The U.S. Department of Labor has enacted a new rule that will, according to the agency, require reporting of employer-consultant, or “persuader” agreements “to complement the information that unions already report on their organizing expenditures, resulting in better information for workers making decisions on whether or not to form a union or bargain collectively.”

The National Federation of Independent Business (NFIB) and the National Association of Home Builders (NAHB) disagree and have filed a lawsuit, along with the Texas Association of Business, the Texas Association of Builders, and the Lubbock Chamber of Commerce, against the DOL in the United States District Court, Northern District of Texas, Lubbock Division. The business groups maintain that the rule violates the First Amendment’s guarantee of freedom of speech and right of association. Also, according to the plaintiffs, the rule violates the Due Process Clause of the Fourteenth Amendment and the Regulatory Flexibility Act (RFA).

In a joint statement, the NFIB and NAHB said the DOL’s new union persuader rule “violates business owners’ First Amendment rights, making it nearly impossible to consult with legal counsel when facing union organizing.”

Ed Brady, chairman of NAHB and a home builder and developer from Bloomington, Ill., said that the rule is fundamentally unfair because it requires employers to report to the DOL whether and when they consult with a lawyer to discuss union organizing. The unions, on the other hand, aren’t encumbered by any such requirement.

“DOL’s final persuader rule is another example of regulatory overreach that will impose far-reaching reporting requirements on employers and their consultants and result in significant monetary and legal implications for home building firms,” said Brady. “This lawsuit is necessary to maintain long standing policy on what union-related communications between employers and attorneys remain confidential.”

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