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GOP Looks to Protect Union-Busting Firms From Transparency Rule

Republicans criticized a regulation that will force employers to disclose ties to outside union-busting advisers.

US Rep. Phil Roe (R-Tennessee) testifies at a hearing on May 12, 2009. (Photo: House Committee on Education and the Workforce)

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Republicans criticized a Department of Labor regulation that will force employers to disclose ties to outside union-busting advisers.

Rep. Phil Roe (R-Tenn.), the Chairman of a House labor subcommittee, convened a hearing Tuesday, calling for the elimination of the so-called “Persuader Rule.” The measure took effect this week, seeking to shed light on the opaque anti-union consulting industry.

“I think this needs to be stopped now and it should be bipartisan,” Rep. Roe said during the proceedings, claiming that the new regulation stifles employer free speech and attorney-client privilege.

The Persuader Rule clarifies a 1959 labor law that required bosses to report to the federal government whenever they use consulting firms to directly thwart a union drive. It works to close a gap in the interpretation of the statute known as the “advice exemption” that allowed employers to avoid disclosure of indirect assistance, like strategy-planning and the provision of written materials and video.

“For too long, union avoidance persuaders have been able to operate in the shadows due to this loophole,” Rep. Jared Polis (D-Colo.) said in opening remarks supporting the regulation.

“Working men and women deserve to know who their employer is hiring and how much the employer is spending to discourage them from joining a union,” he added.

In a statement defending the rule, DOL borrowed a famous line from The Wizard of Oz — “Pay no attention to that man behind the curtain” — to refer to union-busting firms that offer services through the advice exemption.

“If you believe in what an outside expert drafted for you to say to your employees, if you were willing to pay the outsider to help you say it, then open the curtain and reveal who scripted the message and managed its delivery,” the department added.

Testifying at the hearing was labor lawyer Jonathan Newman who spoke to the necessity of the rule, stating that consultants were well aware of the shortcomings in the law, and exploited it by disguising their anti-union campaigns as mere “advice.”

“That is not advice,” Newman said. “That’s drafting the game plans, that’s choosing the plays to call, and that’s directing management to carry them out.”

He added that “these anti-union campaign are a product sold by a large anti-union consulting industry in the United States.” Newman gave an example of one firm that offered a 100 percent money back guarantee if the union drive wasn’t stopped.

According to the AFL-CIO, 82 percent of employers will seek the assistance of an outside firm to derail an organizing effort. Rep. Mark Pocan (D-Wisc.), a member of the subcommittee, attested to the prevalence of the industry. As the owner of a unionized printing shop, he claimed he gets weekly mailers hawking anti-organizing services.

“Clearly there is a very big business in union-busting,” he said.

Bill Robinson, the former president of the American Bar Association, also testified on Wednesday, echoing the concerns of GOP lawmakers that the persuader rule would undermine attorney-client privileges.

To enforce the new Rule,” Robinson claimed in written testimony, “the Department of Labor will have to inquire into all advice and communications passing between the lawyer and her/his client on the subject of labor relations, and perhaps other employment-related topics.”

Newman countered the argument, stressing that the rule only requires reporting of the identity of the client, a description of the nature of services, and any fee arrangements. It does not require disclosure of legal advice employers receive.

Newman added that the transparency requirements are no different than the additional reporting that lawyers who offer lobbying services have to comply with, and that several courts have held that such requirements do not violate attorney-client privilege.

“Saying something over and over again doesn’t make it true,” he added.

Although the Persuader Rule took effect this week, it will apply to all agreements and arrangements beginning on or after July 1.

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