(708) 946-9792 Inquire

Persuader Rule Undercuts Confidentiality

When the new “persuader rule” was issued last week the Department of Labor prominently displayed on its website a picture of a hand pulling back a curtain to illustrate the new requirement.

The reference is to the scene in the movie version of the Wizard of Oz where Dorothy’s dog Toto pulls back the curtain to reveal that the terrifying visage of the Great and Powerful Oz is nothing more than a small-town con man declaring: “Pay no attention to that man behind the curtain.”

“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,” Labor Secretary Thomas Perez said of the rule which was in the works for five years.

“Workers should know who is behind an anti-union message,” he declared. “It’s a matter of basic fairness.” DOL said estimates show that between 71% and 87% of employers use consultants to pursue union avoidance efforts.

Scheduled to go into effect on this April 25, the rule requires that employers make available to their workers the arrangements, agreements and payments they’ve made after July 1 with outside advisors – including attorneys – who provide management with information on how to deal with labor unions, especially when it comes to dealing with organizing campaigns.

The legal principle isn’t new. Since 1959 employers’ arrangements with “labor persuaders” had to be reported to the department only when a lawyer or consultant dealt directly with employees during the course of a union organizing campaign.

Until now attorneys’ advice was exempt as privileged and confidential attorney-client communication, provided the lawyers only offered legal advice and avoided direct communications with the employees’ bargaining unit.

The new rule requires both the attorney and the client to report all arrangements in which “an object” of the services is to persuade employees in the exercise of their right to engage in union organizing.

The rule requires the filing of annual reports revealing how much the client has paid for all “labor relations advice and services” – not just what had been considered persuader services. These reports must be filed electronically and, once filed, they become public records.

Attorneys Clifford Nelson, Jr. and Neil Wasser of the law firm of Constangy, Brooks, Smith & Prophete described a situation where this can become a real problem.

“For example, an attorney-developed campaign communication which was intended for client review and approval would not have been subject to any reporting requirements in the past. That same communication would now trigger the need to report, even if the attorney simply reviewed a letter or speech initially prepared by the client.”

Unions Crow, Employers Condemn

Employer groups are expected to challenge the new rule in court, and Republican lawmakers in Congress already have expressed their opposition.

Not surprisingly, the major unions are delighted. “This long-awaited rule will increase transparency about employers’ activities when they hire outside third parties to do their union busting,” said AFL-CIO President Richard Trumka.

“For years, big business has taken advantage of the nation’s broken system,” Teamsters President James Hoffa said. “They’ve paid millions to consultants and law firms to do the dirty work of union-busting and intimidating employees. In exchange, these same companies publicly could wash their hands of the whole thing. That’s over now.”

Employer groups in opposition include the U.S. Chamber of Commerce, National Association of Manufacturers, International Franchise Association and the Coalition for a Democratic Workplace, made up of more than 600 employer organizations.

National Retail Federation Senior Vice President for Government Relations David French commented, “NRF is concerned that the new standard will discourage employers from seeking advice of counsel in a broad swath of areas that have nothing to do with traditional persuader activities.”

“The end result will be a chilling effect on simple legal advice regarding employee or collective bargaining issues. Small retailers will be the first to suffer, and Big Labor will profit from this muzzling of free speech.”

Retail Industry Leaders Association vice president for government affairs Kelly Kolb promised RILA will work with Congress to reverse the rule, which he said discourages employers from hiring outside counsel to ensure compliance with labor laws.

Labor law is complex and employers rely on outside counsel in an organizing campaign to comply with the morass of rules and regulations, Kolb noted. “DOL is putting employers in a no-win situation where seeking the guidance they need will almost certainly be used against them by organizers.”

Firms Bar Applicants For Social Media Use

More than one-third of companies have disqualified a job candidate in the past year because of concerns about information found on social media or from an online search, according to the Society for Human Resource Management.

Candidates also were disqualified for illegal activities and discrepancies on applications, among other reasons, the SHRM employer survey found. Two out of five organizations (39%) allowed applicants to explain information of concern, an increase of 13% compared to 2011.

“Social media is another way recruiters verify applicants’ employment history and ensure that they are still viable applicants,” observes Evren Esen, director of survey programs. “Social media is here to stay, so employers and employees are utilizing it in various ways throughout the job search process.”

Currently, 84% of organizations use social media to recruit and 9% plan to use it. While 89% use social media to post job advertisements three-quarters use it to contact candidates, and over two-thirds use it to search for passive or active job candidates.

Companies not using social media for recruiting cited concerns about legal risk (e.g., discovering protected characteristics such as race, religion, age, etc.) and lack of staff time as the top reasons.

Mobile recruiting is also a popular recruiting tool, with 66% of employers currently leveraging it.

“Smartphone popularity has exploded, so the use of mobile – for both employers and job seekers – is a natural evolution for recruiting using technology,” Esen explains. “Companies are adapting to technology and to workers’ interests and, in doing so, they are saving time.”

Employers adapted to mobile users by optimizing careers websites and job postings, adding mobile-enabled job applications and making career sections more prominent on company websites.

Furniture Makers’ 2015 Growth Good

Furniture manufacturers and distributors’ new orders increased 1% last December over December 2014 orders, according to the most recent figures released by the accounting firm of Smith Leonard.

December 2014 orders had been 15% higher than December 2013, so the 1% increase last December over December of last year was still a pretty decent month, the company points out.

One-half of the survey participants reported increases for December, down slightly from November. The year ended up with a 4% increase over 2014 when orders were up 7% higher than 2013, “so overall the 2015 year was a decent year,” Smith Leonard said.

“But we did notice a bit of a slowdown as the year progressed. Several of the folks we talk with seemed to feel that business softened in the fourth quarter, though that was not true for everyone.”

In addition, about 53% of the survey participants finished the year with increased orders, down from 74% reporting increases last year.

Shipments increased 5% in December 2015 compared to December 2014. Last December, shipments also were up 6% over December 2013, making the 2015 numbers look even better.

Year-to-date, shipments were up 6% over 2014. 2014 shipments were also up 6% over 2013. Shipments were up for some 61% of the participants, down slightly from last month.

Backlogs fell 4% from November as shipments outpaced orders. Backlogs were also down 4% from last December, but December 2014 backlogs were 17% higher than December 2013 backlogs.

Receivable levels were up 3% over December 2014 levels, in line with the 5% increase in shipments for the month and the 6% increase for the year.

Inventory levels were up 1% over November but remained 7% higher than December 2014. Inventories were built early in 2015 and did not shrink as orders slowed.

Leave a Reply

Your email address will not be published. Required fields are marked *