State Attorneys General Call on OMB to Reject Proposed ‘Persuader’ Rule

Filed in Codes and Regulations, Legal by on February 9, 2016 1 Comment

More than a dozen state attorneys general earlier this month sent a letter to the White House Office of Management and Budget (OMB) urging the agency to reject a U.S. Department of Labor (DOL) proposal that would undermine long-standing protections for confidential attorney-client communications and place undue burdens on small businesses.

DOL wants to narrow the exemption under the “persuader” rule for what union-related communications between employers and attorneys remain confidential.

Current law requires employers and legal consultants to report any arrangements to persuade employees regarding the right to organize or bargain collectively. There is also an “advice exemption” that says employers are not subject to reporting requirements as long as their lawyer or consultant just gives advice to the employer and does not communicate directly with employees.

DOL’s proposal, set to take effect in March, would significantly narrow the advice exemption by requiring employers to file publicly available reports to the government detailing these private exchanges.

NAHB believes the proposal will:

  • Eviscerate current attorney-client privilege by forcing employers to file reports to the government when they engage in private labor counsel with outside consultants and lawyers.
  • Have significant monetary and legal implications for home building firms.

Spearheaded by Alabama Attorney General Luther Strange and encouraged by NAHB, the letter to OMB stated that this proposed rule would “have a chilling effect on attorney-client confidentiality and employers’ fundamental right to counsel.”

The letter further urged OMB to “reject the proposed rule as drafted” and to reaffirm the longstanding interpretation of the advice exemption that has been effectively administered for more than 50 years under the Labor Management and Reporting and Disclosure Act of 1959.

For more information, contact Suzanne Beall at 800-368-5242 x8407.

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