DOL Announces Final Rule for Reporting & Public Disclosure on All Fees Paid to Attys & Consultants
March 23, 2016
Exception for Legal Advice is Extremely Narrowed To Force Disclosure For Any Legal Assistance To Employer in Maintaining Nonunion Status
The U.S. Department of Labor (“DOL”) will publish in the Federal Register on March 24 a new rule that requires employers, and their attorneys and consultants, to file with DOL, for public disclosure, all agreements and all payments to attorneys and consultants for providing advice and assistance for the purpose of maintaining nonunion status. The new Rule reverses 57 years of law that law firm and consultant assistance to employers on how lawfully to maintain nonunion status was exempt from such reporting under the “legal advice” exception of the Labor Management Reporting & Disclosure Act of 1959. The new Rule marks a huge victory for organized labor.
Court challenges to this new Rule are expected. Unless enjoined by a court, the new Rule applies to all such agreements, advice, and payments for same, as of July 1, 2016.
What Agreements and Payments Must Be Reported
Any attorney or consultant activity which as the object or purpose of dissuading employees from unionizing, including:
- Drafting of union campaign literature, speeches, audio-visual presentations, or website content;
- Drafting counter-organizational talks or talking points for supervisors to meet with employees in groups or individually;
- Meeting with supervisors or management to manage their counter-organizational strategy;
- Training supervisors in counter-organizational conduct;
- Coordinating or planning counter-organizational campaign;
- Establishing counter-organizational policies to inhibit union activity; and
- Planning personnel actions or disciplines to impact union activity.
“Legal Advice” Exception Vastly Limited
The Final Rule reverses the law that employers enlisting attorneys or consultants for expert advice on how to lawfully campaign against unionization-given the technicalities of the NLRB restricting same-was subject to the “legal advice” exception of the statute’s reporting and disclosure requirements. Now, all conduct is reportable as to verbal or written agreements to provide those services AND the fees paid for those services. All will be publically reported-meaning, for instance, that unions will access that information to report to voters what the employers are paying attorneys and consultants to persuade voters to vote against unionization. The exception for non-reportable legal advice is now suddenly extremely limited too, for instance:
- Explaining the law, but not for the purpose of persuading maintenance of nonunion status;
- Reviewing employer-prepared counter-organizational literature for lawfulness and grammar, but not to revise for the purpose of editing to achieve or enhance persuading against unionization; Advising regarding legal decisions or course of conduct;
- Representing the employer in legal proceeding or collective bargaining negotiations. Employers’ activities in buying “off-the-shelf” counter-organizational literature not customized for the employer, or attending trade association seminars for groups of employers on maintaining nonunion status are exempted from the Final Rule.
We will report more developments as this unfolds. For any questions, please contact David Fortney or Steven Semler of FortneyScott.
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On May 19, 2025, the Department of Justice (DOJ) announced a new Civil Rights Fraud Initiative, which will utilize the False Claims Act (FCA) to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws. Violations of the FCA can result in treble damages and significant penalties. Deputy US Attorney General Todd Blanche issued a memorandum instructing DOJ attorneys to file FCA claims against recipients of federal money if a recipient knowingly violates civil right laws and falsely certifies compliance with Title IV, Title VI, and Title IX of the Civil Rights Acts of 1964. The memorandum states that the FCA is also implicated whenever federal funding recipients and contractors certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin. The memorandum provided the following example as violating the FCA: Accordingly, a university that accepts federal funds could violate the False Claims Act when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions. The Initiative will utilize the FCA to investigate and pursue claims, and will be co-led by the DOJ’s Civil Division’s Fraud Section and the Civil Rights Division. Finally, the DOJ strongly encourages private parties “to protect the public interest by filing lawsuits and litigating claims” under the FCA—reminding the public that successful FCA claims will result in the reporting party receiving a share of the financial damages that are imposed again FCA violators. FortneyScott will continue to monitor these developments. If you have any questions, please reach out to your FortneyScott attorney.
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