June 2017 Updates in Labor and Employment Law

By Krysta M. Mitchell - Seaton Peters & Revnew

June 13, 2017

The U.S. Department of Labor Proposes Reconsidering the “Persuader Rule”

Yesterday, June 12, 2017, the U.S. Department of Labor, now headed up by President Donald Trump appointee Alexander Acosta, published a Notice of Proposed Rulemaking to rescind the so-called “persuader rule”. The March 24, 2016 rule would have required employers to annually report agreements with third parties where the purpose of the agreement is to dissuade employees from supporting unions (“persuader activities agreements”).  Consultants would have had to report persuader activities agreements within 30 days; and consultants who enter persuader activities agreements would have to report payments from employers for all “labor relations advice and services.”

The proposal, to rescind the persuader rule is part of the Department’s continuing effort to give more consideration to several important effects of the Rule on the regulated parties and the Department’s continuing effort to fairly effectuate the reporting obligations under the Labor –Management Reporting and Disclosure act of 1959, as amended. (LMRDA)  The LMRDA generally provides obligations to unions and employers to conduct labor- management relations in a manner that protects the rights of employees to exercise their right to choose whether to be represented by a union for purposes of collective bargaining.

The decision to rescind the rule, is also reflective of the business position that employers should be able to receive behind the scenes advice from lawyers and consultants on what to say to educate employees about unionization without either side having to report who said what.  The proposal will allow the Department more time to consider attorney-reporting obligations when completing “indirect” persuasion activities. The category of “indirect” persuasion includes activities such as developing employer personnel policies or practices; drafting, revising, or providing written materials for presentation; training supervisors or employer representatives to conduct individual or group meetings; and/or conducting a seminar for supervisors or employer representatives.

The proposal will not impact the disclosure requirements currently in effect.  Business groups have railed against the persuader rule, saying it violated employers' free speech rights and would present costly compliance issues.  The U.S. District Court for the Northern District of Texas issued a nationwide permanent injunction against enforcement of the rule on November 16, 2016.  Although the rule technically went into effect, its implementation was enjoined before its application became mandatory, and no reports were filed or are due under it.  The Department has continued to enforce the pre-existing interpretation of the advice exemption.  Doug Seaton and Tom Revnew of our firm represent Worklaw Network, the national consortium of management labor law firms, in the parallel case challenging the Rule in the Minnesota federal district. This case was heading to a hearing on a motion for summary judgement, but the injunction and the Department’s later change of position in favor of abandoning the Rule will likely mean that pursuing this motion will be unnecessary.

Employers are encouraged to respond to the Department’s request for comments. Comments on the proposal must be received on or before August 11, 2017.  Comments may be submitted through http://www.regulations.gov. Use the keyword “Advice Exemption” or “Labor-Management Standards” to locate the proposed rule.

Additional Noteworthy Updates

U.S. Secretary of Labor Withdraws Department of Labor’s Informal Guidance on Joint Employment and Independent Contractors:  On June 7, 2017, the U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors.  The guidance came down strongly on the side of finding an employment relationship as opposed to an independent contractor one.  Also, under that informal guidance, the test for joint employment is broader than the common law test and ensures that the scope of employment relationships and joint employment is as broad as possible.  Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker’s Protection Act as reflected in the department’s long-standing regulations and case law. 

Minnesota Governor Mark Dayton Vetoed the Preemption Act- the Uniform Labor Standards Act:  On May 30, 2017, Minnesota Governor Dayton vetoed a bill that would have prevented cities from enacting their own minimum wage and sick time ordinances. The bill, entitled the Uniform Labor Standards Act, was passed by the Minnesota House and Senate on May 24 and 25 and was presented to the Governor on Friday, May 26.  The Minneapolis Sick and Safe Time Ordinance will now go into effect July 1, 2017. The St. Paul Paid Sick and Safe Time Ordinance will go into effect July 1, 2017, for employers with 24 or more employees and July 1, 2018, for employers with 23 or fewer employees.

OSHA Electronic Reporting Requirements Delayed: On May 17, 2017, OSHA’s Injury and Illness Recordkeeping and Recording website announced a delay in the electronic reporting requirements.  OSHA is not accepting electronic submissions of injury and illness logs at this time, and intends to propose extending the July 1, 2017, date by which certain employers are required to submit the information from their completed 2016 Form 300A electronically. OSHA has not yet created a website for employers to submit electronic information.