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New Rules Proposed for Faster Union Elections and Broader Coverage of “Persuader” Reporting Requirements

Labor & Employment Update Fred Gants, David B. Kern, Jeffrey S. Piell, Dawn C. Valdivia

In what appears to be continued activism to alter established standards governing employer rights regarding union activities through rules and regulations rather than legislation, the National Labor Relations Board ("NLRB") and Office of Labor-Management Standards of the Department of Labor ("DOL") announced proposed changes on June 21, 2011 that would be significantly detrimental to employers if implemented. The changes would speed up the union election process and create impediments to employers' communication efforts by extending the onerous "Persuader" reporting requirements.

Quicker Elections

The NLRB, with Member Brian Hayes dissenting, has proposed reforms of the rules it follows before and after conducting a secret ballot election to determine if employees wish to be represented by a labor union. The stated purpose of its proposed amendments is "to reduce unnecessary litigation, streamline pre- and post-election procedures, and facilitate the use of electronic communications and document filing." The NLRB will hold a public hearing on July 18, 2011 - and possibly July 19, 2011 - to hear comments on its proposal, and interested parties have 60 days to submit comments, with 14 days for reply.

If the NLRB's proposed rules go into effect, they likely will result in speedier elections and compressed employer campaigns. The NLRB's current administrative practice is to hold an election no later than 42 days after the filing of the petition, which typically provides several weeks for an employer to conduct an election campaign in an effort to persuade employees to vote against unionization.

The proposed amendments would, among other things, change election rules as follows:

  • The biggest and most significant change calls for any bargaining unit hearing to be closed if the number of positions in dispute is less than 20 percent of the bargaining unit. Those issues would now be resolved through post-election challenges. Currently, these issues must be resolved before an election can occur. Almost all unit hearings involve numbers that low, and the issues often deal with whether "lead" workers are supervisors. Under the NLRB's proposed rule, an employer will have to go through a campaign and proceed to a vote without knowing whether those employees are in or out of the unit.

  • Each regional director of the NLRB would typically set a pre-election hearing to begin 7 days after a hearing notice is served and a post-election hearing 14 days after the tally of ballots. Even though each Regional Office of the NLRB has a set procedure for holding such hearings, the NLRB has stated that the parties cannot predict when a pre- or post-election hearing will be held because practices vary by each Regional Office.
  • An employer will have to produce a preliminary voter list, including names, work location, shift and classification, by the start of the pre-election hearing. Currently, a list of voters is not provided until after an election has been directed. The NLRB has stated that the current practice makes it difficult to identify and resolve eligibility issues at the hearing and before the election.
  • The parties would only be permitted to seek review of Regional Director rulings through a single, post-election request. Currently, the parties may request NLRB review of the Regional Director's pre-election rulings before the election.
  • The final voter list would be produced in electronic form when possible, and the deadline would be shortened to two work days. Currently, deadlines permit seven days after the direction of election for the employer to prepare and file a paper list of eligible voters.
  • Election petitions and notices, and voter lists could be sent electronically to speed up elections. NLRB regional offices could deliver notices and documents electronically rather than by mail and could directly notify employees by email when addresses are available. Currently, the NRLB and parties cannot file electronically or send representation case documents, including election petitions.

In short, the NLRB's proposed amendments to election rules would likely shorten the period between the petition for representation and the actual election. After Congress failed to pass the Employee Free Choice Act in its original form, the main feature of which would have eliminated many secret ballot elections in favor of card checks, compromises have been discussed, including incorporating the concept of "snap elections."

This is why the NLRB's lone Republican member, Brian Hayes, issued a vigorous dissent, stating this proposal would result in the type of "quickie elections" that have long been sought by union leaders. Member Hayes expressed concerns that elections could be held as soon as 10-21 days from the filing of a petition, giving employers less of a chance to make their case against union representation.

Expanded Definition of "Persuaders"

Also on June 21, the DOL published a Notice of Proposed Rule-making and Request for Comments on an issue that could have significant impact on employers facing union organizing campaigns and other union activities. Interested parties have until August 22, 2011 to file comments on this DOL proposal.

The proposed regulations deal with the "persuader" reporting requirements of the Labor-Management Reporting and Disclosure Act of 1959 ("LMRDA"). One aspect of the LMRDA requires employers to report to the DOL any agreement with a labor relations consultant or other independent contractor "where an object thereof, directly or indirectly, is to persuade employees to exercise or not to exercise . . . the right to organize and bargain collectively." Consultants or other independent contractors who enter into these agreements must also file reports with the DOL. The employer report must show the date and amount of payments and provide a full explanation of the payments to the consultant or independent contractor. The consultant or independent contractor's report must report all receipts and disbursements of any kind "on account of labor relations advice and services." See 29 U.S.C. § 433(b). The LMRDA contains an "advice exemption" as follows:

Nothing in this section shall be construed to require any employer or other person to file a report covering the services of such person by reason of his giving or agreeing to give advice to such employer. . . .

29 U.S.C. § 433(c).

The notice issued by the DOL on June 21 proposes to narrow the advice exemption and, thereby, require much broader reporting by employers, labor consultants, law firms and other entities that provide services to employers who are subject to union organizing campaigns or who assist employers by engaging in persuader activities in the context of an anticipated or actual strike.

For well over 40 years, the DOL has interpreted "persuader activities," which require reporting to arise only in those circumstances where the consultant or independent contractor directly meets with bargaining unit employees in an effort to persuade them to reject union representation.

Under the DOL's proposed rule, "persuader activities" that will trigger reporting requirements will now be much broader and will not turn on whether there is personal contact with employees. Persuader activities will include, but not be limited to:

  • Drafting, revising or providing a speech, written communications or other materials to an employer for presentation to employees.

  • Planning individual or group meetings designed to persuade employees to vote no.
  • Training supervisors or employer representatives to conduct individual or group meetings designed to persuade employees.
  • Coordinating or directing the activities of supervisors.
  • Developing employer personnel policies or practices designed to persuade employees to reject union representation.

In contrast, the advice exception would apply only in circumstances where a third party advises an employer on what it may lawfully say to employees, or where the advisor is ensuring that a client complies with the law or is providing guidance on NLRB practice or precedent.

As part of its proposed rule making, the DOL has published a revised form LM-20 to be submitted by consultants, and a revised form LM-10 to be submitted by the employers who retain such consultants. The new form contains a checklist of persuader activities, including the activities listed above as well as activities such as supplying information obtained from research or investigation concerning labor organizations, or conducting a seminar for supervisors or employer representatives. Significantly, the DOL's new rule makes clear that if a consultant engages in a combination of both persuader activities and advising activities, the persuader activities will take precedence and require reporting.

If the new DOL regulations are adopted, law firms and consultants will likely be required to chose between: (1) continuing to provide persuader services under the expanded definition and, therefore, submit the required reports; or (2) limiting their services to providing non-persuader advice only.

If you have any questions about the proposed changes, would like more guidance regarding the NLRB proposed election rules or "persuader" extension, or if you would like assistance in submitting a comment in response to this proposal, please contact Fred Gants at / (608) 283-2618, David B. Kern at / (414) 277-5653,  Jeffrey S. Piell at or (312) 715.5216, Dawn Valdivia at or (602) 229.5291 or your Quarles & Brady LLP attorney.