that filers would use to identify covered persuader actions, conduct, or communications, as well as information-supplying activities.
Finally, the NPRM proposed that Form LM-10 and LM-20 reports must be submitted to the Department electronically, and provided a process to apply for an electronic filing exemption on the basis of specified criteria, which is a report filing regime similar to that used by filers of the Form LM-2 Labor Organization Annual Report.
Comment Period Closed: The comment period closed on September 21, 2011, and the Department is currently reviewing comments received.
For Further Information Contact: Andrew R. Davis, Chief of the Division of Interpretations and Standards, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution Avenue N.W., Room N-5609, Washington, DC 20210, olms-public@dol.gov, (202) 693-0123 (this is not a toll-free number), (800) 877-8339 (TTY/TDD).
Last Updated: 09-27-11
