Last week, the public comment period closed on the Obama Labor Department’s proposed regulatory change to alter a 1959 law that would make employers and their service providers (attorneys and various consultants) file financial disclosure statements and make personal information public, all in order to give union bosses hit lists of individuals and companies to target. Prior to the closing of the public comment period, there were nearly 6,000 comments—4,000 of which came within the last ten days or so as more people became aware of the union-backed proposed rule.
So far, it has been remarkable that almost no attention has been given to this issue on Capitol Hill. However, it may be that very few have actually understood the DOL proposal’s unprecedented overreach and broad ramifications until these last few weeks. Yet, since so many of the law firms who donate to high-ranking Democrats (as well as to Republicans) will likely be deemed ‘persuaders’ and be required to report their incomes under the DOL’s proposal, there may yet be some interest raised in Congress over the issue.
Nevertheless, in addition to many of the comments from individuals urging the union appointees within the Department of Labor to drop this unbelievably broad proposal, several larger groups expressed their harsh criticism through their comments.
Among those comments, Over 1500 came from persons affiliated with the Society of Human Resource Management. Outside of attorneys, with 250,000 human resource professionals, SHRM members are probably the single largest grouping of individual service providers who will be affected by the DOL’s proposed change.
What follows below are some excerpts [with emphasis added] of a few of the comments received by the Department of Labor:
In its 31-page comment to the Department of Labor (which also goes into the legislative history of the 1959 law), SHRM was pointedly criticized the DOL proposal, stating:
SHRM disputes the so-called contemporary research as not so contemporary; in some cases it is marred by obvious bias as well as flaws in methodology. In all cases it fails to mention, let alone consider, the actions of organized labor as a root cause of employer response. Even if there is some validity to this “research” (which seems to not be the case), it fails to take into account organized labor’s actions. Organized labor hardly has been quiescent these last decades. Employers have been subjected to the “corporate campaign” tactics, where unions undertake whatever means necessary, lawful and unlawful, to inflict enough damage to the target employer’s business so that it will accept the union without a government supervised secret ballot election. [p.3]
The research cited by the Division in support of the proposed change contains flaws which support the need for independent inquiry into the current labor relations climate. For example, No Holds Barred: The Intensification of Employer Opposition to Organizing (“No Holds Barred”) is quoted extensively in the NPRM in support of the need for increased reporting. This document on its face raises serious questions as to its usefulness:
The study itself states that it gathered information only from talking to lead union organizers, not from the employees and not from employers…. [p.15]
In addition to calling into question the Department of Labor’s unquestionably union-biased “research,” SHRM also called out the effects of the DOL’s proposal on businesses, large and small.
SHRM is concerned that the Division’s proposed interpretation will encompass activities far removed from any actual or even potential organizing. SHRM as an organization is devoted to assisting its membership in developing initiatives to improve employee retention, morale and productivity. These initiatives can, among other things, include employee surveys, policy changes, and training. Sometimes an object or a part of an object of these types of initiatives is to prevent union organizing even when there is no union activity. Improving morale of employees in particular has the side effect of reducing the possibility an employee will go outside of his or her employer to seek assistance. [p. 27]
You can view SHRM’s entire 31-page public comment here.
Though it took no position on non-attorneys’ potential reporting requirements, the American Bar Association weighed in with its “serious concerns” about the potential loss of attorney-client privilege.
The ABA’s position here is important because on many labor & employment matters, it abstains because there is typically not a consensus between management-side and employee-side attorneys. This issue, however, touches all attorneys and is necessary, in the ABA’s words , to defend “the confidential client-lawyer relationship” and would impose an “unjustified and intrusive burden on lawyers and law firms and their clients”.
The rule is still in its proposed stage, but the ABA’s input here could be quite important for another reason as well. The ABA’s involvement in the “red flag” rules was crucial to getting that rule overturned. Time will tell if the ABA’s involvement here will have a similar impact.
[Given that even the law firm of the legal team for the Democratic National Committee would also be impacted by the Department of Labor’s proposal (as would large Democrat-leaning law firm Akin Gump, Nancy Pelosi’s second largest contributor), the ABA’s involvement may what ultimately gets the union appointees in the Department of Labor to see the unintended consequences of their overreach.]
In a strongly-worded rebuke of the DOL’s proposal, the Coalition for a Democratic Workplace stated in its 29-page comment:
The Labor Department’s proposed rules are anti-employer, especially anti-small business, and, perhaps most significantly, anti-employee. Indeed, the proposal, when taken in concert with the NLRB’s proposed “ambush” election procedures, amounts to a radical attempt by the Executive Branch to shift the balance of private sector labor relations, in defiance of the neutral policies established by Congress over many decades.
The Department’s proposal is contrary to the plain language and congressional purpose of the LMRDA, conflicts with the National Labor Relations Act (“NLRA”), and is unconstitutionally vague. Moreover, the Department has failed to provide reasoned justification for its sweeping changes, which depart from more than 50 years of uninterrupted precedent both within the Department and in the courts. The proposed rules will interfere impermissibly with the attorney-client relationship, will interfere with the right of trade associations to communicate with their employer members, and will interfere with the ability of employers to obtain much needed advice from their peers, their lawyers and experienced labor relations consultants.
Furthermore, the proposed rules do not comply with the requirements of the regulatory rulemaking process. Indeed, the proposed changes go beyond the legitimate scope of administrative rulemaking, and are so significant and substantive that only Congress could properly enact them. Coming on the heels of the failure of unions to obtain passage of the Employee Free Choice Act (“EFCA”), this proposed “no advice” regulation, combined with the NLRB’s nearly simultaneous proposal for “ambush” Representation-Case rules, is but a thinly veiled attempt to circumvent Congress and implement “back door” EFCA. [p. 3]
Indeed, the proposed rules are designed to ensure that employers—especially small business employers—are effectively denied critical legal counsel and entirely legitimate management training by associations and other consultants. [p. 3]
The US Chamber of Commerce also weighed in on the biasness of the DOL’s proposal in its 25-page comment, stating:
As part of its campaign for radical amendments to American labor law, organized labor and its allies have fabricated a narrative that portrays the long decline in private sector union density in the United States as the result of flawed National Labor Relations Board (NLRB or Board) processes and employer campaigns. According to this narrative, employers have become increasingly aggressive in campaigning against unions and routinely employ coercive, illegal, and otherwise deplorable tactics in order to defeat union attempts to organize. Organized labor attempts to buttresses this narrative with numerous studies or reports of dubious credibility. [p. 2]
In addition, at a time when the Labor Department should be focusing on policies that will lead to economic growth and job creation, it is a travesty that instead the Department is investing resources in policy changes that will not create a single new job, but will instead create a further drag on job creation. Furthermore, we agree with President Obama’s recent statement that “We should have no more regulation than the health, safety, and security of the American people require.” Unfortunately, this proposal fails that test. [p. 3]
Nor is the proposed rule limited to labor-management relations consultants. The proposed rule is so far-reaching in its scope and implications that an interior decorator who is engaged by an employer to recommend office furnishings, arrangements, lighting and paint colors to create a pleasant and productive work environment, could trigger the proposed reporting and disclosure requirements if the intent in the mind of either the employer or the service provider involves the purpose of persuading employees in any way (for or against) regarding the exercise of their rights to organize and to bargain collectively (e.g., the employer directs the decorator to make his shop a more pleasant workplace than the union shop down the street). [p. 4]
This last example is not out the realm of possibility, given how broadly the Department of Labor drafted the definition of what could constitute ‘persuader activity,’ and the Chamber explores other possible seemingly innocuous scenarios (like the attending of a seminar) that could suddenly become reportable to the Department of Labor.
While none of the comments reviewed addressed the physical danger that the DOL’s proposal could lead to if firms that provide security guards or replacement workers are required to disclose their personal information—which could include the individual guards and/or replacement workers—hopefully, enough pressure will be placed on the Department of Labor to reconsider this dangerous and unprecedented overreach.
“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776