We are looking at another hot summer of litigation over the Obama Administration’s attempts to bring a modicum of regulation to the workplace. Currently, the Department of Labor’s Persuader Rule, enacted pursuant to federal labor law, is being reviewed in three different district courts and in Congress. Since 1959, the Labor Management Reporting and Disclosure Act (LMRDA) has required employers to disclose certain expenditures used to persuade employees in their choice of a bargaining representative. Once the DOL’s final revised rule implementing the mandate of the statute was published, employers and their law firms quickly brought suit to block the rule. The House Committee on Education and the Workforce held a hearing on April 27 which included three witnesses opposed to the rule, and one supporting it. Republicans in the House have introduced a Congressional resolution challenging the revised Rule as well.
Federal courts in three different states will soon decide whether the revised rule should be enjoined because it exceeds the DOL’s authority or violates the U.S. Constitution. Apart from the merits of these challenges, there have been several complaints about how the revised rule’s requirement to report arrangements to provide “indirect persuasion” might cause attorneys to violate their ethical duty of confidentiality. The former president of the American Bar Association testified at the April 27 hearing that the revise Persuader Rule would “undermine the confidential attorney-client relationship.” The problem with these concerns, as I and numerous other labor law and legal ethics professors have written in a letter to the Committee, is that the revised Persuader Rule can coexist comfortably with the ABA Model Rules of Professional Conduct.