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Union Busters and Their Friends on the Bench

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Speaking of Tom Perez, his Department of Labor helped even the playing field between unions and employers earlier this year by forcing employers to be transparent to their workers about the unionbusting firms they hire.

Earlier this year, the U.S. Department of Labor (DOL) passed the “persuader rule” that closed a major loophole, which has for decades allowed employers to hire attorneys and consultants to secretly assist them in what is politely referred to in the industry as “union avoidance.” The goal of this activity is to persuade and prevent workers from organizing unions.

The new rule did not try to make the consultants’ and attorneys’ practices illegal, or regulate the types of activities that employers and consultants could engage in; it was simply intended to provide transparency to workers who are the subject of a coordinated anti-union campaign. But last week, a Texas federal district court judge issued a nationwide injunction prohibiting the DOL from implementing the rule.

The persuader rule reinterpreted the “advice” exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), which had only required disclosure when employers hired outside consultants who directly communicated with employees. Under the previous interpretation of the exemption, the vast majority of employers who hire labor consultants—sometimes referred to as “union busters”—and the consultants they hire have been able to evade their filing requirements and remain in the shadows by having these consultants work behind the scenes.

As a result, the workers are never privy to who is coordinating the anti-union campaign or how much their employers are spending on it. It is estimated that employers in 71-87 percent of organizing drives hire one or more consultants, yet because of the massive loophole in the law, only 387 agreements were filed by employers and consultants.

Good idea, right. Well, sure, except for that Texas judge issuing an injunction against it at the behest of right-wing Texans and, oddly, the American Bar Association.

The new persuader rule, which covers all agreements and payments after July 1, was intended to close this loophole. The rule requires employers who hire anti-union consultants (and those consultants hired) to disclose to the DOL the agreement and the amounts paid. It would not require disclosure of what the consultants said or any legal advice sought. It is akin to a requirement that political campaign ads disclose who is paying for the ad so that people know who is behind the message they are receiving.

But now, under last week’s injunction, all of that is in jeopardy.

“This was one of the most one-sided orders I have ever seen,” explains Seattle University School of Law Professor Charlotte Garden. “The court found every one of the theories brought by the plaintiffs likely to succeed.”

The suit was brought by the National Federation of Independent Business, the Texas Association of Business, the Lubbock Chamber of Commerce, the National Association of Home Builders, the Texas Association of Builders, and a group of GOP-controlled states. Some of these organizations were concerned that their current activities of providing anti-union seminars and materials would require them to file reports identifying themselves as labor relations consultants.

Perhaps the most surprising group to take a side in this case was the American Bar Association (ABA), whose mission is “To serve equally our members, our profession and the public by defending liberty and delivering justice as the national representative of the legal profession.” The ABA cited attorneys’ ethical rules for their opposition to the DOL Rule, and said, “by imposing these unfair reporting burdens on both the lawyers and the employer clients they represent, the proposed Rule could very well discourage many employers from seeking the expert legal representation they need, thereby effectively denying them their fundamental right to counsel.”

This coalition of business and attorney groups and states brought forward a number of arguments, from the DOL lacking authority to pass the rule to the rule exceeding the DOL’s estimated compliance costs by $59.99 billion over 10 years. (The DOL estimated the rule would cost all employers and consultants a total of approximately $826,000 per year; the plaintiffs estimated it at $60 billion over 10 years.) Additionally, in line with the growing use of the First Amendment against government regulation of business, the plaintiffs argued that the rule violated the employers’, lawyers’, and consultants’ free speech, expression and association rights. The Judge concluded that some union busters may not offer their services as freely, and some attorneys may leave the field, if their identities and the terms of their arrangements were disclosed.

This is the sort of case that is probably going to be adjudicated over the next few years going up the ladder, possibly all the way to the Supreme Court. And as we know, voting is a consumer choice and Hillary Clinton doesn’t make me feel all warm and fuzzy inside so I am going to vote for Jill Stein to show those Democrats. If that means Trump gets elected, then it’s totally that neoliberal Hillary’s fault when Trump’s judges rule in favor of corporations in cases like this.

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