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99–869 PDF 2016

THE PERSUADER RULE: THE ADMINISTRATION’S 

LATEST ATTACK ON EMPLOYER FREE SPEECH 

AND WORKER FREE CHOICE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH, 

EMPLOYMENT, LABOR, AND PENSIONS 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD IN WASHINGTON, DC, APRIL 27, 2016 

Serial No. 114–47 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: 

www.gpo.gov/fdsys/browse/committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

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COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Buddy Carter, Georgia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Carlos Curbelo, Florida 

Elise Stefanik, New York 

Rick Allen, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Rube ́n Hinojosa, Texas 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Hakeem S. Jeffries, New York 

Katherine M. Clark, Massachusetts 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Juliane Sullivan, Staff Director 

Denise Forte, Minority Staff Director 

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS 

DAVID P. ROE, Tennessee, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

Buddy Carter, Georgia 

Glenn Grothman, Wisconsin 

Rick Allen, Georgia 

Jared Polis, Colorado, 

Ranking Member 

Joe Courtney, Connecticut 

Mark Pocan, Wisconsin 

Rube ́n Hinojosa, Texas 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Takano, California 

Hakeem S. Jeffries, New York 

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C O N T E N T S 

Page 

Hearing held on April 27, 2016 .............................................................................. 1 

Statement of Members: 

Polis, Hon. Jared, Ranking Member, Subcommittee on Health, Employment, Labor, and Pensions ........................................................................... 4 

Prepared statement of ............................................................................... 5 

Roe, Hon. David P., Chairman, Subcommittee on Health, Employment, 

Labor, and Pensions ..................................................................................... 1 

Prepared statement of ............................................................................... 3 

Statement of Witnesses: 

Baumgarten, Mr. Joseph, Partner, Proskauer Rose, LLP, New York, NY .. 39 

Prepared statement of ............................................................................... 42 

Sellers, Ms. Sharon, President, SLS Consulting, LLC, Santee, SC ............. 56 

Prepared statement of ............................................................................... 58 

Newman, Mr. Jonathan, Partner, Sherman, Dunn, Cohen, Leifer & 

Yellig, P.C., Washington, DC ....................................................................... 66 

Prepared statement of ............................................................................... 68 

Robinson III, Mr. Wm. T., Member, Frost Brown Todd LLC, Florence, 

KY .................................................................................................................. 91 

Prepared statement of ............................................................................... 93 

Additional Submissions: 

Byrne, Hon. Bradley, a Representative in Congress from the State of 

Alabama: 

Letter dated April 25, 2016, from National Association of Home 

Builders (NAHB) .................................................................................... 132 

Letter dated April 26, 2016, from National Federation of Independent 

Business (NFIB) ..................................................................................... 130 

Letter dated April 26, 2016, from Retail Industry Leaders Association 

(RILA) ..................................................................................................... 131 

Letter dated April 26, 2016, from Chamber of Commerce of the 

United States of America ...................................................................... 152 

Jeffries, Hon. Hakeem S., a Representative in Congress from the State 

of New York: 

Poverty Rankings by State (2009) ........................................................... 125 

State Right to Work Timeline .................................................................. 127 

Unionization By State - Direct Union Membership ............................... 154 

Unionization By State - People Represented by Unions ........................ 156 

Mr. Newman: 

Appendix .................................................................................................... 159 

Mr. Polis: 

Letter from ABA Model Rules of Professional Conduct ......................... 143 

Letter from Attorneys ............................................................................... 145 

Dr. Roe: 

Prepared statement of Ms. Paulette Brown, President, American Bar 

Association .............................................................................................. 7 

Letter dated April 22, 2015, from Ms. Leslie Rultledge, Arkansas 

Attorney General, State of Arkansas ................................................... 20 

Letter dated April 26, 2015, from Ms. Kristen Swearingen, Vice 

President of Legislative and Political Affairs, American Builders 

and Contractors, Inc. (ABC) .................................................................. 38 

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THE PERSUADER RULE: THE 

ADMINISTRATION’S LATEST ATTACK 

ON EMPLOYER FREE SPEECH AND 

WORKER FREE CHOICE 

Wednesday, April 27, 2016 

U.S. House of Representatives 

Committee on Education and the Workforce 

Subcommittee on Health, Employment, Labor, and Pensions 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in room 

2175, Rayburn House Office Building. Hon. David P. Roe [chairman 

of the subcommittee] presiding. 

Present: Representatives Roe, Foxx, Walberg, Guthrie, Byrne, 

Carter, Grothman, Allen, Polis, Pocan, Wilson, Bonamici, Takano, 

Jeffries, and Scott. 

Staff Present: Bethany Aronhalt, Press Secretary; Andrew 

Banducci, Workforce Policy Counsel; Janelle Belland, Coalitions 

and Members Services Coordinator; Ed Gilroy, Director of Workforce Policy; Jessica Goodman, Legislative Assistant; Callie Harman, Legislative Assistant; Christie Herman, Professional Staff 

Member; Tyler Hernandez, Deputy Communications Director; 

Nancy Locke, Chief Clerk; John Martin, Professional Staff Member; 

Geoffrey MacLeay, Professional Staff Member; Dominique McKay, 

Deputy Press Secretary; Brian Newell, Communications Director; 

Krisann Pearce, General Counsel; Alissa Strawcutter, Deputy 

Clerk; Olivia Voslow, Staff Assistant; Joseph Wheeler, Professional 

Staff Member; Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; Pierce Blue, Minority Labor Detailee; Christine Godinez, 

Minority Staff Assistant; Carolyn Hughes, Minority Senior Labor 

Policy Advisor; Brian Kennedy, Minority General Counsel; Richard 

Miller, Minority Senior Labor Policy Advisor; and Marni von 

Wilpert, Minority Labor Detailee. 

Chairman ROE. A quorum being present, the Subcommittee on 

Health, Employment, Labor, and Pensions will come to order. Good 

morning, and I want to thank our witnesses for joining us today. 

We are here today to examine a new rule finalized by the Department of Labor and its impact on American workers and employees. 

I would like to start by saying now we are in the seventh year 

of the economic recovery, the slowest recovery in our Nation’s hisCEWDOCROOM with DISTILLER

2 

tory. Although we have made progress over the years, we have a 

long way to go for the economy to reach its full potential. 

Millions of Americans are still stuck in part-time jobs and what 

they really want and need is full-time work. Too many working 

families are struggling with stagnant wages, and the workforce 

participation rate is at its lowest point since the 1970s. 

These are very real challenges facing middle-class families and 

advancing responsible solutions to address them should be the top 

priority of this administration. Unfortunately, this administration 

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. 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. 

Under the guise of promoting fair and democratic union elections, the persuader rule upends over half a century of labor policy 

by changing the interpretation of the well-established ‘‘advice exemption’’ of the Labor-Management Reporting and Disclosure Act. When enacting the law in 1959, Congress wanted to ensure employers were able to receive basic legal advice on union-related 

matters in order to protect the ability of workers to hear from both 

sides of the debate. Now, over 50 years later, the administration 

is attempting to rewrite the law through executive fiat. 

There are far-reaching consequences for this dramatic change in 

longstanding labor policy. First, this extreme and partisan rule will 

chill employer free speech. Union elections are complex matters 

with a host of legal issues to navigate and understand. Many employers acting in good faith seek outside advice to ensure they are 

in compliance with the law when communicating with their employees about union elections. 

Under the persuader rule, they will face onerous, costly, and 

invasive new requirements that will force them to report virtually 

all contact with advisors, and undermine their ability to communicate with workers during union organizing campaigns. Adding insult to injury, union bosses remain exempt from the same requirements. 

As the American Bar Association has expressed, this is an attack 

on the fundamental right of employers to seek legal counsel. We 

are fortunate to have Bill Robinson, former president of the American Bar Association, with us today to discuss this concern in more 

detail. 

It is a concern shared by the State attorney generals across the 

country. As is often the case with this administration’s flawed policies, small businesses will bear the brunt of the burden. Large 

businesses have teams of in-house attorneys to make sense of the 

confusing and complex set of labor rules, but small businesses do 

not. 

With far fewer resources, small businesses will struggle to navigate the maze of Federal labor rules and requirements. Some will 

become tied up in bureaucratic red tape and mistakenly run afoul 

of the law while trying to do what is best for their employees. 

But let me be clear, America’s workers will be hurt the most. 

Union elections are not just complex legal matters. They are personal matters. The decision to join or not join a union is an imporCEWDOCROOM with DISTILLER

3 

tant one that has a direct impact on the livelihood of millions of 

American families, their paychecks, their benefits, and their work 

schedules. 

It is critical that workers are able to hear from both sides and 

receive all the information they need to make a fully informed decision. They have that right. This rule will stifle debate and restrict 

worker free choice, with the sole purpose of stacking the deck in 

favor of organized labor. 

As I alluded to earlier, the real shame in all of this is the administration’s priorities are completely out of step with the needs of 

the American people. It is time for the administration to focus on 

creating jobs and growing the economy instead of playing politics 

with policies that shape our Nation’s workforce. 

With that, I recognize Ranking Member Polis for his opening remarks. 

[The information follows:] 

Prepared Statement of Hon. David P. Roe, Chairman, Subcommittee on 

Health, Employment, Labor, and Pensions 

We are here today to examine a new rule finalized by the Department of Labor 

and its impact on America’s workers and employers. 

I’d like to start by saying that we are now in the seventh year of the economic 

recovery—the slowest recovery in our nation’s history. Although we’ve made 

progress over the years, we have a long way to go for the economy to reach its full 

potential. Millions of Americans are still stuck in part-time jobs when what they 

really need is full-time work. Too many working families are struggling with stagnant wages, and the workforce participation rate is at its lowest point since the 

1970s. 

These are very real challenges facing middle-class families, and advancing responsible solutions to address them should be the top priority of this administration. 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. 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. 

Under the guise of promoting fair and democratic union elections, the persuader 

rule upends over half a century of labor policy by changing the interpretation of the 

well-established ‘‘advice exemption’’ of the Labor-Management Reporting and Disclosure Act. When it enacted the law in 1959, Congress wanted to ensure employers 

were able to receive basic legal advice on union-related matters in order to protect 

the ability of workers to hear from both sides of the debate. Now, over fifty years 

later, the administration is attempting to rewrite the law through executive fiat. 

There are far-reaching consequences for this dramatic change in long-standing 

labor policy. First, this extreme and partisan rule will chill employer free speech. 

Union elections are complex matters, with a host of legal issues to navigate and understand. Many employers, acting in good faith, seek outside advice to ensure 

they’re in compliance with the law when communicating with their employees about 

union elections. But under the ‘‘persuader’’ rule, they’ll face onerous, costly, and 

invasive new requirements that will force them to report virtually all contact with 

advisors and undermine their ability to communicate with workers during union organizing campaigns. Adding insult to injury, union bosses remain exempt from the 

same requirements. 

As the American Bar Association has expressed, this is an attack on the fundamental right of employers to seek legal counsel. We are fortunate to have Bill Robinson, former president of the American Bar Association, with us today to discuss this 

concern in more detail. It’s a concern shared by State Attorneys General across the 

country. 

As is often the case with this administration’s flawed policies, small businesses 

will bear the brunt of the burden. Large businesses have teams of in-house attorneys to make sense of a confusing and complex set of labor rules. But small businesses don’t. With far fewer resources, small businesses will struggle to navigate the 

maze of federal labor rules and requirements. Some will become tied up in bureauCEWDOCROOM with DISTILLER

4 

cratic red tape and mistakenly run afoul of the law while trying to do what’s best 

for their employees. 

But let me be clear. America’s workers will be hurt the most. Union elections 

aren’t just complex legal matters, they’re personal matters. 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—their paychecks, their benefits, and their work schedules. 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. 

As I alluded to earlier, the real shame in all of this is that the administration’s 

priorities are completely out of step with the needs of the American people. It’s time 

for the administration to focus on creating jobs and growing the economy instead 

of playing politics with the policies that shape our nation’s workforce. And with 

that, I yield to Ranking Member Polis for his opening remarks. 

Mr. POLIS. Thank you, Mr. Chairman. Unfortunately, instead of 

holding a hearing today on supporting rules and legislation that lift 

our workers, like raising the minimum wage or giving workers the 

overtime pay that they have deserved, we are spending time attacking a very important disclosure rule, namely the persuader 

rule, that helps level the playing field between union organizing 

campaigns and companies with regard to disclosure requirements. 

When workers seek to organize and bargain collectively, employers often enlist the assistance of outside labor relations consultants 

known as ‘‘persuaders,’’ and that is who we are talking about here 

today. These are union avoidance consultants, perfectly legal, perfectly fine. What we are talking about today is the disclosure requirements around that. 

In fact, studies show this is a common practice. Employers hire 

union avoidance persuaders in as many as 87 percent of union organizing campaigns. 

Now, since its inception in 1959, the Labor-Management Reporting and Disclosure Act has required disclosure of both direct and 

indirect persuader activity. Starting in 1962, there was a loophole 

that was carved in the DOL’s interpretation of the law, resulting 

in employers and their hired consultants only reporting direct persuader activity like when a persuader communicates directly with 

employees, not the more common behind the scenes effort, which 

includes things like scripting the employer’s talking points, preparing videos, and organizing anti-union campaign plans, which is 

the lion’s share, the largest bulk, of indirect persuader activity has 

essentially gone unreported. 

For too long, union avoidance persuaders have been able to operate in the shadows due to this loophole. Workers have been kept 

in the dark about the activities of anti-union consultants, the costs 

of those anti-union campaigns, some of which could have even gone 

to raises for the employees. 

Working men and women deserve to know who their employer is 

hiring and how much the employer is spending to discourage them 

from forming a union. That is all the DOL persuader rule does. 

Essentially, it means the consultants and attorneys who are engaged in persuader activities and the employers who hire them 

must disclose their persuader agreements, a description of the services to be performed, including the amount the employer has paid 

for their services. 

CEWDOCROOM with DISTILLER

5 

This is really about leveling the playing field. As a general matter, unions already disclose far more information than is being required of employers. 

This is an example of union reports filed with the Department 

of Labor, which are often hundreds of pages long, regarding exactly 

how their union organizing campaigns are run, compared to the 

two pages under this persuader rule for the companies to disclose 

to the unions what they are doing with regard to indirect persuasion. 

I think we can have similar disclosure requirements on both 

sides. Transparency is not a union value, it is not a corporate 

value, it is an American value, and this rule furthers the cause of 

transparency in a labor organizing process. 

There are hardworking families in my district and in every district across our country that are working harder and harder and 

are struggling to make ends meet. What is happening is workers 

are having a harder time sharing in the growth of our economy, 

and income and wealth inequality is one of the greatest problems 

facing our Nation. 

This rule is a small step towards transparency, to make sure 

that workers and other stakeholders, like shareholders and others, 

are aware of indirect expenditures to fight off union organizing 

campaigns. 

I hope that this committee can make it possible for workers to 

come together and negotiate their fair share of economic growth because when we do and when working people organize, families do 

better, our economy does better, and our Nation does better. 

I yield back the balance of my time. 

[The information follows:] 

Prepared Statement of Hon. Jared Polis, Subcommittee on Health, 

Employment, Labor, and Pensions 

Today, we’re holding yet another hearing that shows the backwards priorities of 

the Majority. Instead of supporting rules and legislation that lift up workers, like 

raising the minimum wage or giving workers the overtime pay they deserve, Republicans are spending time attacking the Obama Administration’s persuader rule. 

When workers seek to organize and bargain collectively, employers often enlist 

the assistance of outside labor relations consultants – known as ‘‘persuaders’’ or 

‘‘union avoidance’’ consultants – to orchestrate and roll out professionally managed 

anti-union campaigns. Studies show that employers hire union-avoidance persuaders in as many as 87% of union organizing campaigns. 

Since its inception in 1959, the Labor-Management Reporting and Disclosure Act 

(LMRDA) has required disclosure of both direct and indirect persuader activity. Yet, 

starting in 1962, a loophole was carved into DOL’s interpretation of the law, resulting in employers and their hired consultants only reporting direct persuader activity 

– such as when a persuader communicates directly with employees. Since most persuaders operate behind the scenes – such as by scripting the employer’s talking 

points, preparing videos and organizing the antiunion campaign plan – the lion’s 

share of indirect persuader activity has gone unreported. 

For too long, union-avoidance consultants have been able to operate in the shadows due to this large loophole in the reporting requirements. Workers have been 

kept in the dark about the activities of anti-union consultants, whose words and tactics are being used to influence their decisions about union representation. Working 

men and women deserve to know who their employer is hiring and exactly how 

much the employer is spending to discourage them from forming a union. 

Under the DOL’s persuader rule, consultants and attorneys who engage in these 

persuader activities, the indirect activities – and the employers who hire them – 

must disclose their persuader agreements and a description of the services to be performed, including the amount employers paid for these services. 

CEWDOCROOM with DISTILLER

6 

Basic fairness dictates that workers should be able to know who is responsible for 

the information that is being shared with them during union organizing efforts. The 

DOL’s revised disclosure requirement means that working people will know who has 

crafted the message when there is a counter-union organizing effort in their workplace. Workers who are told that the company has no money to raise wages may 

be interested in knowing how much money their employer is spending on these outside union-avoidance consultants. 

Moreover, the Persuader Rule evens the playing field. As a general matter, most 

unions already must disclose far more information than is being required of employers and consultants under this Rule. Union reports filed with the Department of 

Labor can be hundreds of pages long. For example, this report, filed by AFL–CIO, 

is 187 pages long (point to report), compared to two pages that are required under 

the new persuader rule. 

Disclosures required under DOL’s final rule do not breach an attorney’s responsibility to maintain confidentiality regarding a client relationship. Under the ABA’s 

Model Rule of Professional Conduct, the Model Rules contain an exception that allows disclosures that are required by statute (e.g., LMRDA). 

There are hardworking American families in my district – and every one of our 

districts – that continue to work harder and harder, but are struggling to make 

ends meet. Workers no longer share in the growth of our economy, and income and 

wealth inequality is one of the greatest problems facing our nation. 

I applaud the Department’s final rule, and I will continue to call on my colleagues 

in Congress to once again make it possible for more workers to come together to 

organize and form a union – because we know, when working people do better, families do better, our economy does better, and our nation does better. 

Chairman ROE. I thank the gentleman for yielding, and I ask 

unanimous consent to insert a statement from the American Bar 

Association president, Paulette Brown, a letter from the State of 

Arkansas attorney general attaching an amicus brief filed by 10 

State attorney generals, and a letter from the Associated Builders 

and Contractors, all opposing the final persuader rule. Hearing no 

objection, so ruled. 

[The information follows:] 

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Chairman ROE. Pursuant to Committee Rule 7(c), all subcommittee members will be permitted to submit written statements 

to be included in the permanent hearing record and, without objection, the hearing record will remain open for 14 days to allow statements, questions for the record, and other extraneous material referenced during the hearing to be submitted in the official hearing 

record. 

It is now my pleasure to introduce our distinguished panel of witnesses. First, Mr. Joseph Baumgarten, partner, Proskauer Rose, in 

New York. Mr. Baumgarten is the co-chair of the firm’s Labor and 

Employment Law Department. Mr. Baumgarten represents publicly held and privately owned employers in virtually all areas of 

labor and employment law. Welcome. 

Ms. Sharon Sellers is President of SLS Consulting in Santee, 

South Carolina. As an HR executive, Ms. Sellers has directed HR 

functions for corporations covering the medical, manufacturing, 

government contracting, and services industries. She will testify on 

behalf of SHRM. 

Mr. Jonathan Newman is a partner in Sherman, Dunn, Cohen, 

Leifer & Yellig, P.C., here in Washington, D.C. Mr. Newman litigates regularly in U.S. District Courts, the U.S. Court of Appeals, 

State courts, and before the NLRB and other government agencies. 

Welcome, Mr. Newman. 

Mr. William ‘‘Bill’’ Robinson III, is a member of Frost Brown 

Todd in Florence, Kentucky. Mr. Robinson is a former president of 

the American Bar Association, and he signed the 2011 ABA letter 

objecting to the then-proposed persuader rule due to its threat to 

the attorney-client confidentiality. He will testify on his own behalf. 

Welcome to each of you. I will now ask our witnesses to stand 

and raise your right hand. 

[Witnesses sworn.] 

Chairman ROE. Let the record reflect the witnesses answered in 

the affirmative. You may take your seats. 

Before I recognize you to provide your testimony, let me briefly 

explain our lighting system. You have five minutes to present your 

testimony. When you begin, the light in front of you will turn 

green. With one minute left, the light will turn yellow. When your 

time is expired, the light will turn red. At that point, I will ask you 

to wrap up your remarks as best you can. Members each will have 

five minutes to ask questions. 

Mr. Baumgarten, you are recognized for five minutes. 

TESTIMONY OF JOSEPH BAUMGARTEN, PARTNER, 

PROSKAUER ROSE, NEW YORK, NY 

Mr. BAUMGARTEN. Good morning, Chairman Roe, Ranking Member Polis, and members of the subcommittee. My name is Joseph 

Baumgarten, and I am a partner with the law firm of Proskauer 

Rose and co-chair of Proskauer’s Labor and Employment Law Department. 

My firm has been practicing labor and employment law for more 

than 75 years, representing hundreds of employers in collective 

bargaining unionization and other matters. 

Thank you for the opportunity to participate in today’s panel on 

the Department of Labor’s persuader rule. 

CEWDOCROOM with DISTILLER

40 

For more than 50 years, labor relations practitioners functioned 

under clearly defined rules that were consistent with the statutory 

mandate of the Landrum-Griffin Act, and were, in fact, upheld by 

the courts. 

Advice to employer clients was not reportable. Direct communications with a client’s employees were reportable. This longstanding 

approach harmonized the various provisions in Sections 203 and 

204 of the statute. It permitted employers to obtain expert labor relations advice. It preserved the attorney-client privilege, allowed attorneys to satisfy their ethical obligations. 

The Department’s new rule represents a dramatic and radical 

change. The rule now requires reporting in circumstances where 

lawyers are merely giving advice to employers about personnel policies, preparing or revising material for an employer to distribute to 

its employees, or advising employers and their supervisors about 

how to communicate effectively about matters that are important, 

indeed, essential to employees. 

The inevitable result of this rule will be a chilling effect on 

speech. The loss of services will impact most acutely the small 

businesses with little or no in-house experience to guide them in 

what they can and cannot say to their employees. 

Those employers may refrain from saying anything at all, leaving 

unrebutted whatever message is being disseminated by the union. 

Employees will be deprived of an important voice expressing facts, 

views, and opinions. 

It is important to point out that there is considerably more at 

stake here than simply what happens in a union organizing campaign, although that surely is important. In fact, very little attention has been paid to the effect on unionized employers in collective 

bargaining. 

Let me briefly explain. Section 203(c) of the Landrum-Griffin Act 

could hardly be clearer that giving advice or engaging in collective 

bargaining on behalf of an employer is not persuader activity. 

Thus, communications in support of the employer’s bargaining proposals that are prepared for delivery at the bargaining table are 

and will continue to be exempt from reporting. 

Under the Department’s new rule, the same communications delivered to the employees in the bargaining unit at large in the form 

of a letter, a bulletin from management, would subject both the 

lawyer and the employer to an obligation to report. 

If that seems not to make sense, it is because the Department’s 

new rule takes a unitary process, that is collective bargaining, and 

artificially parses it into its component parts. At its core, everything that goes on in collective bargaining involves the art of persuasion. 

The art is practiced not just at the bargaining table but in every 

communication made by the employer and the union, from the first 

exchange of proposals to the final ratification of an agreement. 

The 2nd Circuit Court of Appeals made this point in a decision 

30 years ago: ‘‘Labor negotiations do not occur in a vacuum. The 

employees are naturally interested parties. During a labor dispute, 

the employees are like voters who both sides seek to persuade. 

Granting an employer the opportunity to communicate with its employees does more than affirm its right to freedom of speech, it also 

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aids the workers by allowing them to make informed decisions 

while also permitting them a reasoned critique of their union’s performance.’’ 

Note the court’s language. This is not just about protecting employer rights. It is about ensuring that workers can make informed 

decisions. 

Under the Department’s new rule, a lawyer can say to a client 

I can help you develop bargaining proposals, I can deliver those 

proposals for you at the bargaining table, I can explain them at the 

table, I can help draft the agreement itself. However, I cannot then 

also help you even write a letter to your employees explaining the 

basis for the proposals or urging ratification, or talking about what 

happens in the event of a work stoppage without becoming a persuader that requires us both to report. 

That is completely inconsistent with the statute. In fact, I submit 

to you it is nonsensical. 

For all of these reasons and others, I support H.J. Res. 87, Congressman Byrne’s effort to prevent this rule from taking effect. 

Thank you. 

[The statement of Mr. Baumgarten follows:] 

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Chairman ROE. Thank you. Ms. Sellers, you are recognized for 

five minutes. 

TESTIMONY OF SHARON SELLERS, PRESIDENT, SLS 

CONSULTING, LLC, SANTEE, SC 

Ms. SELLERS. Good morning, Chairman Roe and Ranking Member Polis. I am Sharon Sellers with SLS Consulting, headquartered 

in South Carolina. I am appearing today on behalf of the Society 

for Human Resource Management, or SHRM. Thank you for the 

opportunity to testify on the persuader rule that will impact both 

employers and employees. 

Mr. Chairman, let me paint the picture of a perfect storm. With 

the recent implementation of the National Labor Relations Board’s 

ambush elections rule, combined with changes to the joint employer 

standard, a new definition of a bargaining unit with new micro 

units, and now the persuader rule, the timing could not be worse 

for our Nation’s employers. 

Now more than ever it is critical for employers and employees to 

understand their rights and obligations under the Nation’s labor 

laws and regulations, especially our small employers. 

My organization, SLS Consulting, a human resources services 

and training firm, seeks to help these employers. 

I serve clients in all major industries with half of my clients in 

smaller organizations. As an HR consultant, I am brought in as an 

expert to assist managers with employee management issues, leverage effective practices, and assist in the compliance of laws and 

regulations. 

While I do not consider myself a persuader, the definitions in the 

new rule could very well affect my work, a perfect example of the 

unintended consequences of the rule. 

Consider this, in my supervisory training, a segment on union organizing is included to help educate supervisors on the signs of organizing activity as envisioned by the National Labor Relations 

Act. It is critical for supervisors in today’s workplace to recognize 

signs of union organizing and avoid any behaviors that could be 

considered unfair labor practices. 

For example, during supervisor training, employers are taught 

what I call ‘‘TIPS,’’ which define what supervisors can and cannot 

communicate to their employees under the NLRA. 

Herein lies the unintended consequences created by this rule, 

namely that stringent reporting requirements may deter many employers from seeking out labor compliance information training like 

mine. This is a serious concern for SHRM and its 275,000 members. That is why we support H.J. Res. 87. 

Some employers will likely object to potentially showing up on a 

report and refuse to work with a consultant who provides labor 

consulting services. Consultants will be placed in a challenging position to either abandon all indirect persuasion work for all clients 

or lose valuable clients. 

The stakes are high for noncompliance with the persuader rule, 

leading to criminal penalties. It is not just HR consultants who will 

be impacted. This rule negatively impacts all employers, including 

small employers, and their employees who do not have in-house 

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counsel or an HR department to advise them at a time when 

unions are increasingly targeting small employers. 

Mr. Chairman, one must not overlook how this rule will impact 

employees. SHRM believes that all employees and organizations 

benefit when supervisors are highly trained. If employers remove 

labor-related training, it is increasingly likely that more supervisors will be unprepared for the appropriate way to address union 

organizing activity, resulting in more complaints of unfair labor 

practices, which is harmful to both employers and employees. 

In addition, SHRM believes that the DOL has underestimated 

the cost and time burden placed on employers by this rule. Hundreds of thousands of organizations will be impacted or at least potentially impacted because even if an employer does not have to report, employers and consultants will still have to determine whether, in fact, they do need to report. 

In closing, our main concern is the clients I serve may avoid 

seeking my training if the services are now reportable under the 

rule. I believe training strong supervisors helps the entire organization succeed. The rule can only lead to further confusion and perhaps even more violations of the law, which not only conflicts with 

the objectives of the National Labor Relations Act, but also my underlying mission and my business to train strong supervisors for 

successful organizations. 

Thank you, Mr. Chairman. I look forward to your questions. 

[The statement of Ms. Sellers follows:] 

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Chairman ROE. Thank you, Ms. Sellers. Mr. Newman, you are 

recognized for five minutes. 

TESTIMONY OF JONATHAN NEWMAN, PARTNER, SHERMAN, 

DUNN, COHEN, LEIFER & YELLIG, P.C., WASHINGTON, DC 

Mr. NEWMAN. Thank you, Chairman Roe, Ranking Member Polis, 

members of the subcommittee. My name is Jonathan Newman, and 

I am a shareholder in the Washington, D.C., law firm of Sherman, 

Dunn, Cohen, Leifer & Yellig. I appreciate the opportunity to appear before the Subcommittee today, and I do so in my individual 

capacity. 

My law firm represents all types of labor unions, including the 

International Brotherhood of Electrical Workers, North America’s 

Building Trades Unions, and the Major League Soccer Players 

Union, among others. I have been a member of the Bar since 1994, 

and I have also been a member of the American Bar Association 

since that time. 

Justice Brandeis famously said, ‘‘Sunlight is said to be the best 

of disinfectants; electric light, the most efficient policeman.’’ The 

persuader rule is a rule of transparency; it sheds light through disclosure, closing a massive loophole that has kept workers in the 

dark about hidden efforts to deny them union representation. 

The LMRDA requires that when a labor relations consultant is 

retained by an employer to undertake activities or an object thereof, directly or indirectly, to persuade workers regarding their vote 

in a union election, that relationship and its terms must be disclosed. 

That requirement, however, is, as the Education and Labor Subcommittee found in 1980, a virtual dead letter because no reports 

had to be filed where consultants operate behind the scenes without dealing with employees face-to-face. Anti-union consultants are 

well aware of this loophole. 

Former consultant, Martin Jay Levitt, in his book, ‘‘Confessions 

of a Union Buster,’’ said, ‘‘As long as the consultant deals directly 

only with supervisors and management, the consultant can easily 

slide out from under the scrutiny of the Department of Labor.’’ 

In a typical consultant-run campaign, the consultant prepares 

written scripts, written materials for supervisors to hand out, produces anti-union videos, and prepares speeches for management to 

deliver in closed-door captive audience meetings that employees are 

required to attend or they will be disciplined. 

Consultants create a campaign and assert that the union is a 

third party outsider that will drive up the employer’s costs. That 

is not advice, Mr. Chairman. That is drafting the game plan, that 

is choosing the plays to call, and that is directing management to 

carry them out. These anti-union campaigns are a product sold by 

a large anti-union consulting industry in the U.S. 

Attached to my written testimony are examples of consultants’ 

advertisements. One firm even promises a money back guarantee 

claiming, ‘‘IF YOU DON’T WIN, YOU DON’T PAY.’’ 

The persuader rule will make transparent the consultant’s relationship so that workers may learn that the employer has itself, for 

example, retained a third party outsider to orchestrate its campaign. In short, the persuader rule will ensure that workers are no 

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longer kept in the dark, making the title of today’s hearing, ‘‘The 

Administration’s Attack on Worker Free Choice,’’ seem particularly 

Orwellian. 

Critics of the rule claim it is unfair because it requires employers 

and consultants to disclose but not unions, but unions have their 

own broad transparency obligations under the LMRDA. They must 

disclose, for example, the identity of the law firms and consultants 

they retain and report disbursements to those firms, no matter 

what the firms do, including if all they do is provide legal advice. 

Mr. Chairman, this is a four-page report that must be filed under 

the persuader rule by employers. This is the two-page report that 

persuaders would be required to file under the persuader rule. This 

is one of our clients’, the IBEW’s most recent LM–2 annual report. 

It is 150 pages long. This is the AFL–CIO’s most recent report required to be filed with the Department of Labor. It is hundreds of 

pages long. 

The ABA claims that the persuader rule interferes with the attorney-client privilege and conflicts with model rules of professional 

conduct. The ABA made those same arguments in 1959 when Congress enacted the LMRDA. Congress rejected them then and it 

should do so now. 

In addition, numerous courts have held that disclosing the information required by the persuader rule does not breach the attorney-client privilege. The rule is also consistent with State Bar ethics rules. The LMRDA is a Federal rule that trumps any conflicting 

State law governing any attorney conduct, and more importantly, 

ABA’s Model Rule 1.6 on which they rely does not apply to disclosures that are mandated by law. 

Finally, the persuader rule does not violate the employer’s or 

consultant’s right to free speech. The rule does not restrict any 

speech. In Federal election law cases, the Supreme Court has rejected First Amendment challenges to disclosure, finding that, 

‘‘Transparency enables the electorate to make informed decisions 

and give proper weight to different speakers and messages.’’ That, 

by the way, is from the Citizens United case. 

The persuader rule enables the electorate, in this case, workers, 

to decide whether to choose union representation, and allows them 

to make informed decisions and give proper weight to messages 

from their employers. 

Thank you, Mr. Chairman. 

[The statement of Mr. Newman follows:] 

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Chairman ROE. Thank you, Mr. Newman. Mr. Robinson, you are 

recognized for five minutes. 

TESTIMONY OF WILLIAM ROBINSON, MEMBER, FROST BROWN 

TODD LLC, FLORENCE, KY 

Mr. ROBINSON. Thank you, Mr. Chairman, Ranking Member 

Polis, and distinguished members of this subcommittee. Thank you 

for this opportunity to testify before you. 

I am here to express my intense concerns over the Department 

of Labor’s new so-called ‘‘persuader rule.’’ The new rule rejects the 

protection of confidentiality for attorney-client communications embodied in the advice exemption of the Labor-Management Reporting 

and Disclosure Act, as recognized by President John F. Kennedy’s 

administration in 1962, and consistently followed for more than 50 

years, until now. 

When the Department of Labor first proposed this new rule in 

2011, I wrote to the Department as president of the American Bar 

Association expressing the ABA’s concerns. That letter expresses 

ABA policy then and now. It is Attachment B to my written statement. 

Today, however, I speak only for myself, and I want to emphasize 

that. As Chairman Roe indicated, Paulette Brown, the current distinguished president of the American Bar Association, has submitted to this committee a written statement on behalf of the ABA 

expressing the ABA’s continued concerns about the new administrative rule. 

Many Bar associations have also spoken out against the new 

rule, and some of them are listed in Attachment A to my written 

statement. 

The overriding concern here is the best interest of clients, not the 

best interest of lawyers. In Upjohn Co. v. United States, decided in 

1981, the Supreme Court taught us that the purpose of the attorney-client confidentiality is, ‘‘To encourage full and frank communications between attorneys and their clients and thereby promote 

broader public interests in the observance of law and administration of justice.’’ 

Client confidences are protected by the ethical rules applicable to 

lawyers. Model Rule 1.6 prohibits lawyers from revealing any information relating to the representation of a client, unless the client 

gives informed consent or certain narrow exceptions exist. 

For over 50 years, the Department of Labor has consistently followed the Kennedy administration’s interpretation of the advice exemption. The Kennedy Administration’s exemption—interpretation 

rather—excludes from regulation and reporting all advice of attorneys to their employer clients. On the other hand, the act does not 

protect and does require reporting when an attorney communicates 

directly with a third party, namely the client’s employees. 

The new law abandons the Kennedy Administration’s bright line 

test. Instead, the new law substitutes a subjective arbitrary standard. This new standard administratively allows the Department of 

Labor to investigate any confidential communication to determine 

if that communication has the object to persuade the employees, 

even directly, to support the client’s position. 

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From what my labor partners tell me, few workplace decisions or 

communications are made in a vacuum without some concern for 

how employees may respond. 

For employers without a union, the employer may be pursuing 

the lawful objective of avoiding the union. For employers with a 

union, the employer’s lawful objective may be to maintain harmony 

in its relationship with the union and its members. In either case, 

the interaction between the law and the employer client’s goals are 

the labor lawyer’s responsibility to navigate in order to ensure legal 

compliance. 

Especially troubling here is the ethical dilemma created by enforcement of the new rule. How can labor lawyers defend against 

accusations that they have violated the new rule? There really is 

only one answer. Disclosure will be required as to the purpose and 

content of the otherwise confidential communications. 

The new administrative rule must not be allowed to, in effect, 

wipe out the statutory advice exemption that Congress expressly, 

purposely, and explicitly included in Section 203 of the Act. The 

rule of law in America has been built on the cornerstone of the client-attorney confidentiality, and unless defeated, the new administrative rule will undermine in the context of labor relations the 

confidentiality so essential to effective attorney-client communications. 

Your support and vote for Congressman Byrne’s House Joint Resolution 87 and for all other legislative efforts to defeat this rule are 

respectfully requested. Your leadership is needed. The labor law in 

labor law matters hangs in the balance. 

Thank you again for this special opportunity to address this subcommittee. 

[The statement of Mr. Robinson follows:] 

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Chairman ROE. Thank you, Mr. Robinson. I thank all the witnesses. I will now yield myself five minutes. 

Mr. Robinson, I want to start with you. In your long career as 

an attorney and certainly as president of the American Bar Association, have you ever had to disclose publicly information about 

your clients as will be required by this new rule? 

Mr. ROBINSON. Mr. Chairman, attorney-client confidentiality is 

the cornerstone of the rule of law. It has been so for 50 years in 

labor relations matters and beyond. The rule of law goes back to 

the 16th century. The rule of law is the key to ensuring good client 

advice so the client is enabled to comply with the law. That requires closed door, confidential, trustworthy advice to consider 

what is and what is not lawful. 

That is compromised and jeopardized with any rule that requires 

disclosure of this information. Lawyers are bound by these ethical 

rules. They go back, as I say, centuries. They are the cornerstone 

of the rule of law in this country. 

Chairman ROE. And have been upheld by the courts. 

Mr. ROBINSON. Over and over and over, as recently as a case in 

California, which has looked at this issue and has recognized how 

sacrosanct this attorney-client confidentiality really is in implementing and ensuring the rule of law. 

Chairman ROE. My concern is not labor law. My concern is the 

law in general. If we start down this slippery slope, where are we 

going to end if we dissolve attorney-client privilege? 

If you are my attorney, I feel like I can bear my soul with you 

in a closed door, and I can get good information back from you 

about what is in the best interest of my business, myself, and my 

employees, so I do not do something wrong. Am I right about that 

or wrong about that? 

Mr. ROBINSON. Let’s say you were accused of a crime or being investigated for a crime, and you came to me as a lawyer and wanted 

to discuss that with me, and I had to say to you at the outset, look, 

there is a new rule at work here and it may require that I disclose 

everything you are going to tell me. How much do you think you 

would tell me? Probably not very much. My ability to advise you 

on your legal rights, the best course for you to take, would be severely compromised. 

I think it is really clear if one appreciates and respects the significance and importance of client confidentiality to the rule of law 

that this is really a key issue. This is not about transparency. This 

is about ensuring that adequate advice is given to those who want 

to comply with the law, need to comply with the law, and need to 

be able to think out loud and explore options and opportunities to 

get the advice that assures they comply with the law. 

Chairman ROE. I think this is a frightening rule when you begin 

to think that 50 years from now, you could take this as precedent 

and take this slippery slope anywhere. I think this needs to be 

stopped now. 

It should be bipartisan because we are going to vote on a bill 

today on the House about the Internet, and the government being 

able to look at your emails over 180 days. It is bipartisan because 

this should affect and does affect all Americans. 

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Another question to any of the witnesses, why would an employer hire a consultant or an attorney during a union organizing 

campaign if this is the case? What benefit would it be? Ms. Sellers? 

Anyone? 

Mr. NEWMAN. Ask the union, to do what they do— 

Chairman ROE. I am asking Ms. Sellers. 

Mr. NEWMAN. I thought you said anyone. My apology. 

Ms. SELLERS. I believe with this rule employers will be less likely 

to contact labor attorneys or consultants, even when they are asking for advice. In my line of work, 50 percent of my clients are employers with less than 100 employees. Many of these people are not 

experts in union organizations. They are trying to run a business, 

many times wearing various hats, and they do not know this information, but still they certainly do not want to turn out on a form 

and get on the radar, they would be worried about having their 

name made public any time they ask any questions. 

So, I think they would refrain from asking the questions, which 

would really put them at a disadvantage, not only in the union organization for themselves but for the whole process, because they 

will not have the information. There could be inadvertent unfair 

labor practices, which could jeopardize the whole election process. 

Chairman ROE. Mr. Baumgarten, you said with 203(c) expanding 

this rule would have a chilling effect on free speech. 

Mr. BAUMGARTEN. Yes, that is right, Mr. Chairman, it would 

have a chilling effect. Let me say that in any policy situation where 

we are evaluating an agency rule, we must start with the language 

of the statute, and 203(c) is a broad exemption for advice, any kind 

of advice that is given. 

The reality of this situation is the LM–10 and the LM–20 obligations cannot be thought about without thinking about the LM–21 

as well, which is the roll-up report, and in the Department of Labor’s view that report requires disclosure of receipts received from 

any client—any client—who receives labor relations advice or services of any kind, even if not persuader advice. 

No client will want to be on that list, and no consultant or law 

firm will want to have that disclosure. 

Chairman ROE. My time has expired. I am going to yield to Mr. 

Polis. 

Mr. POLIS. Thank you, Mr. Chair. Mr. Newman, are you an attorney, a member of the Bar? 

Mr. NEWMAN. Yes, I am. 

Mr. POLIS. As such, do you have any concerns at all with regard 

to any conflict this rule has with the long and important tradition 

of attorney-client confidentiality? 

Mr. NEWMAN. I do not. What the rule requires is the identification of a client, fee arrangement with a client, the nature and scope 

of that client representation. That has been upheld by the 4th Circuit Court of Appeals, the 5th Circuit Court of Appeals, certainly 

no pro-union sentiment on that court, as well as the 6th Circuit 

Court of Appeals, and is not violating the attorney-client privilege. 

Mr. POLIS. It seems to me another precedent outside of the direct 

organizing realm is the additional disclosure requirements that attorneys who function as lobbyists have as well with regard to how 

much they are paid and for whom they lobbied. 

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Do you see that as an analogous requirement that also is no 

threat to attorney-client confidentiality, but is consistent with the 

rules of public policy just as this is? 

Mr. NEWMAN. I do. I also cited another statute in my written testimony that applies where an attorney is paid in cash, they have 

to disclose their client and the amount, et cetera. Mr. POLIS. So, as was briefly mentioned, the Labor-Management 

Reporting Disclosure Act does mandate a reporting obligation for 

labor consultants and employers, including those who work indirectly to persuade workers, and the Labor Department says there 

are zero reports from union avoidance consultants who indirectly 

persuade people not to organize. 

It has been alluded to there is a loophole. 

Mr. Newman, I wanted to ask you what exactly is this loophole 

that has allowed this to go on, contrary to legislative intent, contrary to the words of the legislation and the law, for the past 54 

years? How is the Department of Labor’s new rule more consistent 

with the actual law than the previous policy? 

Mr. NEWMAN. Sure. The statute applies to persuasion that is not 

only direct but indirect. The advice exemption has been interpreted 

from 1962 until 2000, and I will get to that, saying so long as the 

union buster or the persuader is behind the scenes and does not 

show his face and speak directly to employees, he does not have to 

report. In other words, he only has to report if he engages in direct 

persuader activity, leaving the word ‘‘indirect’’ out of the statute. 

In 2000, the Department of Labor took a different interpretation, 

similar to what they are taking now in the persuader rule. There 

was an election, obviously, in 2000, and the Department of Labor 

overturned that interpretation in 2001 and went back to that which 

existed from 1962. 

Mr. POLIS. So, before this rule, essentially the previous Secretaries of Labor and Departments of Labor have chosen to ignore a 

word that is in the statute, that is ‘‘indirect’’ consultants, is that 

your opinion? 

Mr. NEWMAN. Yes. They have ignored the statutory language and 

they have ignored the legislative history. 

Mr. POLIS. Now, let us get to the topic of why this can be important. Your testimony included an advertisement from a union 

avoidance firm where they actually talked about a money back 

guarantee if they do not successfully defeat the organizing effort. 

What are some reasons it might be important for workers to 

know about that kind of persuader arrangement or other kinds of 

examples of ways the consultants try to dissuade employees from 

joining unions? 

Mr. NEWMAN. In my experience, one thing that a consultant always does is script messages where the employer says to its employees we are one big, happy family, the union is a third party 

outsider that has no business coming into this workplace. They will 

also proclaim that this outsider union is going to drive up the employer’s costs and impede their ability to compete. 

When you have a money back guarantee, the consultant has skin 

in the game. So, it seems to me perfectly reasonable for the voters, 

the employees, to know, number one, their employer has hired a 

third party outsider to script their messages; number two, what 

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they are paying that consultant when they are saying at the same 

time they cannot afford a union; and, number three, the words 

from the supervisors are not the supervisors’ words, they are the 

words of the consultant that has skin in the game, that has guaranteed to the employer we will bust your union, we will defeat the 

union. 

Mr. POLIS. If, in fact, the fee was entirely contingent on success, 

which I understand is the case some of the time in these agreements, let us say arbitrarily it is $500,000, would the employees 

also know that were they to succeed and the company not to pay 

that $500,000, there would, therefore, be an additional $500,000 

available on an operating basis that the employees might be able 

to share in, in the form of raises and promotions? 

Mr. NEWMAN. Yes, they would. 

Mr. POLIS. A very tangible identification if a company is otherwise saying there are no resources available, it is clear in that case 

they would have saved X-dollars by losing the campaign, a great 

way for companies to save money by losing organizing campaigns. 

I yield back the balance of my time. 

Chairman ROE. I thank the gentleman for yielding. Dr. Foxx, you 

are recognized. 

Ms. FOXX. Thank you, Mr. Chairman, and I thank our witnesses 

for being here today. Mr. Baumgarten, with the new NLRB rules 

that shorten the time between union petitions and elections, do you 

feel employers are likely to require any more assistance in legally 

and effectively communicating with employees about both sides of 

the decision to unionize? 

Mr. BAUMGARTEN. Yes. One of the great myths that has been created is that employers lie in wait and plan and practice and hire 

consultants and hone their message months in advance of a petition filed with the NLRB. 

My experience and the experience of many of my colleagues has 

been just the opposite, that very often employers are very surprised 

to receive a representation petition, and that is particularly true 

for smaller employers who do not have the sophistication to really 

understand what may be going on in the workplace. 

We now have a regime which has already been alluded to that 

the NLRB has created an environment that makes it more and 

more difficult to effectively respond to a representation petition by 

virtue of the rules that preclude pre-election hearings, by virtue of 

the micro unit rules, and by virtue of the ambush election rules. 

An election can be held now in as little as 11 days from filing 

of the petition to the election. In general, I think the latest statistics show that it takes about 20 days or so down from 38 days prior 

to the ambush election rules last year. 

Employers are already behind the eight ball, so to speak, in respect of their ability to understand what is going on, to develop the 

message, to understand what is legal, to understand what is going 

to be effective, to understand what should be communicated, what 

is the message employees want to hear. 

There is, I think, a fundamental misunderstanding of what this 

rule will provide. When a company that does not have in-house experience and does not have prior experience with a representation 

campaign receives a petition, what do they do? 

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They call their lawyer and they say what is this? They find out 

what it is. The very first question, if not the first question then the 

second question, is what should I say to the employees? What 

should I say? 

The answer to that under this rule will be I cannot tell you because if I tell you, we will both become persuaders, and pending 

resolution of what goes on with the LM–21, which the Department 

has played hide-and-seek with, I, as a lawyer, may then have to 

disclose information, privileged information, about the identity of 

all of my other labor relations clients. That is an unworkable system. 

Ms. FOXX. Thank you very much. Ms. Sellers, I would like to go 

a little farther on the comments Mr. Baumgarten talked about. Let 

us talk a little bit about the impact on employees. Tell us about 

how an employer being better prepared and informed about labor 

issues benefits the employees. What are some of the unintended 

consequences of the new rule for employees? 

Ms. SELLERS. Thank you for the question. It is a very good question because my heart is in education of supervisors, and I know 

you have a wonderful background, also, in employee education. 

Supervisors that I normally deal with my small employers are 

not people that came from colleges with MBA degrees. As a matter 

of fact, most small employers cannot afford to hire the best and 

brightest with the biggest degrees. A lot of them grow their own 

and they have to hire them from within and, in many cases, they 

want to hire them from within. They have good people who are 

technical people, and now they have placed them in a supervisory 

role. They have no other knowledge. 

So, with my training, I work very hard to give them basic information, including the labor information, such as making sure they 

do not say the wrong thing that could eventually result in an unfair labor practice. 

Proper education of supervisors will result in an engaged workplace, where you will really have the sense—this sounds very 

naive—the truth is you will have much happier employees if you 

have well-trained supervisors, and as a result, you will have more 

successful organizations that will then create more jobs. 

Ms. FOXX. Thank you, Mr. Chairman. I yield back. 

Chairman ROE. The gentlelady’s time is expired. Mr. Pocan, you 

are recognized for five minutes. 

Mr. POCAN. Thank you, Mr. Chairman. Thank you to the witnesses. So, I guess I come to this from a little bit of an interesting 

perspective because I have a small union printing business, and 

about weekly, I get one of these mailers. I will be honest, I have 

not looked at them all that closely on the way to the recycling bin 

as I have got them. 

Clearly, there is a very big business in union busting, and I 

think maybe my perspective is slightly different in that while you 

are talking about these rules that are going to be so terrible for 

employers versus workers, you know, I come from Wisconsin, 

where recently we passed a law that made it harder for people to 

collectively bargain. We just passed a right to work law. 

I would say quite the opposite, this has been much more onerous 

on workers than it has been on employers. I guess I do not quite 

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understand the concern at some level when it gets to the persuading level versus the regular legal information level. 

I know you are all familiar with ‘‘Confessions of a Union Buster.’’ 

I am sure you all have a copy. Just the first line in the prologue, 

‘‘Union busting is a field populated by bullies and built on deceit.’’ 

Now, there is a big difference from just providing simple advice 

and then when you get to the steps of—are you all familiar with 

Cruz & Associates? This is just one firm that does this sort of work 

and does it with some of the big hotels. 

If you look at the things that have happened in some of these 

campaigns, whether it would be the firing and intimidation of employees, whether it be a cartoon—here is a cartoon management 

put out at the Miramar Sheraton, and it shows a cartoon of Hitler 

with an arm band showing ‘‘814,’’ which is the number of the Local. 

I do not know if that is really legal advice or if that falls maybe 

a little more to the persuading, but I do not know if you need a 

well-paid attorney to tell you that Adolf Hitler cartoons may or 

may not help persuade, but this business seems to go much farther 

than what people are talking about. 

Mr. Newman, specifically, what is listed—under this rule, what 

will you be listing? People are talking about bearing their soul and 

confidential information. What is going to be disclosed on this 

form? 

Mr. NEWMAN. The identity of the employer that has retained the 

union buster, the amount the employer is paying to the union buster, the scope of the union buster’s representation, a copy, if there 

is one, of the agreement or arrangement between the union buster 

and the employer. 

Mr. POCAN. By ‘‘scope,’’ how many words are we talking about? 

Pages and pages? Are we talking sentences and sentences? 

Mr. NEWMAN. I think we are talking about a sentence or two, 

and I think what is important to understand is that information 

has always been required on the LM–10 filed by the employer, the 

LM–20 filed by the consultant. 

The scope of the information that is being sought in this rule is 

no different than what the Department of Labor has always sought 

when the union buster deals directly face-to-face with employees. 

Numerous courts have said that it is not protected by the attorney-client privilege, numerous courts have said it is completely consistent with State ethics obligations. 

Mr. POCAN. In these firms, often the work does go way beyond. 

We are hearing the nice of it. We just give a little advice on what 

they are doing. A lot of these firms are doing things like this. This 

is the advice they give. That definitely goes to a different level of 

what I think was intended, and that is why we want the disclosure. 

It has been said people will not hire these firms. I do not know 

why, if that is all the disclosure is, why that is so chilling to an 

employer, because if they are going through this, and I have that 

mailing and I decide I want to bust my union for whatever reason, 

to have to disclose that little bit is not exactly the bearing of one’s 

soul and the conflict that people are asking for. 

Why would someone be afraid to be listed on there? 

Mr. NEWMAN. Because they like to have these consultants operating in the shadows. And consultants in the book that you refCEWDOCROOM with DISTILLER

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erenced, Mr. Levitt’s book, not only does that allow the consultant 

not to report, but I think the industry has found they are more persuasive when they operate in the shadows because employees do 

not know that. 

When the employer comes out and says, hey, we are one big, 

happy family, do not listen to this third party outsider, I always 

have an open-door policy, and by the way, here is your paycheck. 

I mean, that is going to resonate with employees. And at the same 

time, they do not know that the message that is being delivered is 

by someone like Cruz & Associates and others who are not providing legal advice. 

Legal advice is not reportable under the rule, period, done. What 

they are doing is drafting the game plan, running the plays, directing supervisors on how to do it. 

Mr. POCAN. Persuading? 

Mr. NEWMAN. Persuading, absolutely. 

Mr. POCAN. Thank you. I yield back. 

Chairman ROE. I thank the gentleman for yielding. Mr. Walberg, 

you are recognized for five minutes. 

Mr. WALBERG. Thank you, Mr. Chairman. I was just sitting here 

thinking in listening to all of this of what it would be like to have 

this same persuader rule for political campaigns, all of us at the 

dais here, what impact it would have. It certainly would change the 

presidential campaign going on right now, would it not? Well, that 

is another issue. 

Mr. Robinson, what other areas of law could the reporting requirements like those in the new rule be applied to, if this precedent is allowed to stand? 

Mr. ROBINSON. I suspect various Federal agencies, whether involved in consumer matters—all kinds, everything should be transparent. If everything should be outside the protection of attorneyclient privilege, if clients are not to be able to turn to lawyers without cautioning them that whatever they are discussing may have 

a persuader impact on the employees, and, therefore, not be confidential, I really do not know what is foreseeable and really unforeseeable. 

The scope of this carries over in unlimited ways, and it gives us 

great concern. 

Mr. WALBERG. Most likely a chilling effect on the issue of seeking 

good counsel in almost any area. 

Mr. ROBINSON. What was mentioned about the LM–20 form 

being so harmless and really not being of any consequence, let me 

say that under the new rule, the rule going into effect, otherwise 

legal advice in compliance—I say this in my written statement— 

under the new rule, otherwise legal advice in compliance with the 

statute itself will now actually trigger administrative disclosure 

under the LMRDA. 

One needs to look at the new form and see all the different boxes 

that have to be checked off disclosing what the legal advisor, the 

lawyer, has done with respect to that client if the advice could even 

be indirectly identified/called ‘‘persuader advice.’’ 

Even though that advice is offered only to the client, in all instances where the advice of the lawyer furthers the employer client’s object explicitly or implicitly—I am quoting now from the inCEWDOCROOM with DISTILLER

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structions to Form LM–20 that was referred to—‘‘Explicitly or implicitly, directly or indirectly, the object to affect an employee’s decision concerning his or her representation or collective bargaining 

rights.’’ That is persuader advice. 

Mr. WALBERG. Pretty broad. 

Mr. ROBINSON. Pretty broad, and if we want good advice at all 

levels on both sides, imagine the position of the advisor, the legal 

advisor, when a complaint is filed with the Department of Labor 

alleging that persuader activity was taken and no report was filed, 

and there is a dispute over whether it was persuader activity, even 

indirectly, what is going to be the defense to that allegation or 

charge? 

At that point, the defense is going to require that counsel and 

the client do what? Tell everything they talked about, explain that 

it was not persuader activity, but they have to disclose the confidential conversation, the advice, the various considerations that 

went into that conference that was otherwise confidential. 

Mr. WALBERG. Thank you. 

Mr. ROBINSON. That is what they are going to be facing, so the 

lawyer today with this new rule has to say to the employer client 

at the outset, look, I cannot assure you that somebody is not going 

to say our discussion— 

Mr. WALBERG. I appreciate that. I think we get the message 

there. I want to go to the consultant, Ms. Sellers. As a general HR 

consultant, you are likely not the intended target for the persuader 

rule, but you would clearly be impacted by the rule. 

Ms. SELLERS. Correct. 

Mr. WALBERG. Clearly, that is why you are here. How will SLS 

Consulting respond to the persuader rule, and what consequences 

does it create for your clients, in particular small businesses? 

Ms. SELLERS. I am very concerned about the rule, obviously. I am 

still trying to determine what I am going to do. I have basically two 

choices. I can continue as I am doing and risk or jeopardize the fact 

that I may trigger filing that form. I know a lot of my employer 

clients will not want me to be on that form, and they will not want 

their names on the form. 

So, the other opportunity would be for me to basically stop doing 

any discussion when I train employers and train supervisors regarding the union organization or what people should and should 

not say. In that case, I feel like I am doing a disservice to those 

employers and those supervisors by withholding information. 

Mr. WALBERG. Mr. Chairman, I think it is clear that employees 

and employers could be hurt by taking away this type of— 

Chairman ROE. The gentleman’s time has expired. 

Mr. WALBERG. Thank you. 

Chairman ROE. I now yield five minutes to the full committee 

ranking member, Mr. Scott. 

Mr. SCOTT. Thank you. Mr. Newman, can you tell me how this 

rule differs or conforms with the actual statute? 

Mr. NEWMAN. Yes, sir. Yes, Representative Scott. The rule, unlike previous interpretations, conforms with the language in the 

statute because it will require persuaders to report not only their 

direct persuader activities but also their indirect persuader activities. 

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Mr. SCOTT. And what does the statute require? 

Mr. NEWMAN. Both direct and indirect to be reported. 

Mr. SCOTT. And so the statute just recites—the rule just recites 

the statute? 

Mr. NEWMAN. Correct, and supported by the legislative history as 

well. 

Mr. SCOTT. I would like to ask a question of Mr. Robinson, I 

guess. You indicated there would be a disclosure of privileged information if this rule went through. You would have the same problem you articulated under the present rule, is that right? 

Mr. ROBINSON. No, we would not because there is specifically in 

the statute an advice exemption which by the Department of Labor 

for 50 years, over 50 years, has been interpreted as not applying 

to a lawyer’s advice to an employer client as long as they do not 

communicate directly with the employees. 

Mr. SCOTT. The client-lawyer relationship, under Rule 1.6 of the 

ABA rule—you are a former president of the ABA, is that right? 

Mr. ROBINSON. Yes, sir. 

Mr. SCOTT. Rule 1.6, confidentiality of information, says the lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes it is necessary, 

and Subsection (6) is to comply with other law. If the law requires 

the disclosure, where is the problem with the representation? 

Mr. ROBINSON. So, the new rule is not a law. It is an administrative regulation which we are arguing and pointing out is in direct 

conflict with the Department of Labor’s interpretation of the advice 

exemption in the statute which is the law and, therefore— 

Mr. SCOTT. How do you interpret the statute? How do you read 

the statute? Does it not say ‘‘direct or indirect?’’ 

Mr. ROBINSON. I am sorry. 

Mr. SCOTT. Does not the statute say ‘‘direct or indirect?’’ 

Mr. ROBINSON. I am not addressing the point of whether it is direct or indirect. I am directing to the fact that either way, it is an 

administrative regulation and cannot overrule 1.6 as adopted by 

the various States around this country, because it is not the law, 

it is an administrative regulation. 

The statute itself says there is an advice exemption, and that advice exemption, as it has been implemented for over 50 years, beginning with the administration of President Kennedy, has protected confidential attorney-client communications. 

Mr. SCOTT. It is protected under the indirect, also? 

Mr. ROBINSON. Indirect and direct, yes. 

Mr. SCOTT. Right. We would not expect to have a problem with 

forced revelation of privileged information? You are suggesting that 

the rule would require the revelation of privileged information, actual communication, when, in fact, all that is revealed is the fact 

of representation. 

Mr. ROBINSON. It would be revealed in the face of investigation 

by DOL and accusations and challenges as to whether or not the 

advice was persuader advice. The only way to defend against that 

would be to say what the advice was, to disclose the advice, to lay 

it all on the table, which effectively would erase the client confidentiality of the conversation. 

Mr. SCOTT. How is that different from present law? 

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Mr. ROBINSON. I am sorry, I could not hear. 

Mr. SCOTT. How is that different from present law? Why do you 

not have the same problem— 

Mr. ROBINSON. Under present law, it is not to be disclosed as 

long as the lawyer advisor of the employer client does not communicate directly with the employer client’s employees. 

Mr. SCOTT. They do not—right now, they do not ask for that information. If there is a question, they use what is objective evidence. They do not ask for the privileged conversations, is that 

right? 

Mr. ROBINSON. Well, they could ask, but— 

Mr. SCOTT. They can ask now? 

Mr. ROBINSON. It would not be required to be disclosed. 

Mr. SCOTT. They can ask now and they do not? 

Mr. ROBINSON. They can ask. With all due respect, they can ask 

anything, but it would not need to be disclosed if the advisor has 

not spoken directly to the employees. 

Mr. SCOTT. And the rule could be implemented in such a way 

that the confidentiality is not— 

Chairman ROE. The gentleman’s time has expired. Mr. Guthrie, 

you are recognized for five minutes. 

Mr. GUTHRIE. Thank you. Thank you, Mr. Robinson, for coming 

up from the Commonwealth of Kentucky. I know a lot of people 

have pointed out certain situations, and a good friend of both of 

ours, our former Senate president, David Williams, one time when 

I was in the State Senate told me that there are bad situations, 

and sometimes bad situations result in bad law. 

I know your reputation. I know who you are. I know when people 

hire you, you are walking in to tell them how to comply and how 

to follow. I think probably 99 percent of the cases are that way. It 

is just going to tie up people who are trying to do things the right 

way and trying to do things correctly and getting the correct advice. 

My understanding of where you were going with the last point 

is once you speak to the employees, then it triggers the persuader, 

so there is no need to know what you told the employees, all they 

have to do is know you spoke to the employees. When you speak 

to the employer, then they have to figure out what you said to say 

whether or not it triggered the advice. That was where you were 

going, right? Did I make that clear, Mr. Robinson? 

The current persuader rule, they do not really need to know the 

content, the way it is previously applied, they do not need to know 

the content of the conversation, they just need to know you talked 

to the employees? 

Mr. ROBINSON. Correct, it is a bright line. It is clearly enforceable. A lawyer on behalf of the employer client who talks directly 

to the employees knows the lawyer is engaged in persuader activities and discloses that, files the appropriate forms and so on, and 

the client knows that. 

But now the advice given in private could be subject to investigation if the inference or accusation is made or the allegation is made 

that had the object of persuading the employees indirectly, implicitly. If that accusation is made, and I do not want to be redundant— 

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Mr. GUTHRIE. Yes, I know. 

Mr. ROBINSON.—then we are back to disclosing what should have 

been confidential. 

Mr. GUTHRIE. I will ask the question. Some other people have 

kind of talked similarly, but I will ask it again. You can elaborate 

again as well, Mr. Robinson. This change that the Department of 

Labor is moving towards or putting in place, do you think that is 

authorized by the statute? 

Mr. ROBINSON. It is a dramatic change. It is erasing or attempting to erase over 50 years of respect and recognition of attorneyclient privilege as an essential component of the rule of law. And 

that is why I am here today as an individual to make that point, 

so that it is understood how catastrophic this will be for the rule 

of law if it is allowed to go forward. 

Mr. GUTHRIE. What are your biggest concerns with the way the 

Department would enforce this rule? Well, I would say, getting into 

the content of your conversation, to be able to enforce the rule. 

Mr. ROBINSON. I guess in that regard I would defer to Mr. 

Baumgarten since he practices this law every day. I do not. It is 

not my area. I have expressed my thoughts and concerns. I will 

defer to him, if I may. 

Mr. GUTHRIE. Absolutely. 

Mr. BAUMGARTEN. Let me address a couple of things that are embedded in the last few questions. First, the suggestion has been 

made that the change of the rule is necessary in order to give effect 

to the statutory mandate that reporting is required if somebody indirectly persuades, and I would submit to you that the Department 

has misconstrued what the word ‘‘indirect’’ was intended to capture. 

The abuses detailed in the McClellan hearings focused on socalled ‘‘middlemen,’’ and their identity was shrouded in mystery. 

Sometimes they themselves engaged employees directly and sometimes they engaged others to engage employees directly. And there 

was a lot of testimony about these so-called ‘‘middlemen’’ who 

formed ‘‘vote no committees’’ of employees, and they engaged in 

bribery and coercion and the like. 

The word ‘‘indirectly’’ was inserted into the statute so that if 

those middlemen did not themselves persuade but engaged others 

to persuade, they would be captured if they spoke or acted through 

others to speak directly to the employees. 

Now, the Department has twisted that to say if you as the labor 

relations consultant advised your own client on communications 

with employees, you are indirectly persuading within the meaning 

of the statute, and that is simply not the case. That takes us back 

to the advice exemption. 

As to the point about the worst-case scenario, as you point out, 

the most irresponsible activities and, frankly, the most ineffective 

ways to communicate with employees—this was really addressed in 

the original solicitor’s memo that gave rise to the rule that we have 

lived with for more than 50 years. 

It was Solicitor of Labor Donahue who addressed this, and he addressed it in a very simple and straightforward fashion. 

He said, and I will quote, ‘‘Even where the advice is embedded 

in a speech or a statement prepared by the advisor to persuade, it 

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is nevertheless advice and must be fairly treated as advice.’’ The 

employer and not the advisor is the persuader. 

In any situation in which an outside consultant, myself, Ms. Sellers, anybody that is giving advice to a client, it is up to the client 

to accept or reject that advice, and if the client does, whatever the 

client communicates is the employer’s advice. 

Chairman ROE. Mr. Baumgarten, I am going to ask you to wrap 

up Mr. Guthrie’s time. 

Mr. GUTHRIE. I have to go cast a vote, so I appreciate it. Thank 

you very much. 

Chairman ROE. Mr. Jeffries, you are recognized. 

Mr. JEFFRIES. Thank you, Mr. Chair. Ms. Sellers, do you think 

there is a public interest in making sure that unionization elections 

are conducted in a fair and equitable fashion? 

Ms. SELLERS. I believe they should be fair and to the point where 

we should make sure that all those involved understand the rules 

and regulations and the do’s and don’ts, and my big concern is that 

our small employers especially are not going to get that information with these rules. 

Mr. JEFFRIES. You have that concern because you believe that 

your clients would ultimately not want to reveal the fact that they 

have entered into a consulting relationship, is that right? 

Ms. SELLERS. Well, I think a large part, especially on my behalf—probably the biggest irony is that I am in this committee 

meeting because not only do I not deal with employers when they 

are being under the threat of maybe union organization, I refer 

them to others. That is not my area of expertise. 

So, the reason for me being here is because in the definition, I 

am being scooped up and being part of this where I may actually 

have to do some of this filing because, quite frankly, I do not look 

good in handcuffs. So, I am extremely worried. This could be criminal charges. Things that I do today with my employers, it may just 

be advice, it may just be training, but as you know, unions do not 

knock on the front door and say we are getting ready to organize. 

Things can go on for months at a time. 

I could be offering opinions in general terms, but later we can 

find out that actually there is a union organization afoot. 

Mr. JEFFRIES. Why do you think that less information, just in 

terms of the public interest—you acknowledged having a free, equitable, fair election, I think, makes sense for all sides, but why is 

less information better than more information? 

Ms. SELLERS. I do not believe I said that. As a matter of fact, I 

think supervisors should get more information so they can handle 

their employees. However, when we are talking about actual union 

organization, as I mentioned, that is not my area of expertise, and 

that is why I send people to those who know more about it. 

Mr. JEFFRIES. I think Justice Brandeis, directing my question to 

Mr. Newman, once said that, ‘‘Sunlight is said to be the best of disinfectants; electric light, the most efficient policeman.’’ 

In your view, is the public interest served by a more expansive 

rule that just provides information to the public? 

Mr. NEWMAN. Yes. That is why there is disclosure requirements 

with respect to your election, Representative, and everyone on the 

dais. 

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Mr. JEFFRIES. There has been this concern that has been expressed about the attorney-client privilege being breached. I think 

there are many attorneys on both sides of the aisle, no one would 

support that type of approach, I would imagine. 

Do you think this concern is overblown? You touched on this in 

different ways. If so, why is this concern overblown and being 

overhyped here at this hearing? 

Mr. NEWMAN. Let me try to emphasize one particular point. The 

information that is required under the persuader rule to be reported by the consultant and the employer is no different than the 

information that the Department of Labor has always required 

from a persuader and the employer if they engaged in face-to-face 

persuader activity. 

The issue is does the disclosure of that information violate the 

attorney-client privilege. Numerous courts have addressed that 

question under this law, the 4th Circuit Court of Appeals, the 5th 

Circuit Court of Appeals, 6th Circuit Court of Appeals. 

Mr. JEFFRIES. Is it fair to say, as you have pointed out, I believe, 

those are amongst the most conservative circuit courts in the Nation, particularly the 5th? 

Mr. NEWMAN. In my opinion. 

Mr. JEFFRIES. Historically, the 4th, one of the most conservative? 

Mr. NEWMAN. Not so much anymore, but, yes, historically. 

Mr. JEFFRIES. They have all concluded that the attorney-client 

privilege would not be breached, is that right? 

Mr. NEWMAN. Correct. 

Mr. JEFFRIES. Under this particular statute, is that right? 

Mr. NEWMAN. Yes. 

Mr. JEFFRIES. Let me just turn in closing to Mr. Baumgarten. In 

terms of the public good as it relates to free and fair elections, 

would you agree with the premise generally that unionization rates 

tend to correlate with States that have lower levels of poverty as 

compared to States, for instance, that lack unionization? Is that an 

accurate assessment? 

Mr. BAUMGARTEN. I am not familiar with those statistics, Congressman. I would say to the extent of regulation, and I am familiar with this in the Northeast, businesses take into account regulation, they take into account requirements, and onerous requirements, and they have choices. 

Capital is mobile. There are no boundaries on capital anymore. 

Businesses will move and they will create jobs in the environment 

that is most receptive. 

Mr. JEFFRIES. I would just ask— 

Chairman ROE. The gentleman’s time has expired. 

Mr. JEFFRIES. Can I just ask unanimous consent that we enter 

into the record two things, Poverty Rankings by State, and also a 

listing of State Right to Work Requirements? 

Chairman ROE. Without objection, so ordered. 

[The information follows:] 

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Chairman ROE. Mr. Byrne, you are recognized for five minutes. 

Mr. BYRNE. Thank you, Mr. Chairman. I would like to make a 

couple of points and ask a question. The last colloquy about attorney-client privilege is really interesting to me because I used to be 

one of those lawyers giving that advice. No court has ruled on this 

because this has not been out there long enough for a court to rule 

on, so to say that any existing Circuit Court of Appeals’ opinion is 

applicable to this new interpretation is just flat wrong, that is erroneous. 

So, let me say as somebody that had to comply with it, this 

would invade my client’s attorney-client privilege. Just remember, 

it is not the attorney’s privilege, it is the client’s privilege. We are, 

in fact, invading that privilege with this rule. I would just make 

that point. 

Second point, let us get down to what is really going on here. 

Unions do not want employers talking to their employees about 

this. Who loses in that environment? Employees. When unions go 

to organize, they sell, and they sell what they think are the good 

parts of what they do and they never tell the employees the other 

side of the story, never. 

They never tell the employees that they can take them out on 

strike without the employees having any right to have any say 

about that. They never tell them that their dues can be increased 

without the employees having a vote or anything to say about that. 

They never tell them that there has been a history of violence or 

criminal activity inside the union. Obviously, they do not do that. 

Who is going to say that? If the union is not going to say that, 

somebody else has to say it. It has to be the employer. If an employer cannot get legal advice to know what the employer can say 

and not say, an employer is not going to say anything. That is what 

the unions want with this rule, for employers to say nothing. That 

way, the employees of the United States of America do not get the 

other side of the story. Who loses? The employees, the people that 

we say we are here to protect, they lose in this. That is who is the 

real loser here. 

Now, this law has been in effect for a very long time. It has been 

in effect during the John F. Kennedy Administration, the Lyndon 

B. Johnson Administration, the Jimmy Carter Administration, the 

Bill Clinton Administration. None of those great Democratic administrations ever put this interpretation on this law, ever. 

Mr. Baumgarten, are you familiar with the Kennedy Administration’s interpretation when this was first passed and how they applied it? 

Mr. BAUMGARTEN. I think I am. 

Mr. BYRNE. Could you speak to it, please? 

Mr. BAUMGARTEN. As I am sure the members of the subcommittee know, then Senator Kennedy was one of the sponsors of 

the Landrum-Griffin Act when he was in the Senate. The interpretation of the rule that has been in existence up until just a couple 

of days ago for more than 50 years was, as you point out, the interpretation that was given in 1962 as a result of a memorandum prepared by the Solicitor of Labor, Mr. Donahue, that was enacted 

during the Kennedy Administration. And interestingly enough, the 

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came Justice Goldberg, and spent a career before entering public 

service as a preeminent union-side labor lawyer. I would submit 

that Arthur Goldberg knew a little bit about labor law and knew 

a little bit about the Landrum-Griffin Act, and was obviously a 

fair-minded public servant as well. 

So, we have lived under an interpretation that was given to us 

under the administration by one of the drafters of the bill and interpreted by people who I think we can fairly say had an objective 

view of it. And I think it is also worth pointing out that the interpretation was upheld in the courts. It was upheld by the D.C. Circuit. And it will take a couple of lines, and the judge who wrote 

the decision summarized the then Secretary’s position by saying if 

the arrangement is solely for advice to the employer, then it matters not that the advice has as an object employee persuasion. 

The very purpose of Section 203’s exemption proscription is to remove from the section’s coverage certain activity that otherwise 

would have been reportable. In the overlap area, the Secretary thus 

concludes the exemption direction, not the coverage provision, generally must control. 

That is the interpretation that the Department of Labor—you 

might be interested to know that interpretation was withheld in 

this decision and the decision was written by then Circuit Court 

Judge Ruth Bader Ginsburg. 

Mr. BYRNE. Thank you. Mr. Chairman, I would like unanimous 

consent to insert letters from the NFIB, the Retail Industry Leaders Association, and the National Association of Home Builders 

into the record. 

I would say to this committee I think it is time for us to vote on 

the bill I have recently introduced in Congress to repeal this unconscionable interpretation by the Department of Labor, and I yield 

back. 

Chairman ROE. Without objection, so ordered. 

[The information follows:] 

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Chairman ROE. Ms. Bonamici, you are recognized for five minutes. 

Ms. BONAMICI. Thank you very much, Mr. Chairman, and thank 

you to our witnesses. Before I ask a question, I want to address a 

couple of things that have been placed on the record. 

First, a little clarification about concerns that have been raised 

about the potential for criminal penalties under this act. It is my 

understanding there is a willfulness requirement, so we are not 

talking about mistakes or even negligence here. There is a willful 

requirement before any criminal penalties would be imposed. 

Also, with regard to the recent discussion, it is also my understanding there is a suggestion made that the Clinton administration was aligned with others and, in fact, the Clinton administration tried to reverse the 1962 determination about what needed to 

be disclosed. 

So, Mr. Newman, I also used to practice law, so I know about the 

attorney-client privilege, and I know how critical it is for effective 

client representation. 

So, we have had a lot of discussion this morning, but I wanted 

to follow up on some of that, because Section 2 of the Labor-Management Reporting Disclosure Act actually states, ‘‘Nothing contained in this chapter shall be construed to require an attorney 

who is a member in good standing of the Bar of any State to include in any report required to be filed pursuant to the provisions 

of this chapter any information which was lawfully communicated 

to such attorney by any of his clients in the course of an attorneyclient relationship.’’ 

So, can you talk a little bit about the suggestion that has been 

made in testimony that lawyers will have to disclose the content 

of advice they give? Do you agree with that? Do you agree the rule 

might somehow change that? 

Mr. NEWMAN. No. If you read the rule and if you read the forms 

on which this reporting will take place, what is disclosed is the 

identity of the client, fee arrangement, scope and nature of the 

services, all of which have been held by those Circuit Courts of Appeals I cited not to violate the attorney-client privilege. 

The rule goes on to say that it requires also the attachment of 

the arrangement or agreement between the consultant and the employer. If that agreement contains any attorney-client privileged information, then it should be redacted and can be redacted consistent with the rule. 

Ms. BONAMICI. Thank you. Since you mentioned what needs to 

be reported, how do the reporting obligations of employers under 

this rule compare with the reporting obligations of the unions 

under the act? So, compare what the unions have to report with respect to hiring attorneys and consultants with what employers report. 

Mr. NEWMAN. Oh, my goodness. They do not compare, and they 

do not compare because unions have to report the identity of the 

attorneys that they retain, the amounts of money they pay them, 

not just for persuader activities, but for any activities. 

If someone retains—if the union retains my law firm for the purposes of looking at their lease and advising them on real estate 

issues, then the union has to disclose those payments if they exceed 

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$5,000, and, as you know, lawyers can rack up a $5,000 bill in 

short order. They have to disclose that on their annual report. 

It is available publicly. It is on the Department of Labor’s 

website, and not only can you search by union, you can search by 

law firm. Up pops every dollar that was paid by unions to their attorneys and who their attorneys are. 

Ms. BONAMICI. The unions also disclose salaries of officers and 

executives? 

Mr. NEWMAN. Yes. 

Ms. BONAMICI. Companies do not do that, the employers? 

Mr. NEWMAN. They do not. I should add the disclosure requirements that are imposed on unions were amended and broadened 

substantially under the George W. Bush Administration in 2003– 

2006, including all this disclosure information with respect to what 

attorneys must disclosure. 

I should add that the ABA at that time did not say a word about 

it. 

Ms. BONAMICI. There is a little bit of time left. Could you expand 

just a little bit on—this law has been around since the late 1950s. 

This loophole really did come up through the implementation. Can 

you talk a little bit about the history of that and why it needs to 

be closed in the remaining time? 

Mr. NEWMAN. Sure. The House version of this, LMRDA, this law, 

did exactly what the ABA wants to do. In fact, verbatim, just took 

the ABA’s language and inserted it into the statute. Attorneys do 

not have to disclose basically anything. The bill goes to conference. 

The conference committee rejects completely that language the 

ABA was pushing. 

Fast forward to 1962, Representative Landrum, who was the 

House leader of the LMRDA, pushes it again with the Department 

of Labor with the ABA. If you read the 1962 letter that my learned 

colleague, Mr. Baumgarten, described, it references both the ABA 

and Representative Landrum were pushing that opinion. 

So, in 1962, the Department of Labor takes the view that you 

only have to have direct face-to-face persuader activity to trigger a 

reporting requirement, and then the Clinton Administration reversed that. 

Chairman ROE. The gentlelady’s time has expired. 

Ms. BONAMICI. Thank you, Mr. Chairman. I yield back. 

Chairman ROE. Mr. Allen, you are recognized. 

Mr. ALLEN. Thank you, Mr. Chairman. This administration has 

unleashed an onslaught of rules and regulations since I began to 

serve in Congress just last year. We have had hearings on ambush 

elections, joint employer rules, overtime mandates. That is just a 

few of the regulations that will negatively impact how job creators 

run their businesses. 

Now, we add another to the list, the persuader rule. I am frustrated with yet another example of regulatory overreach from this 

administration, meaning this one-size-fits-all, particularly with regard to my State. 

Ms. Sellers, how will this rule impact professional associations 

focused on providing educational resources to their members? I understand industry groups often conduct webinars and presentations 

on the basis of the NLRB to educate employers about their rights 

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and responsibilities under the law. Everyone here wants employers 

and employees informed. 

Ms. SELLERS. Yes, they do. 

Mr. ALLEN. In my understanding, sometimes these sessions discuss how to prepare for potential union organizing activities. How 

is this going to be affected? 

Ms. SELLERS. The revision, the recent revision, did clarify this 

some, but it is still going to affect associations such as SHRM. We 

have a labor relations panel that traditionally and will probably 

continue to hold these types of webinars and seminars, and in some 

cases they do discuss preparing for union activity. 

Again, we have employers of all sizes, many of them do not have 

the luxury of in-house counsel, and some of them do not have very 

informed HR departments, so they need this training, and it is our 

belief that if we do present these types of webinars and seminars, 

we will have to file. 

Mr. ALLEN. From your experience, are smaller employers generally prepared for communicating with employees about union 

issues or do they require assistance from consultants? 

Ms. SELLERS. They do require assistance. They do not know, especially small employers. The leaders in small employers wear 

multiple hats. They are trying to do production. They are doing 

marketing. They are doing accounting and everything else. The last 

thing they are thinking about at this point is union organization. 

That is not even on their radar. 

So, when they are approached, and oftentimes they are approached far after the union has had a long time talking to their 

employees in secret, these employers need to find some assistance 

from attorneys and consultants who understand this information 

and can help them catch up quickly. 

Mr. ALLEN. As a small business owner, it is unconscionable to me 

that I cannot talk to my employees. I know their children, their 

families, hobbies, everything. It is just amazing. I guess this is the 

world as we see it. 

Mr. Baumgarten, the Department of Labor says that requiring 

more people to file disclosures will bring transparency to workers 

considering union representation. In your opinion, how will unions 

and employees use this information? 

Mr. BAUMGARTEN. Well, I am afraid that what the Department 

of Labor has done is create an artificial need for something that 

really is beside the point. 

You know, 50 years ago or so, when the statute was enacted, 

something like close to one in three of American workers belonged 

to unions. When I started practicing law in 1983, that was down 

to about 20 percent. Today, in the private sector, it hovers between 

6 and 7 percent; all told, it is about 11 percent including the public 

sector. 

The law has not changed. It is the same law that was in effect, 

applied more or less the same way, for the last 50 years. So, my 

point is do not blame it on the law. The economy has changed, and 

union messages have to change if they want to keep up, and they 

just have not done that. 

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I am afraid that what the Department has done is essentially, 

under the heading of talking about underreporting, has really deprived the employers and employees of fundamental rights. 

Mr. ALLEN. That is what my argument is. All of a sudden I have 

to tell my employees, hey, do not come into my office, I have an 

open door, I cannot talk to you. How is that going to make them 

feel? I think that is going to alienate them even further. 

Mr. BAUMGARTEN. And all of this is under the artifice of claiming 

there was underreporting. If there was underreporting under the 

old rule, then the Department should have enforced the old rule 

more vigorously instead of trying to change the rule, cast the net 

wider, capture more people within that net, and then characterize 

them in this, frankly, boogieman fashion. 

Mr. ALLEN. Thank you, panel. I yield back. 

Chairman ROE. The gentleman’s time has expired. Mr. Takano, 

you are recognized. 

Mr. TAKANO. Thank you, Mr. Chairman. It seems to me all this 

talk about underreporting is a lot of mumbo-jumbo. It seems to me 

the Department’s persuader rule is about guaranteeing the intent 

of the Labor-Management Reporting Disclosure Act, that the intent 

is met. 

Unions have long had to submit very detailed reports under the 

LMRDA, and it is correct that employees should know—employees 

are voting. They are the voters in this case. They are deciding the 

facts, the presentations on both sides, the arguments of the labor 

and the arguments of management. 

It is right that employees should know all of the parties who are 

involved in this persuasion exercise when they are considering 

whether or not they are going to vote for union representation. 

Now, we have talked about this comparison of congressional candidates running for office, all reporting requirements. I am required to report contributors and people involved in the campaign. 

It seems to me that if I claimed attorney-client privilege as a way 

of trying to disguise who is contributing to me or who is acting on 

my behalf or who I am paying, I do not think the voters would accept that. I would say voters would feel they have a right to know. 

In a similar fashion, do not workers have a right to this transparency, but would they not more widely consider all the facts 

being taken into account if employers were required to disclose who 

they are hiring as persuaders? Mr. Newman? 

Mr. NEWMAN. Thank you for the question. Yes, I think that is 

obvious. I think transparency is good. I think the more information 

that employees have before they decide whether to choose representation, the better. 

Mr. TAKANO. So, this idea that—we are trying to draw a distinction between persuaders, people who are hired specifically to persuade the workers one way or the other on whether or not to vote 

for union representation from legal advice, from legal advice which 

is protected. 

Can we hone in on that? What is that distinction? 

Mr. NEWMAN. Again, I draw up the playbook, I design the plays, 

I script the message, and I carry that out through supervisors. 

That is not advice. That is persuasion. 

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Mr. TAKANO. If you have been paid to do that, that has to be disclosed and how much you are being paid, how much is being spent 

on that, right? 

Mr. NEWMAN. Yes, who retained you and how much is being 

paid, so that employees can know that information when they 

make a very important choice. 

Mr. TAKANO. That is what is at stake here, the employees’ right 

to be able to know that. It is relevant. We are not getting to the 

point where we are disclosing the chief executive officers of the 

company’s salaries, which would be even more relevant than, say, 

a contract negotiation where you are trying to get a bump up of 

$1 or $2 in your pay if you are a worker, right? 

If the company says we cannot afford to give you that raise, we 

are not even saying you have a right to know what the chief executive officers are making. All we are saying here is, worker, you 

have a right to know when the company is hiring somebody to try 

to spin you or persuade you or try to dissuade you or counteract 

what the union is saying. You have a right to know how much 

money the company is spending on doing that, is that right? 

Mr. NEWMAN. That is right, and let me add union busters in my 

experience are not shy and always use the reports that the unions 

have to file to try to engage in persuader activity. And to that 

point, and I mentioned the legislative history, let me quote the 

Senate report on the LMRDA, authored by then Senator John F. 

Kennedy. 

‘‘If unions are required to report all their expenditures including 

expenses in organizing campaigns, reports should be required for 

employers who carry on or engage some persons to carry on various 

types of activity, often surreptitious, designed to interfere with the 

free choice of bargaining representatives by employees.’’ 

Mr. TAKANO. Senator Kennedy has been invoked to make the argument on the other side, but it is clear what his intent is, that 

even the indirect activity should be covered by this law. So, the intent of the law has not been really reflected by the regulations. 

Mr. NEWMAN. Up until now. 

Mr. TAKANO. Up until now. 

Mr. NEWMAN. And in 2000. 

Mr. TAKANO. Up until now and 2000. We are trying to correct 

that loophole now. 

Mr. NEWMAN. Correct. 

Mr. TAKANO. Thank you. 

Chairman ROE. I thank the gentleman for yielding. Mr. 

Grothman, you are recognized for five minutes. 

Mr. GROTHMAN. Thank you. We are going to start with Mr. 

Baumgarten. Under the final rule, the employer will have to report 

if the advice it receives is given with the intent to persuade. 

Now, I can imagine talking to a consultant and that could be a 

vague standard, but I want you to comment, is that a hard standard or it is one of these things where there is a grey area in the 

law and you do not know if you are breaking the law or not? 

Mr. BAUMGARTEN. This is a prime example of poorly drafted 

rules that leave everybody scratching their heads, everybody in the 

real world, which is where I function, trying to scratch their head 

as to what it really means, and there are criminal penalties, and 

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it does not make anybody feel much better that it has to be willful 

because God help any of us if we have to defend a claim, claiming 

we made an error, but it was not a willful error. 

Mr. GROTHMAN. What is the penalty? 

Mr. BAUMGARTEN. The penalties are criminal penalties. 

Mr. GROTHMAN. Do you know what it is? 

Mr. BAUMGARTEN. Imprisonment. 

Mr. GROTHMAN. How long? 

Mr. BAUMGARTEN. I am not sure, but I can tell you that even one 

day is too long for me. 

Mr. GROTHMAN. Okay. How does the employer know about this 

law? 

Mr. BAUMGARTEN. Well, the employer has to be advised by its 

legal counsel. If the employer does not have legal counsel but simply hires a consultant who is a labor relations advisor but not counsel, they may not ever know about it. 

Mr. GROTHMAN. This is one of the major problems we have in 

this country, in my opinion. You go into business, whatever that 

business is, service industry, manufacturing, whatever. It is hard 

enough to know in your business how to make your customers 

happy. They have all these peripheral laws out here. There is no 

guarantee the employers even know this law exists. 

Mr. BAUMGARTEN. One of the problems with this law is it is very, 

very sweeping. Under the new LM–10 and new LM–20, there are 

13 boxes to have to fill out, and if you engage somebody to help 

you draft, revise, or provide a personnel policy, you might have to 

report if it is intended to persuade. 

How do we know if it is going to be intended to persuade? The 

Department of Labor will ultimately tell us whether that was the 

intent or not, because all they have said is they will look at all the 

facts and circumstances. 

As an attorney talking to a client, if a client comes to you and 

says we want you to help us draft a personnel policy, that is okay. 

I can help you draft a personnel policy. I can begin to draft it. Tell 

me what you are trying to achieve. Well, we want to achieve competitive state-of-the-art policies that will help us recruit and retain 

effective employees and compete in a very competitive marketplace. 

I can do that. I can start to do that. 

What else would be your objectives? We want to remain a unionfree workplace because we have the right to do that. We do not 

think—whoa, now we have to stop, whether we started the project 

or did not start the project, whether I have one person as a client, 

a general counsel, who has one objective, and I have a senior vice 

president of Human Resources who has a different objective, it is 

simply too vague to have any confidence that you are complying. 

Mr. GROTHMAN. You are a lawyer, right, Mr. Baumgarten? That 

is why you are here today? 

Mr. BAUMGARTEN. Yes. 

Mr. GROTHMAN. If your client asks you a question, you have to 

respond. Even you, a trained lawyer who went to law school, been 

an expert on this, been to many seminars, you are going to have 

to respond. I do not know if you have to or not. 

Mr. BAUMGARTEN. In many cases, it will be unclear. 

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Mr. GROTHMAN. The expert, here you are testifying before Congress, the expert, and we have another vague law here in which 

your clients do not know whether they are doing something criminal or not. Is that true? 

Mr. BAUMGARTEN. It is for no demonstrable, appreciable reason. 

We had 50-plus years of a bright line rule that worked well and 

that everybody could apply. 

Mr. GROTHMAN. Okay. Ms. Sellers, I have a question for you. We 

sit here before this committee as well as the other committees and 

we keep coming across new laws, new regulations, new things, that 

if you dare to do business in the United States of America, you 

have to know something. 

How long have you been involved in— 

Ms. SELLERS. I have been in human resources for 30 years. 

Mr. GROTHMAN. I would never have guessed it. 

Ms. SELLERS. Thank you. 

Mr. GROTHMAN. During this 30 years, and I am sure you have 

been at seminars, blah, blah, blah, and new stuff keeps coming up, 

how many times have you seen laws disappear in which your clients get good news, and all of a sudden we do not have to worry 

about something anymore? 

Ms. SELLERS. I have very seldom ever had something like that. 

Mr. GROTHMAN. Ever in 30 years? 

Ms. SELLERS. I cannot recall any. 

Mr. GROTHMAN. We never take away any rules, all we do is add 

new rules? You have never seen anything taken away, Ms. Sellers, 

in 30 years? 

Chairman ROE. The gentleman’s time has expired. Ms. Wilson, 

you are recognized for five minutes. 

Ms. WILSON. Thank you, Mr. Chair. I want to ask a question of 

Mr. Newman. In current Federal employment and labor law, do 

workers benefit by not having all relevant information they need 

in order to make informed decisions as it relates to their working 

conditions, wages, or retirement? 

Mr. NEWMAN. I have been doing this for 22 years, and I think 

not. 

Ms. WILSON. If not, what credence do you give to arguments that 

workers should not have information needed to make decisions regarding their collective bargaining and unionizing rights? 

Mr. NEWMAN. I do not give any credence to it. I think, as I said, 

the idea and the title of this hearing that the persuader rule is an 

attack on employee free choice is bizarre, to put it diplomatically. 

Ms. WILSON. You stated in your testimony that in your practical 

experience, in most union campaigns, the evidence of the use of 

anti-union consultants is overwhelming. What are these signs? 

Mr. NEWMAN. The signs are it does not matter the size of the employer, it does not matter the industry in which the employer operates, it does not matter what part of the country in which the employer operates. 

The messages are the same, the manner of their delivery is the 

same, and there are scripted messages. There are handbills and 

leaflets that are drafted, sometimes they are identical. You will see 

the identical handbill in one campaign, in one industry, in one part 

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of the country that is used in a different industry, in a different 

part of the country. 

The messaging is exactly the same. The theme of the campaign 

is exactly the same. The union is a third party outsider, we are one 

big, happy family, reject that outsider. 

To the extent that a variety of different employers of all sizes in 

all varieties of industries can themselves come up with the exact 

same campaign materials, I think, is impossible. And I think the 

academic studies on this support that, that up to 87 percent of 

cases employers retain union-busting consultants. 

Ms. WILSON. Do you think the average worker working today has 

the knowledge or experience needed to detect these signs and recognize the true source of communications? 

Mr. NEWMAN. They do not. Most employees give their employers 

and their supervisors the benefit of the doubt. When their supervisors are telling them something that they claim is their opinion 

and their message, they are going to believe it, unless they are able 

to understand through disclosure that supervisor’s message is not 

the message from the supervisor, it is a message from a union 

buster. 

Ms. WILSON. What is the dividing line between labor and consultants or attorneys giving advice and engaging in persuader activity? 

Are attorneys who keep detailed records of their time spent and 

routinely make determinations about the character of their communications able to easily identify whether they are engaging in reportable persuader advice? 

Mr. NEWMAN. Yes. Let me say something that I say to my children often, which is saying something over and over does not make 

it true. Saying that legal advice is reportable under this rule is just 

not true. 

The Department of Labor is very clear about this. Let me quote 

the rule. ‘‘An attorney or consultant does not need to report when 

he counsels a business about its plans to undertake a particular action or course of action, advises the business about its legal 

vulnerabilities and how to minimize those vulnerabilities, identifies 

unsettled areas of the law, and represents the business in any disputes and negotiations that may arise.’’ 

That is legal advice, it is not reportable. 

Ms. WILSON. So, the rule gives examples or instructions in this 

regard? 

Mr. NEWMAN. Detailed examples. 

Ms. WILSON. Detailed. That is great. Does the disclosures on 

Form LM–20 filed by consultants and Form LM–10 filed by employers in any way aid employers in complying with disclosure requirements? Can employers use information filed by consultants to 

file their disclosures? 

Mr. NEWMAN. Can employers use information filed by consultants? They can. They can certainly look at the consultant’s report 

to see whether the consultant has deemed its activities reportable, 

which would trigger a reporting requirement for the employer. 

Employers often do not use the consultant’s reports, they use the 

union’s reports, and the consultants use the union reports to persuade employees. 

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Ms. WILSON. Is there any way— 

Chairman ROE. The gentlelady’s time has expired. Mr. Carter, 

you are now recognized for five minutes. 

Mr. CARTER. Thank you, Mr. Chairman. Thank all of you for 

being here today, we appreciate it very much. 

Ms. Sellers, I want to start with you. As I understand it, you are 

a human resources professional, and certainly you have had a lot 

of experience in this type of thing, in this kind of work, and particularly in the compliance area. 

Earlier during your testimony you mentioned the fact that you 

work primarily with small businesses. 

Ms. SELLERS. Right. 

Mr. CARTER. Under 100 employees? 

Ms. SELLERS. Fifty percent of my clients have 100 employees or 

less, and I think 34 percent have 50 employees or less. 

Mr. CARTER. I was formerly a small business owner, and now my 

wife is a small business owner. I am from a right-to-work state, I 

am from Georgia. We are a right-to-work state. Of course, we are 

very concerned—we have had a tremendous amount of job growth, 

and that is good, and that is what we wanted to do, that is what 

we have intended to do. 

I am particularly concerned about what this is going to do to 

small businesses. Can you give me an idea of the impact this could 

have on small businesses? 

Ms. SELLERS. Because of the vagueness of certain areas of this 

rule, I think we are all, the small business owners as well, going 

to over report or just back away from the topic completely. Over 

reporting will result in a great deal of time and effort. 

It may take 60 minutes to review the form, but if I have to go 

through each of the services that I provide to each of my clients, 

and I must admit, it is usually different things every day, to determine whether or not this could possibly be considered persuader or 

offering advice in the event of some sort of union organization, 

many times after the fact, without my knowledge, I would either 

over report or I would just make sure all employers knew we were 

not to discuss employee organization, and I could not share with 

them the rules. Because even if I just go by the rules, with TIPS, 

not to threaten, interrogate, and so forth, someone is going to say, 

well, what can I do? 

When I start telling them what they can do, now I am offering 

that advice, and I would then be under the indirect persuader rule. 

Mr. CARTER. I would suspect that the opposite could be true, and 

that is some small businesses and, in fact, a lot of small businesses, instead of over reporting, they will not be able to report at 

all. 

Ms. SELLERS. Absolutely, they are going to shy away because 

they do not want their name on the form. 

Mr. CARTER. Right. That is the impact it is going to have on businesses. What about the employees? Can you see it having an impact on the employees? 

Like most small business owners, my employees, they are my 

family. I want to make sure they are okay, too. 

Ms. SELLERS. Well, I believe if we start shying away from we 

cannot say this and that in employer training and supervisory 

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training, I think a lot of these supervisors are just going to back 

away because we are still at risk even if I change my outlines and 

my training. We are still at risk for the attendee asking a question 

that will then turn into advice. 

I am afraid that a lot of employers will turn away from having 

any of that type of training for their supervisors. We really firmly 

believe at SHRM that supervisors should be trained well, that will 

lead to employee engagement and successful companies. 

So, the employees will be directly affected because they will not 

have as effective supervisors as they could. 

Mr. CARTER. Right. One last thing, and this is for you, Mr. 

Baumgarten. You obviously have an extensive background in labor 

law, and obviously that is where your expertise is. 

When businesses hire a lawyer, they hire them primarily for one 

reason, and that is to just make sure they are legally abiding by 

the laws. They want to make sure they are in compliance. I certainly have done that myself. It is more a precautionary measure 

than anything. 

The direct contact test that was established in 1962 and has 

been in place since then, can you explain that to me a little bit just 

to make sure I understand it correctly? 

Mr. BAUMGARTEN. The issue that was addressed during the 

McClellan hearings and the fundamental issue that was addressed 

in the Landrum-Griffin Act were these middlemen who were acting 

on their own or through other third parties in ways that were coercive, involved corruption, or otherwise were in the shadows. 

When an employer is speaking directly to its employees, whether 

it is with the advice of counsel, whether it is with the advice of a 

labor relations consultant, an accounting firm, or anybody else, it 

is the employer’s message. There is nothing that is in the shadows, 

and the employees have no lack of clarity as to who stands behind 

that message. It is the employer. 

Mr. CARTER. Right. Mr. Chairman, I know my time has expired. 

I appreciate it. I just wanted to make sure because this is probably 

going to impact that quite significantly. 

Chairman ROE. I thank the gentleman for yielding. Again, I want 

to thank our witnesses, great discussion today, big turnout of members. I would like to thank you for taking your time to testify in 

front of the subcommittee today. 

Mr. Polis, do you have any closing remarks? 

Mr. POLIS. I do. I would like to begin by submitting two letters 

for the record, without objection, Mr. Chairman. One is an ABA 

policy statement, the other is a letter from attorneys. 

Chairman ROE. Without objection, so ordered. 

[The information follows:] 

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Mr. POLIS. This is a letter from many, many attorneys, including 

many professors of law, that states in part, ‘‘For the reasons discussed below, we believe that the reporting regime contemplated by 

the MLRDA, as amended, can coexist comfortably with the lawyers’ 

obligation under the American Bar Association’s model rules of professional conduct,’’ as Mr. Newman also testified to, and as is also 

contemplated in the ABA’s own information section, also entered 

into the record, which has a clear component to comply with the 

law or other court orders. 

I want to thank our witnesses for joining us today and for engaging members of the subcommittee in a substantive discussion. 

As we have discussed, reforms to the persuader rule are more 

than 54 years overdue, and help conform the actual implementation of the rule with the words of the law and the legislative intent. 

The MLRDA does not require reporting when consultants really 

give employers advice, but the DOL’s previous interpretation of the 

advice exemption was so broad that it allowed employers and consultants to avoid disclosing things that any reasonable person 

would consider indirect persuader activities covered under the statute. 

The previous interpretation was, in fact, rooted in an erroneous 

two-page solicitor’s memorandum issued in 1962. 

This rule is the final step towards fulfilling the original requirement in MLRDA, and will provide needed transparency in the 

workplace. 

I do want to address briefly some of the arguments we have 

heard today, that somehow the disclosure would affect an attorney’s ethical duty of client confidentiality. As Mr. Newman said 

very clearly, many experts, legal experts, agree, which is also in 

the letter, that this does not in any way violate confidentiality, nor 

does the additional reporting requirements for attorneys who happen to be registered lobbyists. 

As Mr. Newman and many of my Democratic colleagues shared, 

the persuader rule helps level the playing field for workers, rather 

than having an enormous stack of filings that unions have to have 

with regard to persuasion activities, we are talking about simply 

for employers, a few pages, help level that playing field for transparency, not to the benefit of either party. 

I believe we as a society and all those acting in good faith, both 

employers and unions, benefit from transparency around the process. 

Despite clear congressional direction to provide public disclosure 

of indirect persuader agreements, disclosure has been a one-sided 

proposition. Unions have to file hundreds of pages to report on how 

they spend money. Meanwhile, workers seeking to form unions are 

denied information and kept in the dark about their employer’s 

persuader arrangements. 

Under this new rule, which fulfills the statute, employers and 

consultants would be on more of a level playing field with regard 

to disclosures. It is a significant step forward, requiring employers 

to make public a small fraction of important information that 

unions have already made public for years. 

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Transparency helps ensure good governance in unions, and 

transparency will also help ensure a more democratic workplace, 

and above-board process at the employer level. 

A level playing field is exactly what our workers and corporations need today. 

I support this rule and look forward to successful implementation, and I yield back. 

Chairman ROE. I thank the gentleman for yielding. I again thank 

the panel, a great discussion. 

Let me just conclude briefly by saying that you have a right in 

America to belong to a union or not belong to a union. That is a 

right. I grew up in a union household. My father was a member 

of the union. I understand and realize what that union membership entailed during the time I was a kid growing up. 

As a small business owner, which I was until I got here, the most 

valuable asset that we have in small business are our employees. 

No question about it, certainly in our service industry like I was 

in, in a medical practice. 

As Mr. Allen said, many of these employees are like family members to us, and to not be able to speak to them in any way seems 

to me not who we are as a country. 

What has happened through nine administrations—I just counted them off in my head—this did not seem to be a problem through 

nine administrations until this administration came along. What 

has happened in the labor market? What has happened in NLRB 

in the seven years I have been here? 

We have seen the push to have card checks, not a secret ballot, 

that is the most sacrosanct thing. I put on a uniform, left this country, and went to Southeast Asia to protect your right to have a secret ballot. It is the most sacrosanct thing we can have, number 

one. That did not go anywhere. 

Ambush elections, and it seems that my colleagues are very interested in getting all this sunshine on somebody getting some 

legal advice, but it can only shine for 11 days because we have to 

get this election done really quick before anybody finds out what 

is really there. 

What is wrong with having a process that goes longer so the employees and the employers and everyone understands, because it is 

a huge thing that we are voting for. That is all anybody is asking 

for. 

Micro unions, persuader rule, overtime, on and on I could go with 

the Department of Labor and this administration. 

My concern, quite frankly, since it is arguable, and attorneys 

make a lot of money arguing about things, if the attorney-client 

privilege is arguable, if we are arguing about that, then we have 

lost a very basic right that we had as American citizens. Our system of laws in this country has been to protect individual rights 

throughout the 200-plus years of this Republic. 

I will just go through them briefly, there are some differences of 

opinion. We have the American Bar Association who opposes this. 

The Association of Corporate Counsel, the Ohio Management Lawyers Association, State Bar of Arizona, the Broom County, New 

York Bar Association, the Ohio Metropolitan Bar Association, the 

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tion, the State Bar of Michigan, the Missouri Bar, the Mississippi 

Bar, the Nebraska State Bar, the Ohio State Bar, the Peoria County Bar Association, the South Carolina Bar, the Tennessee Bar Association, the West Chester County, New York Bar Association, the 

West Virginia State Bar Association, and on and on, seem to oppose this. 

I think this is a rule that starts us down a slippery slope, and 

not a law, I might add, but a rule that could negate the attorneyclient privilege. We need to go very thoughtfully and carefully with 

this. 

Once again, this was a very thoughtful discussion, great debate 

from both sides of the aisle. And with nothing further, this meeting 

is adjourned. 

[Additional submission by Mr. Byrne follows:] 

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[Additional submissions by Mr. Jeffries follows:] 

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[Additional submission by Mr. Newman follows:] 

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[Whereupon, at 12:03 p.m., the Subcommittee was adjourned.] 

Æ 

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