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Witnesses Warn “Persuader” Rule Harms Workers and Small Business Owners

The Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), held a hearing today to examine the U.S. Department of Labor’s “persuader” rule. Finalized in March 2016, this partisan rule vastly restricts the long-standing “advice” exemption under the Labor-Management Reporting and Disclosure Act, imposing onerous and costly requirements on employers and forcing them to report virtually all contact with advisors on union-related matters.

Concerns have been raised that the rule will undermine the ability of employers to communicate with their employees during union elections and deprive workers of the information they need to decide whether joining a union is best for them.

“Unfortunately, this administration has spent more time advancing the interests of Big Labor at the expense of American workers and employers, and the Department of Labor’s ‘persuader’ rule is the latest example,” Chairman Roe said. “This new regulatory scheme may boost union dues, but it will do absolutely nothing to boost our economy or expand opportunities for the middle class.”

“As is often the case with this administration’s flawed policies, small businesses will bear the brunt of the burden,” Chairman Roe continued. “But let me be clear. America’s workers will be hurt the most.” Witnesses shared his concerns, and testified about how the rule will restrict employer free speech, stifle worker free choice, and harm small businesses.

“The employers most affected will be the many, many small businesses that provide the largest share of jobs in the United States,” said Bill Robinson, former president of the American Bar Association (ABA). “Large corporations may be able to turn to their in-house legal departments for legal advice on labor relations issues … Small businesses, on the other hand, will have no such option … In short, the right of small business to receive confidential legal advice on labor relations matters will be gone.”

Current ABA President Paulette Brown reiterated the organization’s long-standing concerns in a letter earlier today opposing the final rule. The ABA warns that the rule “could seriously undermine both the confidential client-lawyer relationship and employers’ fundamental right to counsel.”

Witnesses argued that without access to legal advice, small businesses will struggle to navigate a maze of complex labor rules.

“Often, small businesses are not knowledgeable about the nuances of labor rules,” said Sharon L. Sellers, a human resources consultant who advises small businesses. “The final ‘persuader rule’ is yet another challenging regulation which increases the possibility of employers running afoul of collective bargaining rights and obligations. This is why the persuader rule is so damaging and can have a chilling effect on communication.”

These concerns were echoed by Joseph Baumgarten, a labor attorney, who emphasized how the rule will negatively impact workers. “By thus chilling employers’ free speech, the Rule will preclude employees from hearing the ‘other side’ of the story—an alternative view and information that a union would not present. As a result, the employees will be deprived of an opportunity to discover their employer’s views, and they will be less informed about the important choices they face,” Baumgarten said.

“The decision to join or not join a union is an important one that has a direct impact on the livelihood of millions of families,” Chairman Roe said. “It’s critical that workers are able to hear from both sides and receive all the information they need to make a fully informed decision. But this rule will stifle debate and restrict worker free choice—with the sole purpose of stacking the deck in favor of organized labor.”

That’s why Rep. Bradley Byrne (R-AL) recently introduced a resolution under the Congressional Review Act that would block the Department of Labor’s “persuader” rule. As Rep. Byrne said upon introduction, “The rule is ultimately just another attempt by the Obama administration to upset decades of legal precedent and put the interests of Big Labor bosses over what is best for American workers. Congress must act to stop this flawed rule from moving forward.”

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