Anti-union disclosures defended

Rule no threat to free speech, U.S. replies to state-filed suit

In response to an Arkansas federal lawsuit challenging the recent expansion of financial disclosure rules targeting anti-union activities, the U.S. Department of Labor argues the change is fair and in the public interest.

The department’s 64-page response to the suit was filed late Thursday in federal court in Little Rock where, on March 30, state and federal industry groups led by the Associated Builders and Contractors of Arkansas filed the first lawsuit in the nation challenging the new requirements.

Like similar lawsuits that quickly followed in Minnesota and Texas, the Arkansas suit alleges that the expansion of the Labor-Management Reporting and Disclosure Act of 1959 is unconstitutional. Previous administrations interpreted the law to require businesses to file reports whenever they hired consultants to “directly persuade” employees, while spending on “indirect persuasion” didn’t have to be revealed.

Under the department’s changes, indirect persuasion — such as hiring a consultant to write anti-union talking points — would also be subject to disclosure.

While the plaintiffs maintain that the new rules violate their First Amendment rights of free speech and association, and say it would undermine attorney-client privilege, the department’s response downplayed those concerns, saying the rule “requires reporting and disclosure of information under certain circumstances, but does not prohibit or require any particular behavior.”

The department adds that “rather than threatening anyone with any sort of inappropriate harm, the Rule supports the public interest and is supported by fundamental equitable considerations.”

The department said that for more than 50 years, Section 203 of the Act has required certain reports to be filed when employers hire industrial relations consultants, lawyers and other contractors to work behind the scenes to help employers persuade employees to agree with employers’ views about unionization and collective bargaining.

It argued that while the law also requires unions and their cohorts to comply with extensive reporting requirements, the plaintiffs are focusing on the obligations of “persuaders” who work to support management.

While the plaintiffs complain that the expanded rule goes beyond the scope of the 56-year-old law, disregarding the intent of the Congress that drafted it, the department contends the change is consistent with the original legislative intent behind the law; namely, by taking the less-intrusive stance of requiring public reporting of relevant information instead of restricting actions of management or unions, or restricting the content of either side’s messages.

“The Rule simply requires employers and labor-relations consultants (including attorneys) hired by employers to report certain information about their financial arrangements and activities,” the department’s response asserts.

The department noted that third-party “persuaders” might try to influence employees through direct or indirect methods. It said examples of the latter could include creating flyers, leaflets, speeches and correspondence for management to use with employees.

“The statutory purpose for requiring public reporting of the identities of third parties engaged in ‘indirect persuader’ activity, and the terms under which they agree to engage in it, is to ensure that employees know the source of information they receive about such topics, so that they are not under the misimpression that materials and messages created by third parties were created by their supervisors, coworkers or employers,” the department’s response states.

Attorneys for the Labor Department argue that the plaintiffs cannot demonstrate that they will be irreparably harmed without an injunction halting enforcement of the expanded rule, “because they cannot demonstrate a likelihood of success on the merits, and because the public interest in the Rule remaining in effect outweighs any putative harm.”

U.S. District Judge Kristine Baker has scheduled a hearing for 9:30 a.m. May 9 to consider the plaintiffs’ request for an injunction that would remain in place until the claims in the lawsuit are decided.

Aside from the Associated Builders, the other plaintiffs include the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, the Arkansas Hospitality Association Inc., the National Association of Manufacturers, the Coalition for a Democratic Workplace and the law firm of Cross, Gunter, Witherspoon and Galchus.

The defendants are U.S. Labor Secretary Thomas Perez and Michael J. Hayes, director of the department’s Office of Labor-Management Standards.