The House Hearing on the New Persuader Rule Didn’t Persuade Anyone

Published May 12th, 2016 -  - 05.12.1612


In this era of divided government, Republicans in Congress understand that if they want to enact legislation, they need to compromise.  But, the Republicans in the House of Representatives seem to have little interest in compromising.  So, instead of trying to write bills that have a chance of becoming law, they prefer to spend their time holding grandstanding hearings.  The latest hearing conducted by the Education and the Workforce Committee was called “The Persuader Rule:  The Administration’s Latest Attack on Employer Free Speech and Worker Free Choice.”

The persuader rule is an attempt by the Department of Labor to close a loophole in the reporting scheme authorized by the 1959 Labor Management Reporting and Disclosure Act.  That law requires consultants to file reports with the DOL if they enter into an agreement “where an object thereof is, directly or indirectly, to persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing.”  With the exception of a regulation enacted on the last day of the Clinton Administration and quickly repealed by the Bush Administration, the DOL has only required reporting where consultants communicate directly with workers, but not where they draft scripts or otherwise prepare materials for an employer’s anti-union campaign.  In other words, the DOL had effectively rewritten the statute to delete the reference to “indirect” persuasion.  In fairness to the DOL, the statute is not a model of clarity since it contains an exemption for giving advice.  The Obama DOL issued its initial Notice of Proposed Rulemaking in June 2011, and then spent the last four years trying to figure out where “advice” ends and “indirect persuasion” begins.

Reasonable people can disagree about how effective the DOL regulations are likely to be, and whether they will lead to overreporting or underreporting of persuader activity, but there was nothing reasonable about the House hearings.  I’ve written about these House hearings before.  Once again, this hearing held true to form.  First, you have the conclusory title.  There’s not even a pretense that this is an attempt to help the committee members reach an informed judgment.  Then, you have the unbalanced witness list.  The Republicans choose three witnesses and let the Democrats invite one.  Finally, just to make sure that the Republicans won’t let any contrary information sway their opinions, they refuse to even ask any questions of the witness that the Democrats have invited.

The Republican Chairman of the Committee, Phil Roe issued a press release asserting that the rule will “restrict employer speech, stifle worker free choice, and harm small businesses.”  The theory is that somehow no consultant will engage in activity that could trigger a disclosure obligation.  But if a consultant has built a business on running anti-union campaigns, there is no reason to think the consultant would choose to go out of business rather than file disclosure reports.  During the Bush Administration, the Labor Department dramatically increased union disclosure obligations.  Now, unions need to disclose every expenditure of more than $5,000.00.  The witness invited by the Democrats, Jonathan Newman, a lawyer who represents unions, pointed out that unions now disclose all payments to lawyers above that threshold and yet there is no evidence that unions have been unable to obtain counsel.  Of course, when Newman spoke the Republicans on the committee practically plugged their ears and sang “I can’t hear you.”

I don’t harbor many illusions about the possibility of bipartisanship when it comes to labor-management issues, but even though I’ve seen this movie before, it’s still depressing to watch it play out.  In the real world, when unions and management sit at the bargaining table, at least they listen to each other, and occasionally find common ground.  In a more rational world, one could imagine members of Congress acknowledging that if unions are going to be subjected to stepped-up financial disclosures, it makes sense to require employers to disclose more regarding their spending on anti-union persuader activities.  But, that would appear to require a different cast of characters in Congress.  In the meantime, the irony is that the persuader industry is built on the notion that a well-crafted message can change people’s minds, yet the hearing showed just how difficult that task can be.

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