```

[House Report 114-739]
[From the U.S. Government Publishing Office]

114th Congress    }                                        {    Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                        {   114-739

======================================================================

 
  PROVIDING FOR CONGRESSIONAL DISAPPROVAL UNDER CHAPTER 8 OF TITLE 5, 
   UNITED STATES CODE, OF THE FINAL RULE OF THE DEPARTMENT OF LABOR 
   RELATING TO ``INTERPRETATION OF THE `ADVICE' EXEMPTION IN SECTION 
     203(c) OF THE LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT''

                                _______
                                

 September 12, 2016.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Kline, from the Committee on Education and the Workforce, submitted 
                             the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                      [To accompany H.J. Res. 87]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the joint resolution (H.J. Res. 87) providing for 
congressional disapproval under chapter 8 of title 5, United 
States Code, of the final rule of the Department of Labor 
relating to ``Interpretation of the `Advice' Exemption in 
Section 203(c) of the Labor-Management Reporting and Disclosure 
Act'' having considered the same, report favorably thereon 
without amendment and recommend that the joint resolution do 
pass.

                                Purpose

     House Joint Resolution 87, as ordered reported by the 
Committee on Education and the Workforce (Committee) on May 18, 
2016, expresses congressional disapproval of the U.S. 
Department of Labor (DOL or Department) rule relating to 
interpretation of the ``advice'' exemption\1\ in section 203(c) 
of the Labor-Management Reporting and Disclosure Act 
(LMRDA).\2\
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    \1\Interpretation of the ``Advice'' Exemption in section 203(c) of 
the Labor-Management Reporting and Disclosure Act; Final Rule, 81 Fed. 
Reg. 15923 (Mar. 24, 2016) [hereinafter ``Persuader Rule'']. The 
Committee ordered this bill reported to the House of Representatives on 
May 18, 2016. In the intervening time, a Texas federal court has issued 
a nationwide preliminary injunction prohibiting implementation of this 
regulation. Nat'l Fed'n of Indep. Bus. v. Perez, No. 5:16-cv-00066 
(N.D. Tex. June 27, 2016) (Preliminary Injunction Order).
    \2\29 U.S.C. Sec. 401 et seq.
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                            Committee Action

                             112TH CONGRESS

Full Committee Hearing on Rushing Union Elections: Protecting the 
        Interests of Big Labor at the Expense of Workers' Free Choice

     On July 7, 2011, the Committee held a hearing entitled 
``Rushing Union Elections: Protecting the Interests of Big 
Labor at the Expense of Workers' Free Choice.'' Witnesses 
before the Committee were Mr. Peter C. Schaumber, Former 
Chairman of the National Labor Relations Board (NLRB), 
Washington, D.C.; Mr. Larry Getts, Tube Press Technician, Dana 
Corporation, Garrett, Indiana; Mr. Kenneth Dau-Schmidt, 
Professor, Indiana University, Maurer School of Law, 
Bloomington, Indiana; Mr. John Carew, President, Carew Concrete 
& Supply Company, Appleton, Wisconsin; and Mr. Michael J. 
Lotito, Attorney, Jackson Lewis LLP, San Francisco, California. 
The hearing primarily examined the NLRB ``ambush election'' 
rule, but Mr. Schaumber and Mr. Lotito also testified that the 
proposed DOL ``persuader rule'' would have a negative impact on 
employers and employees.\3\
---------------------------------------------------------------------------
    \3\Rushing Union Elections: Protecting the Interests of Big Labor 
at the Expense of Workers' Free Choice: H. Comm. on Educ. and the 
Workforce, 112th Cong. (Jul. 7, 2011) (Written Testimony of Peter C. 
Schaumber and Written Testimony of Michael J. Lotito).
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                             113TH CONGRESS

Health, Employment, Labor, and Pensions Subcommittee Hearing Examining 
        the Future of Union Organizing

     On September 19, 2013, the Subcommittee on Health, 
Employment, Labor, and Pensions held a hearing entitled ``The 
Future of Union Organizing.'' Witnesses were Mr. Ronald 
Meisburg, Partner, Proskauer Rose LLP, Washington, DC; Mr. 
David R. Burton, General Counsel, National Small Business 
Association, Washington, DC; Mr. Clarence Adams, Field 
Technician, Cablevision, Brooklyn, New York; and Mr. Stefan J. 
Marculewicz, Shareholder, Littler Mendelson, Washington, DC. At 
the hearing, Rep. Brett Guthrie (R-KY) expressed concern that 
the DOL's proposed rule would discourage small business owners 
from seeking much needed advice during a unionizing 
campaign.\4\
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    \4\The Future of Union Organizing: Hearing Before the H. Subcomm. 
on Health, Employment, Labor, and Pensions, Comm. on Educ. and the 
Workforce, 113th Cong. (Sept. 19, 2013) (statement of Rep. Brett 
Guthrie, Member, H. Comm. on Educ. and the Workforce).
---------------------------------------------------------------------------

                             114TH CONGRESS

Full Committee Hearing Examining the Policies and Priorities of the 
        U.S. Department of Labor

    On March 16, 2016, the Committee held a hearing entitled 
``Examining the Polices and Priorities of the U.S. Department 
of Labor.'' DOL Secretary Thomas E. Perez was the sole witness. 
During the hearing, Rep. Bradley Byrne (R-AL) expressed 
concerns that the forthcoming final rule would greatly harm 
small businesses and the ability of employees to make informed 
decisions about their right to join a union.\5\
---------------------------------------------------------------------------
    \5\Examining the Policies and Priorities of the U.S. Department of 
Labor: Hearing Before the H. Comm. on Educ. and the Workforce, 114th 
Cong. (Mar. 16, 2016) (statement of Rep. Bradley Byrne, Member, H. 
Comm. on Educ. and the Workforce).
---------------------------------------------------------------------------

Introduction of H.J. Res. 87, Providing for congressional disapproval 
        of the rule submitted by the Department of Labor relating to 
        ``Interpretation of the `Advice' Exemption in Section 203(c) of 
        the Labor-Management Reporting and Disclosure Act''

    On April 15, 2016, Rep. Byrne, along with Committee 
Chairman John Kline (R-MN), Health, Employment, Labor, and 
Pensions (HELP) Subcommittee Chairman David ``Phil'' Roe (R-
TN), and 17 additional cosponsors, introduced H.J. Res. 87, 
Providing for congressional disapproval under chapter 8 of 
title 5, United States Code, of the final rule of the 
Department of Labor relating to ``Interpretation of the 
`Advice' Exemption in Section 203(c) of the Labor-Management 
Reporting and Disclosure Act.'' In response to the threat posed 
by DOL's persuader rule, Rep. Byrne introduced the resolution 
to ensure employers are able to receive advice about how to 
lawfully communicate with their employees and to preserve 
employees' access to information during a union organizing 
campaign.\6\
---------------------------------------------------------------------------
    \6\Press Release, H. Comm. on Educ. and the Workforce, Byrne 
Introduces Resolution to Block Controversial ``Persuader'' Regulation 
(Apr. 15, 2016), http://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=400593.
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Subcommittee Hearing Examining the Persuader Rule: The Administration's 
        Latest Attack on Employer Free Speech and Worker Free Choice

    On April 27, 2016, the HELP Subcommittee held a hearing 
entitled ``The Persuader Rule: The Administration's Latest 
Attack on Employer Free Speech and Worker Free Choice'' to 
examine the March 24, 2016, DOL final rule expanding the 
application of LMRDA reporting requirements. Witnesses before 
the Subcommittee were Mr. Joseph Baumgarten, Partner, Proskauer 
Rose, New York, New York; Mr. Jonathan D. Newman, Partner, 
Sherman, Dunn, Cohen, Leifer & Yellig, P.C., Washington, D.C.; 
Mr. Wm. T. (Bill) Robinson III, Member, Frost Brown Todd LLC, 
Florence, Kentucky; and Ms. Sharon L. Sellers, President, SLS 
Consulting, LLC, Santee, South Carolina. During the hearing, 
witnesses testified in favor of H.J. Res. 87, discussing how 
the new rule will undermine attorney-client confidentiality, 
make it more difficult for small employers to receive the 
advice they need when faced with a union organizing campaign, 
and undermine the right of employees to make informed decisions 
concerning union representation.\7\
---------------------------------------------------------------------------
    \7\The Persuader Rule: The Administration's Latest Attack on 
Employer Free Speech and Worker Free Choice Before the H. Subcomm. on 
Health, Employment, Labor, and Pensions, Comm. on Educ. and the 
Workforce, 114th Cong. (Apr. 27, 2016).
---------------------------------------------------------------------------

Committee Passes H.J. Res. 87, Providing for congressional disapproval 
        of the rule submitted by the Department of Labor relating to 
        ``Interpretation of the `Advice' Exemption in Section 203(c) of 
        the Labor-Management Reporting and Disclosure Act''

    On May 18, 2016, the Committee considered H.J. Res. 87. One 
amendment was offered, but it was ruled non-germane. H.J. Res. 
87 was reported favorably to the House of Representatives by a 
vote of 22-13.

                        Summary of H.J. Res. 87

    Under the resolution, the House of Representatives 
expresses its disapproval of the rule submitted by DOL relating 
to the advice exemption for employer and consultant reporting 
in section 203(c) of the LMRDA. If enacted, the resolution 
would prohibit the regulation from going into effect.

                            Committee Views

                               BACKGROUND

Congressional Review Act

    The Congressional Review Act (CRA) enacted in 1996 
established special congressional procedures for disapproving a 
broad range of regulatory actions (largely encompassing, but 
not limited to, rules) issued by federal agencies.\8\ Before 
any rule covered by the CRA can take effect, the federal agency 
that promulgates the rule must submit it to Congress. If 
Congress passes a joint resolution disapproving the rule, and 
the resolution becomes law, the rule cannot take effect or 
continue in effect. The agency also may not reissue that rule 
or any substantially similar rule, except under authority of a 
subsequently enacted law.\9\
---------------------------------------------------------------------------
    \8\5 U.S.C.Sec. 801(a).
    \9\5 U.S.C. Sec. 801.
---------------------------------------------------------------------------
    The CRA establishes special expedited procedures for 
congressional action on joint resolutions of disapproval.\10\ 
The CRA dictates that, in both houses, to qualify for expedited 
consideration, a disapproval resolution must be submitted 
within 60 days after Congress receives the rule, exclusive of 
recess periods. It then lays out a set of action periods and 
deadlines that must be met before the joint resolution can be 
privileged, thereby circumventing the Senate's filibuster 
rules.
---------------------------------------------------------------------------
    \10\5 U.S.C. Sec. 802.
---------------------------------------------------------------------------

Labor Management Reporting and Disclosure Act

    The LMRDA was enacted in 1959 to ensure basic standards of 
democracy and fiscal responsibility in labor organizations 
representing employees in private industry and the U.S. Postal 
Service. It sets standards for reporting and disclosure of 
certain financial transactions and administrative practices of 
labor organizations and employers, the protection of union 
funds and assets, the administration of trusteeships by labor 
organizations, and the election of labor organization officers. 
In most cases, the LMRDA's reporting requirements are the only 
means by which more than 7 million private sector union 
members\11\ can get information about how their union dues are 
used. The LMRDA requires unions to submit annual financial 
reports to DOL. This is often the only publicly available 
information on the financial dealings of many unions.
---------------------------------------------------------------------------
    \11\DOL Bureau of Labor Statistics, Union Members--2015 (Jan. 28, 
2016), http://www.bls.gov/news.release/union2.nr0.htm.
---------------------------------------------------------------------------
    DOL's Office of Labor-Management Standards (OLMS) is 
responsible for administering and enforcing the LMRDA. From 
2001 to 2008, OLMS created an unprecedented level of union 
transparency and accountability, including improved reporting 
forms for unions, more strictly enforced reporting 
requirements, and reduced time between union audits. By 
contrast, the Obama administration has rescinded many of these 
improvements and focused on creating burdensome requirements 
for employers, despite the law's stated goal of union 
transparency.

The advice exemption of Section 203 of the LMRDA

    Under section 203 of the LMRDA, employers and labor 
consultants are required to report agreements or arrangements 
to directly or indirectly ``persuade'' employees with respect 
to the exercise of their rights to organize or bargain 
collectively, known as ``persuader activity.''\12\ The statute 
explicitly exempts those who only provide ``advice'' to 
employers from these reporting requirements. Section 203(c) 
creates the exemption for ``any employer or other person [from 
filing] a report covering the services of such person [for] 
giving or agreeing to give advice to such employer.''
---------------------------------------------------------------------------
    \12\29 U.S.C. Sec. 433.
---------------------------------------------------------------------------

Previous interpretation

     For over 50 years, prior to the new rule, a simple 
``bright-line'' test was used to define the section 203(c) 
advice exemption. Starting in 1962, DOL regulations exempted 
employer and labor-consultant reporting if a consultant had no 
direct contact with employees, and the employer was free to 
accept or reject the consultant's advice.\13\ With a brief 
exception of a few months in 2001,\14\ the ``direct contact'' 
test for the advice exemption was in place from 1962 until the 
new rule.
---------------------------------------------------------------------------
    \13\LMRDA Interpretive Manual Sec. 265.005 (1962). See also 
Persuader Rule, 81 Fed. Reg. at 15923.
    \14\In January 2001, during the final days of the Clinton 
administration, DOL issued a revised interpretation of the advice 
exemption that was rescinded by the Bush administration's DOL after 
only a few months.
---------------------------------------------------------------------------

The new rule

    On June 21, 2011, OLMS issued the proposed persuader 
rule.\15\ It received over six thousand comments, largely in 
opposition.\16\ The rule then remained dormant until it was 
sent to the Office of Management and Budget in December 2015 
for review. On March 24, 2016, DOL issued the final rule and 
published it in the Federal Register.\17\ The new rule became 
effective 30 days after its publication in the Federal Register 
and applies to arrangements commenced after July 1, 2016.
---------------------------------------------------------------------------
    \15\Labor-Management Reporting and Disclosure Act; Interpretation 
of the ``Advice'' Exemption; Proposed Rule, 76 Fed. Reg. 36178 (Jun. 
21, 2011).
    \16\On September 21, 2011, shortly after the rule was initially 
proposed, U.S. House Education and Workforce Committee Chairman Kline 
submitted comments opposing the rule. The comments highlighted how the 
proposed rule was an effort to advance DOL's ``culture of union 
favoritism'' at the expense of employees and job creators. Comments 
available at https://www.regulations.gov/#!documentDetail;D=LMSO-2011-
0002-5864.
    \17\Persuader Rule; Final Rule, 81 Fed. Reg. at 15923.
---------------------------------------------------------------------------
    Under DOL's final rule, the bright-line ``direct contact'' 
test is replaced by a broad, vague standard based on the intent 
or ``object'' of employer-consultant arrangements. Under the 
new rule, any arrangement that in whole or in part has the 
object directly or indirectly to persuade employees, regardless 
of whether advice is also given, falls outside of the advice 
exemption.

                     OBJECTIONS TO DOL'S FINAL RULE

Uncertainty in triggering reporting requirements

    Under the new rule, the reporting requirement depends on 
subjective, vague distinctions, creating uncertainty for 
employers and consultants. For example, if an employer engages 
a human resource consultant to draft a presentation for new 
employees, the employer may be required to report to OLMS.\18\ 
Under the old rule, as long as the consultant had no direct 
contact with employees, reporting would not have been required, 
but under the new rule it depends on the employer's motivation. 
If the employer is motivated to give the presentation to boost 
employee morale or enhance communication between employees and 
management, then reporting does not appear to be triggered. 
However, if even a secondary concern in the employer's mind is 
potential unionization, then reporting likely is required, even 
if the consultant never comes into contact with the employees. 
Therefore, employers can trigger burdensome reporting 
requirements by seeking advice on issues that may relate to 
unions only in minor or abstract ways. Additionally, the 
consultant's reporting obligations are also in doubt where the 
object of the employer's request was unclear.
---------------------------------------------------------------------------
    \18\Employers have to report the existence of arrangements to OLMS 
under 29 U.S.C. Sec. 433(a). Consultants have to report both the 
existence of arrangements as well as their receipts and disbursements 
to OLMS under 29 U.S.C. 433(b).
---------------------------------------------------------------------------
    Instructions to be included on the revised reporting forms, 
meant to clarify the rule, demonstrate the lack of a clear 
distinction between reportable ``persuader activity'' and 
exempt ``advice'' under the new rule. The instructions define 
``persuader activities'' as ``any actions, conduct, or 
communications with employees that are undertaken with an 
object, explicitly or implicitly, directly or indirectly, to 
affect an employee's decisions regarding his or her 
representation or collective bargaining rights.''\19\ 
``Advice'' is defined as an ``oral or written recommendation 
regarding a decision or a course of conduct.''\20\
---------------------------------------------------------------------------
    \19\Persuader Rule, 81 Fed. Reg. at 16022 (``Instructions for LM-10 
Employer Report'').
    \20\Id. at 16028.
---------------------------------------------------------------------------
    The difference between a reportable consultant arrangement 
designed to ``implicitly'' and ``indirectly'' affect an 
``employee's decision'' and an exempted arrangement that 
instead only guides an employer's ``course of conduct'' will 
confuse employers. This makes reporting obligations unclear, 
unlike the previous bright-line rule. The vague standard in the 
new rule is especially alarming because criminal sanctions can 
apply for failure to report under the violations and penalties 
provisions of the LMRDA.\21\
---------------------------------------------------------------------------
    \21\29 U.S.C. Sec. 439.
---------------------------------------------------------------------------
    Witnesses before the HELP Subcommittee were concerned about 
the vagueness of the new rule. Labor attorney Joseph Baumgarten 
testified ``in the real world, there is no way to make this 
determination with any degree of confidence--particularly where 
both the employer and the lawyer/consultant have to make their 
own independent determination as to whether the work performed 
is reportable.''\22\ Human resources consultant Sharon Sellers 
noted, ``In the end, the reality is that many consultants, like 
myself, will protect themselves by broadly interpreting the 
rule's coverage and subjecting their own small business to 
significant reporting obligations.''\23\
---------------------------------------------------------------------------
    \22\The Persuader Rule: The Administration's Latest Attack on 
Employer Free Speech and Worker Free Choice Before the H. Subcomm. on 
Health, Employment, Labor, and Pensions, Comm. on Educ. and the 
Workforce, 114th Cong. 12 (Apr. 27, 2016) (written testimony of Mr. 
Joseph Baumgarten, Partner, Proskauer Rose).
    \23\The Persuader Rule: The Administration's Latest Attack on 
Employer Free Speech and Worker Free Choice Before the H. Subcomm. on 
Health, Employment, Labor, and Pensions, Comm. on Educ. and the 
Workforce, 114th Cong. 5 (Apr. 27, 2016) (written testimony of Ms. 
Sharon Sellers, President, SLS Consulting, LLC).
---------------------------------------------------------------------------

Attack on attorney-client confidentiality

    OLMS received thousands of comments criticizing the 
proposed rule before it was finalized.\24\ Of particular 
interest were comments submitted by 11 state bars, as well as 
the American Bar Association (ABA). The ABA argued the rule 
``could seriously undermine both the confidential client-lawyer 
relationship and the employers' fundamental right to 
counsel.''\25\ Following publication of the final rule, the 
current ABA President submitted a statement to the Committee 
opposing the final rule on the same grounds:
---------------------------------------------------------------------------
    \24\Regulations.gov, LMSO-2011-0002, RIN 1245-AA03, http://
www.regulations.gov/#!docketBrowser;rpp=25;po=0;D=LMSO-2011-0002.
    \25\Comments of Wm. T. (Bill) Robinson III, American Bar 
Association, on the Labor Management Standards Office Proposed Rule: 
Labor-Management Reporting and Disclosure Act: Interpretation of the 
Advice Exemption (Sept. 21, 2011), http://www.regulations.gov/
#!documentDetail;D=LMSO-2011-0002-5577.

          The ABA urges Congress to preserve the Department of 
        Labor's longstanding interpretation of the advice 
        exemption to the Persuader Rule so that lawyers and law 
        firms will continue to be exempt from the rule's 
        onerous disclosure requirements when they merely 
        provide advice or other legal assistance to their 
        employer clients regarding the clients' persuader 
        activities and the lawyers have no direct contact with 
        the employees.\26\
---------------------------------------------------------------------------
    \26\The Persuader Rule: The Administration's Latest Attack on 
Employer Free Speech and Worker Free Choice Before the H. Subcomm. on 
Health, Employment, Labor, and Pensions, Comm. on Educ. and the 
Workforce, 114th Cong. (Apr. 27, 2016) (written statement of Paulette 
Brown, President, American Bar Association).

    Under the previous rule, labor-management attorneys who did 
not have direct contact with employees knew they were exempt 
from LMRDA reporting requirements. Under the new rule, however, 
legal advice given with the objective to assist an employer 
communicating with employees are reportable. Again, reporting 
is triggered even if the advisor has no contact with employees. 
This is true even in situations where the legal advice has 
other objectives, such as making sure the employer is compliant 
with the National Labor Relations Act. To comply with the new 
rule, many attorneys will have to publicly report their clients 
and potentially violate attorney-client confidentiality and 
privilege.
    Furthermore, attorneys who enter into a single persuader 
agreement may have to report every other employer labor-
relations client, even if no persuader activity has taken place 
with those other clients. When an attorney enters into an 
agreement with an employer to engage in activity reportable 
under the rule, the attorney is required to fill out a 
``Receipts and Disbursements Report.'' This report requires all 
attorneys engaging in the new, expansive definition of 
persuader activities to disclose receipts and disbursements of 
any kind received from all employer clients ``on account of 
labor relations advice or services,'' not just those receipts 
and disbursements that are related to persuader activity.\27\
---------------------------------------------------------------------------
    \27\In April 2016, OLMS put out a ``special enforcement policy'' 
for LM-21 forms that will stop ``enforcement actions'' for failure to 
list receipts and disbursements from other employer clients. While a 
step in the right direction, this does not change the rule, but rather 
is just a temporary statement that for the time being the rule will not 
be enforced. See Form LM-21 Special Enforcement Policy. http://
www.dol.gov/olms/regs/compliance/ecr/lm21_specialenforce.htm.
---------------------------------------------------------------------------
    In his testimony before the HELP Subcommittee, former ABA 
President William. T. Robinson focused entirely on the rule's 
threat to the attorney-client relationship. He testified the 
new rule ``undermines, in the reality of every day labor 
relations, the critically important confidentiality that is the 
sine qua non of effective attorney-client communications'' and 
that the rule would ``effectively erase the time-honored 
purpose and historically protected value of attorney-client 
confidentiality.''\28\
---------------------------------------------------------------------------
    \28\The Persuader Rule: The Administration's Latest Attack on 
Employer Free Speech and Worker Free Choice Before the H. Subcomm. on 
Health, Employment, Labor, and Pensions, Comm. on Educ. and the 
Workforce, 114th Cong. 7 (Apr. 27, 2016) (written testimony of Mr. Wm. 
T. Robinson, Member, Frost Brown Todd LLC).
---------------------------------------------------------------------------
    Rather than risk running afoul of state bar rules by 
disclosing private information about their clients, many 
attorneys may simply avoid this area of law, depriving 
employers--particularly smaller employers--the legal advice 
they need to navigate a host of complex federal labor policies. 
Ultimately, depriving employers of the ability to receive legal 
counsel deprives employees of the information they need to make 
fully informed decisions regarding union representation.\29\
---------------------------------------------------------------------------
    \29\See Robinson, supra note 26, at 6-7; and Baumgarten, supra note 
20 at 6-7.
---------------------------------------------------------------------------

Combined effect of DOL's rule and the NLRB's ``ambush elections'' rule

    Due to the NLRB's recent ``ambush election'' rulemaking, 
the time between a union first filing a representation petition 
and the election can now be as short as 11 days.\30\ This means 
an even shorter time period exists for employers to educate 
themselves as to the rules and restrictions placed on them in 
regards to union organizing campaigns, as well as less time for 
employees to learn about the issues surrounding unionization.
---------------------------------------------------------------------------
    \30\NLRB Representation-Case Procedures; Final Rule, 79 Fed. Reg. 
74308 (Dec. 15, 2014).
---------------------------------------------------------------------------
    In such a short time period, employers will often heavily 
rely on trusted attorneys and consultants. In her testimony, 
Ms. Sellers noted that ``now more than ever, small employers 
need consultants and legal services provided by highly trained 
professionals to navigate the increasingly complex labor 
relations space.''\31\ Yet, under this rule, employers now may 
be unable to receive guidance from such attorneys and 
consultants who would forgo working on these matters due to the 
invasive reporting requirements.\32\
---------------------------------------------------------------------------
    \31\Sellers, supra note 21, at 4.
    \32\See Comments of Michael Eastman, U.S. Chamber of Commerce, on 
the Labor Management Standards Office Proposed Rule: Labor-Management 
Reporting and Disclosure Act: Interpretation of the Advice Exemption 
(Sept. 22, 2011), http://www.regulations.gov/#!documentDetail;D=LMSO-
2011-0002-5949; and Comments of Karen Harned, National Federation of 
Independent Business, Small Business Legal Center on the Labor 
Management Standards Office Proposed Rule: Labor-Management Reporting 
and Disclosure Act: Interpretation of the Advice Exemption (Sept. 20, 
2011), https://www.regulations.gov/#!documentDetail;D=LMSO-2011-0002-
4269.
---------------------------------------------------------------------------
    The NLRB's ``ambush election'' rule and the DOL's 
``persuader rule'' were first proposed just a day apart in June 
2011. They both promote the interests of unions during 
organizing campaigns, with little regard for the interests of 
employers and employees. When combined, they create an 
environment where employers have little chance to properly and 
effectively communicate with their employees and employees have 
less opportunity to make informed decisions.

Depriving employees of information

    From organizing campaigns to contract disputes, unions run 
highly sophisticated operations to persuade employees to join 
and support them. Many unions employ full-time staff and rely 
on outside help just to persuade employees. Larger unions run 
multi-million dollar public relations campaigns with the intent 
of gaining members.\33\ Workers are often bombarded with slick 
sales pitches from an interested union.
---------------------------------------------------------------------------
    \33\For example, in 2015 The International Brotherhood of 
Electrical Workers reported over 870 million dollars in disbursements, 
including disbursements to staff, public relations firms and for 
organizing campaigns. 2015 Labor Organization Reports available at 
https://olms.dol-esa.gov/query/getOrgQry.do.
---------------------------------------------------------------------------
    Employers, on the other hand, are focused on running their 
businesses. Smaller employers in particular may have little or 
no background in effectively communicating with their employees 
about union issues. As a result, employees often do not get to 
hear the other side of the story about a union unless their 
employer has help. That help often comes in the form of a 
consultant who can explain the issues with the same detail 
offered by the union. Yet, many employers will be hesitant to 
engage with labor consultants due to the increased reporting 
requirements under the new rule.
    In his testimony before the HELP Subcommittee, Mr. 
Baumgarten noted small businesses and their employees will be 
hurt the most. He testified the new rule will result in a loss 
of consulting and legal services to employers ``and the loss of 
services will impact most acutely the small businesses that 
have limited funds and little or no in-house experience to 
guide them in what they can and cannot say to their 
employees.''\34\
---------------------------------------------------------------------------
    \34\Baumgarten, supra note 20, at 10.
---------------------------------------------------------------------------
    If employers are deprived of help communicating with 
employees, then employees are deprived of important information 
they need to make decisions about unions in their workplaces. 
Whether to join a union is a deeply personal and important 
decision, and employees deserve to hear both sides of the story 
when making their decision.

Union favoritism

    The new rule creates a double standard unfairly favoring 
unions. It forces employers and employer consultants to 
disclose additional information but continues to exempt union 
consultants and ``salts''\35\ from the same degree of scrutiny.
---------------------------------------------------------------------------
    \35\Salt: a union member, consultant or employee who joins a non-
unionized organization as an employee for the purpose of organizing its 
membership.
---------------------------------------------------------------------------
    Even prior to the changes made by the new rule, the LMRDA's 
reporting requirements allowed unions to avoid the same 
scrutiny as employers during organizing campaigns. For example, 
under the previous rule, a consultant must report within 30 
days of entering into agreement with an employer.\36\ This 
gives a union notice that an employer has received help to 
educate employees during an organizing campaign. Furthermore, 
if an employer has received help to prepare for the contingency 
of a unionization effort, this will likely have been reported. 
Yet a union is not required to report about ongoing 
organizational campaigns if reporting would provide a 
``tactical advantage'' to other parties or expose the union's 
strategy.\37\ Even when a union does have to report, it must do 
so only once per year.\38\ So while a union can often find out 
during an organizing effort exactly who is assisting an 
employer, the union itself is not required to file anything 
until the campaign is complete.
---------------------------------------------------------------------------
    \36\29 U.S.C. Sec. 433.
    \37\Instructions for Form LM-2 Labor Organization Annual Report 22, 
Pg. 23-24 (Nov. 2010), http://www.dol.gov/olms/regs/compliance/EFS/LM-
2InstructionsEFS.pdf.
    \38\29 U.S.C. Sec. 431.
---------------------------------------------------------------------------
    DOL states the purpose of the new rule is to provide 
workers with what it believes is ``essential information'' 
regarding the views and materials directed at them.\39\ 
However, a labor organization is not required to disclose 
similar information if it ``would expose the reporting union's 
prospective organizing strategy.''\40\ The fact that a labor 
organization is paying a co-worker to organize a workplace 
would seem to be ``essential information'' for workers to know, 
yet the Department has not proposed a rescission of that 
confidentiality exception.
---------------------------------------------------------------------------
    \39\Persuader Rule, 81 Fed. Reg. at 15926.
    \40\Instructions for Form LM-2 Labor Organization Annual Report 22, 
Pg. 23-24 (Nov. 2010), http://www.dol.gov/olms/regs/compliance/EFS/LM-
2InstructionsEFS.pdf.
---------------------------------------------------------------------------
    Additionally, the broad categories included in union 
reporting forms make that information much more opaque than the 
specific information required in employer and consultant 
reporting forms. For instance, a union may have an entry under 
the broad ``representational activities'' category indicating 
that they hired a consultant for ``media outreach'' or a law 
firm for ``labor law issues,'' but nowhere will it indicate 
whether the objective was to organize a specific workplace or 
to persuade employees to vote for a union.\41\ By comparison, 
an employer must check a box indicating that he or she hired a 
consultant with the purpose of persuading employees.\42\ 
Moreover, consultants must identify which groups of employees 
they were hired to persuade, which topics were covered, and 
what unions were involved.\43\ Due to the asymmetry of the 
requirements affecting unions and employers, unions often know 
exactly what sort of outside help employers are receiving 
during an organizing campaign, while employers and employees do 
not have similar knowledge of the unions' outside help.\44\
---------------------------------------------------------------------------
    \41\Department of Labor Form LM-2. Labor Organization Annual 
Report, https://www.dol.gov/olms/regs/compliance/GPEA_Forms/
lm2_blankForm.pdf.
    \42\Department of Labor Form LM-10, Employer Report, https://
www.dol.gov/olms/regs/compliance/GPE_Forms/2016/FormLM-10_3-15-16.pdf.
    \43\Department of Labor Form LM-20, Agreements and Activities 
Report, https://www.dol.gov/olms/regs/compliance/GPEA_Forms/2016/
FormLM-20_3-15-16.pdf.
    \44\Unions often use these reports to argue the money spent by the 
employer on a consultant could have instead gone to salaries and 
benefits, if only the employer was not so anti-union. Yet, the employee 
does not get to see the money, raised through dues and other forced 
fees taken out of employee paychecks, spent by the union on similar 
consultants until after an organizational campaign is over--and even 
then it is not reported so clearly.
---------------------------------------------------------------------------
    The new rule makes this inequitable treatment even worse by 
narrowing the advice exemption to the reporting requirements 
for labor consultants and employers under the LMRDA. By 
contrast, the new rule made no changes to the reporting 
requirements placed on unions in the LMRDA. As a result, both 
employers and consultants have to comply with more burdensome 
requirements covering more interactions than previously, 
exacerbating the inequity.

Implementation cost

    DOL's cost analysis of its new persuader rule has also been 
questioned. DOL estimated the total annual cost imposed by the 
rule on filers to be just over $1 million.\45\ However, the 
Manhattan Institute estimated the proposed rule could cost 
significantly more.\46\ The Manhattan Institute study argued 
DOL underestimated the number of businesses that will be 
affected by the change, failed to take into account the cost of 
consulting with lawyers to comply with the proposed rule, and 
underestimated the number of hours that will be spent on 
compliance with the proposed rule.
---------------------------------------------------------------------------
    \45\Persuader Rule, 81 Fed. Reg. at 15929.
    \46\Diana Furchtgott-Roth, The High Costs of Proposed New Labor-Law 
Regulations, Manhattan Institute for Policy Research (Apr. 2013), 
http://www.manhattan-institute.org/html/high-costs-proposed-new-labor-
law-regulations-5715.html.
---------------------------------------------------------------------------

                               Conclusion

    DOL's final rule imposes costly and invasive new 
requirements on employers that represent a dramatic departure 
from long-standing labor policies. The new rule threatens 
attorney-client confidentiality, chills employer free speech, 
undermines employee free choice, and makes it harder for 
business owners--especially small business owners--to navigate 
a host of complex labor rules. The resolution of disapproval 
protects the rights of employers and employees by preventing 
implementation of the Department of Labor's misguided persuader 
rule.

                      Section-by-Section Analysis

    Congress expresses its disapproval of the rule submitted by 
DOL relating to the advice exemption for employer and 
consultant reporting in section 203(c) of the LMRDA and 
prohibits it from going into effect.

                       Explanation of Amendments

    One amendment was offered, and its disposition is explained 
in the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. House Joint Resolution 87 expresses congressional 
disapproval of the DOL rule relating to interpretation of the 
``advice'' exemption in section 203(c) of the LMRDA.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. This issue is addressed in the CBO letter.

                           Earmark Statement

    H.J. Res. 87 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of House rule XXI.

                            Roll Call Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.

         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House rule XIII, the 
goal of House Joint Resolution 87 is to express congressional 
disapproval of the DOL rule relating to interpretation of the 
``advice'' exemption in section 203(c) of the LMRDA.

                    Duplication of Federal Programs

    No provision of H.J. Res. 87 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The committee estimates that enacting H.J. Res. 87 does not 
specifically direct the completion of any specific rule makings 
within the meaning of 5 U.S.C. 551.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the committee's oversight findings and recommendations are 
reflected in the body of this report.

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the committee has received 
the following estimate for H.J. Res. 87 from the Director of 
the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 6, 2016.
Hon. John Kline,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.J. Res. 87, providing 
for Congressional disapproval under chapter 8 of title 5, 
United States Code, of the final rule of the Department of 
Labor, relating to ``Interpretation of the `Advice' Exemption 
in Section 203(c) of the Labor-Management Reporting and 
Disclosure Act.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley Anthony.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.J. Res. 87--Providing for Congressional disapproval under chapter 8 
        of title 5, United States Code, of the final rule of the 
        Department of Labor, relating to ``Interpretation of the 
        `Advice' Exemption in Section 203(c) of the Labor-Management 
        Reporting and Disclosure Act''

    H.J. Res. 87 would disapprove a final rule of the 
Department of Labor relating to the ``Interpretation of 
`Advice' exemption in section 203(c) of the Labor-Management 
Reporting and Disclosure Act,'' which was published in the 
Federal Register on March 24, 2016. H.J. Res. 87 would invoke a 
legislative process established by the Congressional Review Act 
(Public Law 104-121) to disapprove the new rule. If H.J. Res. 
87 is enacted, the rule would have no force or effect.
    The rule requires employers and their consultants on labor 
relations to report on their activities and communications if 
they are undertaken with the direct or indirect goal of 
affecting the employees' decisions regarding union 
representation or collective bargaining rights. Under an 
earlier interpretation of the rule, reporting was required only 
when consultants communicated directly with employees. The rule 
also requires electronic filing of the required reports.
    The new rule does not apply to government employers. The 
increase in reporting by private employers and consultants 
could have a minimal effect on the Department of Labor's 
operations, but CBO estimates that implementing the legislation 
would not significantly affect the federal budget. Because 
enacting H.J. Res. 87 would not affect direct spending or 
revenues, pay-as-you-go procedures do not apply. CBO estimates 
that enacting the resolution would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2027.
    H.J. Res. 87 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
and would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Christina Hawley 
Anthony. This estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.J. Res. 87. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

    The requirements of clause 3(e) of rule XIII of the Rules 
of the House of Representatives do not apply to H.J. Res. 87.

                             MINORITY VIEWS

                              INTRODUCTION

    On March 24, 2016, the Department of Labor (DOL) issued its 
final persuader rule updating the reporting requirements for 
union avoidance consultants and employers; the rule reinstates 
the statutory requirement that employers and consultants must 
report both their direct and indirect persuader activity under 
the Labor Management Reporting and Disclosure Act (LMRDA) of 
1959 (29 U.S.C. 401 et seq.).
          (1) The DOL's persuader rule promotes transparency by 
        closing a massive reporting loophole that has allowed 
        employers to keep indirect persuader activity secret. 
        This rule will pull back the curtain on employer 
        arrangements with union avoidance consultants that have 
        been improperly withheld from workers for nearly 50 
        years.
          (2) The rule does not interfere with the attorney-
        client privilege and is consistent with the Model Rules 
        of Professional Conduct governing attorneys' ethical 
        obligations.
          (3) The persuader rule helps level the playing field 
        for workers who want to join together to negotiate with 
        their employer for better working conditions. By 
        requiring employers to disclose the identity of and 
        amounts paid to outside consultants who are responsible 
        for crafting their anti-union messages, employees will 
        be better informed when making decisions during union 
        elections and during collective bargaining.
    On April 15, 2015, Representative Bradley Byrne (AL-01) 
filed H.J. Res. 87, a Joint Resolution of Disapproval of the 
rule pursuant to the Congressional Review Act. The Committee's 
Subcommittee on Health, Employment, Labor and Pensions held a 
hearing on the persuader rule on April 27th, and on May 18th 
there was a full committee markup of H.J. Res. 87. Given that 
H.J. Res. 87 would overturn the DOL's persuader rule and 
reinstate the reporting loophole, a more descriptive name for 
this resolution would be the ``Keeping Employees in the Dark 
Act.''
    There have been two conflicting court decisions regarding 
this rule, which was due to become enforceable July 1. On June 
27, 2016, a federal district court in Texas issued a 
preliminary injunction blocking enforcement of the rule, but a 
second federal district court in Minnesota denied a nearly 
identical request on June 22, 2016.

                          WHAT IS A PERSUADER?

    When workers seek to organize and bargain collectively, 
employers often hire union avoidance consultants--also known as 
``persuaders''--to orchestrate and roll out time-tested, anti-
union campaigns. One union avoidance consultant outlined the 
services he offers to help defeat a union organizing effort:

        [We] prepare[ ] all counter union speeches, small group 
        meeting talks, letters to employees' homes, bulletin 
        board posters, handouts to employees, etc., and 
        schedule[ ] dates for each counter union communication 
        media piece to be used. We have assembled a very large 
        library of counter union materials, much of what [sic] 
        is customized to a particular union.\1\
---------------------------------------------------------------------------
    \1\John Logan, Consultants, Lawyers, and the `Union Free' Movement 
in the U.S.A. since the 1970s, 33 Industrial Relations Journal, 197, 
203 (2002), available at, http://www.jwj.org/wp-content/uploads/2014/
03/Logan-Consultants.pdf.

    Union avoidance consultants may try to persuade employees 
by contacting them directly, thus engaging in ``direct 
persuader'' activity, or by engaging in ``indirect persuader'' 
activity, in which they do not contact employees directly, but 
instead work behind the scenes by creating materials (such as 
flyers, speeches, and videos) for management to use to 
communicate with employees.
    Under Section 203(a) of the LMRDA, consultants and 
attorneys who engage in direct and indirect persuader 
activities--and the employers who hire them--must disclose 
their arrangements, a description of the services to be 
performed, and the amount the employer paid.
    The union-avoidance industry is big business; in 1990 it 
was estimated to produce revenues of $200 million a year, and 
employers hire union-avoidance persuaders in as many as 87% of 
union organizing campaigns.\2\ For example, IRS records filed 
by Catholic Healthcare West (a non-profit hospital chain and a 
major recipient of state Medicaid funds) show that in 1998 the 
hospital paid a union avoidance consultant, the Burke Group, 
$2.6 million to roll out its campaign.\3\ And in 2004, 
Energy's, a multinational manufacturer of industrial batteries, 
paid Jackson Lewis $2.7 million to run a campaign against the 
International Union of Electrical Workers (IUE) at its South 
Carolina battery plant.\4\
---------------------------------------------------------------------------
    \2\See 81 FR 15933 n.10; James Rundle, Winning Hearts and Minds in 
the Era of Employee Involvement Programs, in Organizing to Win: New 
Research on Union Strategies 213, 219 (Kate Bronfenbrenner, et al. 
eds., Cornell University Press 1998). See also John Logan, Consultants, 
Lawyers, and the `Union Free' Movement in the USA since the 1970s, 33 
Industrial Relations Journal 197, 198 (2002).
    \3\John Logan, The Union Avoidance Industry in the United States, 
British Journal of Industrial Relations 44:4, 656 (December 2006), 
available at, http://www.newunionism.net/library/organizing/Logan%20-
%20The%20Union%20Avoidance%20Industry%20in%20the%20United %20States%20-
%202006.pdf
    \4\Id. at 660.
---------------------------------------------------------------------------

                THE DOL PERSUADER RULE CLOSES A LOOPHOLE

    LMRDA Section 203(a) states that employers must disclose 
their agreements in which a consultant:

        undertakes activities where an object thereof, directly 
        or indirectly, is to persuade employees to exercise or 
        not to exercise, or persuade employees as to the manner 
        of exercising, the right to organize and bargain 
        collectively through representatives of their own 
        choosing.\5\
---------------------------------------------------------------------------
    \5\29 U.S.C. 433(a) (emphasis added). Section 203(b) contains a 
similar reporting requirement for consultants.
---------------------------------------------------------------------------
    However, the LMRDA exempts employers and consultants from 
reporting when consultants merely give employers ``advice.'' 
While the statute does not define the term ``advice,'' the 
statute provides DOL with the authority to issue regulations, 
including those ``necessary to prevent the circumvention or 
evasion of [the Act's] reporting requirements.''
    After initially requiring disclosure of indirect persuader 
agreements following the enactment of the LMRDA, the DOL 
Solicitor reinterpreted the law in 1962 to treat all indirect 
persuader activities as non-reportable ``advice.''\6\ This 
interpretation created a massive loophole, and as a result DOL 
currently receives zero indirect persuader reports. While 
consultants file a few hundred reports annually covering direct 
persuader agreements, this 1962 Solicitor's interpretation--
which was not adopted as a regulation--only covers a small 
fraction of the total universe of persuader agreements.
---------------------------------------------------------------------------
    \6\Memorandum from Charles Donohue, Solicitor of Labor regarding 
``Modification of Position Regarding `Advice' under Section 203(c)'' of 
the LMRDA, February 19, 1962.
---------------------------------------------------------------------------
    In 1979 and 1980, the House Committee on Education and 
Labor conducted nine days of hearings entitled, ``Pressures in 
Today's Workplace'' and issued a report on the evidence it 
gathered. The report stated in part that ``the current 
interpretation of [section 203 of the LMRDA] law has enabled 
employers and consultants to shield their arrangements and 
activities.''\7\
---------------------------------------------------------------------------
    \7\Pressures in Today's Workplace: Report of the Subcommittee on 
Labor-Management Relations of the Committee on Education and Labor, 
U.S. House of Representatives 27, 44 (1980).
---------------------------------------------------------------------------
    The DOL briefly closed this loophole at the end of the 
Clinton Administration on January 9, 2001, when it issued sub-
regulatory guidance that brought indirect persuader activities 
back into the reporting requirements. In April 2001, the 
Administration of President George W. Bush rescinded this 
reform.
    On March 24, 2016, following notice and comment rulemaking 
that began in June 2011, the DOL's final rule closed the 
loophole by reinstating the LMRDA's requirement to report both 
direct and indirect persuader activity.\8\ As explained in the 
final rule, ``[t]he prior interpretation failed to achieve the 
very purpose for which [LMRDA] . . . was enacted--to disclose 
to workers, the public, and the Government activities 
undertaken by labor relations consultants to persuade 
employees--directly or indirectly, as to how to exercise their 
rights to union representation and collective bargaining.''\9\
---------------------------------------------------------------------------
    \8\Interpretation of the ``Advice'' Exemption in Section 203(c) of 
the Labor-Management Reporting and Disclosure Act, March 24, 2016, 
Federal Register Vol 81. No. 57. This rule took effect on April 25, 
2016. It would have been applicable to agreements between employers and 
consultants made on or after July 1, 2016, had a preliminary injunction 
not been issued on June 27, 2016 by a U.S. Federal District Court in 
Lubbock, Texas (see below).
    \9\81 FR 15935, 15926 (March 24, 2016).
---------------------------------------------------------------------------
    Under the final rule:

            ``Advice''--which does not have to be reported--
        includes oral or written recommendations regarding a 
        decision or a course of conduct. For example, a 
        consultant gives advice when he or she counsels a 
        business about its plans to undertake a particular 
        action that is not intended to persuade employees about 
        union rights, advises the business about its legal 
        vulnerabilities and how to minimize them, or identifies 
        and explains unsettled areas of the law.
            ``Indirect persuader activity''--which does have to 
        be reported--includes activities that are designed to 
        persuade employees regarding the union or collective 
        bargaining, such as when the consultant trains 
        supervisors to conduct anti-union meetings; coordinates 
        or directs the activities of supervisors; drafts, 
        revises or provides speeches designed to persuade 
        employees regarding the union; or identifies pro-union 
        employees for discipline or reward.
    Some have alleged that ``the administration is attempting 
to rewrite the law through executive fiat,''\10\ but Section 
208 of the LMRDA states:
---------------------------------------------------------------------------
    \10\Opening Statement of David P. Roe at the April 27, 2016 HELP 
Subcommittee Hearing entitled ``The Persuader Rule: The 
Administration's Latest Attack on Employer Free Speech and Employee 
Free Choice,'' available at, http://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=400635

        ``The Secretary shall have authority to issue, amend, 
        and rescind rules and regulations . . . as he may find 
        necessary to prevent the circumvention or evasion of 
---------------------------------------------------------------------------
        [the Act's] reporting requirements.''

    This Congressional directive is precisely what the DOL 
followed when it issued the final rule.

   THE REPORTING REQUIREMENTS DO NOT IMPOSE AN ADMINISTRATIVE BURDEN

    The reporting requirements for this rule do not constitute 
an administrative burden: the employer must fill out a 4-page 
form, the consultant a 2-page form, and they must attach copies 
of their persuader agreements. There are two reporting forms 
impacted by this rule:
           ``Employer's Report'' Form LM-10: (4 pages) 
        Employers must submit one annual report listing their 
        persuader agreements over the fiscal year, the dates 
        they entered into contracts, the terms and conditions 
        of these contracts (including the amount employers paid 
        for these services), and a description of the persuader 
        services performed.
           Consultant's ``Activities Report'' Form LM-
        20: (2 pages) Labor relations consultants must submit a 
        report within 30 days after entering into each 
        persuader agreement, listing the date they entered into 
        contract, the terms and conditions of the agreement 
        (including the amount employers paid), and a 
        description of the persuader services to be performed.
    The DOL's final rule updates the instructions to Forms LM-
10 and LM-20 only. DOL estimates that 2,777 employers will file 
Form LM-10 reports once annually under the new rule, and that 
approximately 358 consultant firms (including law firms) will 
file an estimated 4,187 Form LM-20 reports within 30 days of 
entering into consulting agreements.\11\
---------------------------------------------------------------------------
    \11\81 FR 16009-10 (March 24, 2016).
---------------------------------------------------------------------------
    The DOL's reporting requirements for consultants involve a 
third form, the LM-21, that was unaffected by the final rule:
           Consultant's ``Receipts and Disbursements 
        Report'' Form LM-21: (2 pages) Labor relations 
        consultants must submit this report once annually, if 
        any payments were made or received during the fiscal 
        year pursuant to persuader agreements reported in an 
        LM-20.
    DOL has placed a new rulemaking notice on the regulatory 
agenda for Form LM-21, and in the interim, has issued a non-
enforcement policy stating that, pending the rulemaking, it 
will not enforce the annual financial disclosure requirements 
(disbursements and receipts) for consultants under Form LM-
21.\12\ Therefore, any of the Majority's concerns about LM-21 
are premature.
---------------------------------------------------------------------------
    \12\Office of Labor-Management Standards (OLMS), Form LM-21 Special 
Enforcement Policy (April 13, 2016), available at, http://www.dol.gov/
olms/regs/compliance/ecr/lm21_specialenforce.htm
---------------------------------------------------------------------------

 DISCLOSURE REQUIREMENTS FOR UNIONS ARE FAR MORE SUBSTANTIAL THAN THE 
                 DISCLOSURE REQUIREMENTS FOR EMPLOYERS

    Some contend that this rule is one-sided on the grounds 
that it only addresses employer disclosure requirements. As 
Democratic witness Jon Newman, a partner in the Washington, 
D.C., law firm of Sherman, Dunn, Cohen, Leifer & Yellig, 
testified at the April 27 hearing:

        [U]nions 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.

    Thus, unions are held to a much broader scope of 
disclosures than employers. Mr. Newman also explained that 
while the consultant's and employer's reporting forms are two 
and four pages respectively, ``the IBEW['s] most recent LM-2 
(Labor Organization) annual report . . . is 150 pages long,'' 
and ``the AFL-CIO's most recent report required to be filed 
with the Department of Labor . . . is hundreds of pages 
long.''\13\
---------------------------------------------------------------------------
    \13\Testimony of Jonathan D. Newman, Esq., Subcommittee on Health, 
Employment, Labor and Pensions, Committee on Education and the 
Workforce, U.S. House of Representatives, April 27, 2016, pp 26-27.
---------------------------------------------------------------------------
    Due to the longstanding reporting loophole, employers have 
had an unfair advantage in union elections by hiding their 
arrangements with consultants, but have often used information 
from the union's reports in their anti-union campaign 
materials. This rule helps level the playing field.

     THE RULE PROMOTES--RATHER THAN CHILLS--SPEECH IN THE WORKPLACE

    Neither the LMRDA nor the DOL rule restrains in any way the 
content of an employer's message, the timing of the message, or 
the means by which it is delivered. Yet Republican Members 
contend that the rule chills free speech because employers will 
choose to be silent rather than disclose the fact that they 
have hired anti-union consultants:

        This extreme and partisan rule will chill employer free 
        speech . . . this rule will stifle debate and restrict 
        worker free choice--with the sole purpose of stacking 
        the deck in favor of organized labor.\14\
---------------------------------------------------------------------------
    \14\Opening Statement of David P. Roe at the April 27, 2016 HELP 
Subcommittee Hearing entitled ``The Persuader Rule: The 
Administration's Latest Attack on Employer Free Speech and Employee 
Free Choice,'' available at, http://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=400635

    Far from restricting speech, the disclosure requirements 
actually promote speech by enhancing transparency during union 
organizing drives and in collective bargaining. The U.S. Courts 
of Appeals have uniformly rejected every First Amendment 
challenge to the LMRDA,\15\ including a case in the Fourth 
Circuit, where the Court stated that:
---------------------------------------------------------------------------
    \15\See Humphrey v. Donovan, 755 F. 2d 1211, 1221 (6th 1985) 
(``[W]e conclude that the [LMRDA's] report requirements do not 
substantially burden [persuaders'] first amendment rights.''); Master 
Printers of America v. Donovan, 751 F.2d 700, 705 (4th Cir. 1984) 
(same); Master Printers Association v. Donovan, 699 F.2d 370, 371 (7th 
Cir. 1983), (adopting district court's opinion, 532 F. Supp. 1140, 1148 
(N.D. Ill. 1981) (same).

        [d]isclosure laws perform the important function of 
        deterring actual corruption and avoiding the appearance 
        of corruption, but unlike other types of restrictive 
        laws they actually promote speech by making more 
        information available to the public and thereby 
        bolstering the `marketplace of ideas.'\16\
---------------------------------------------------------------------------
    \16\Master Printers of Am. v. Donovan, 751 F.2d 700, 710 (4th Cir. 
1984).

    The United States Court of Appeals for the Sixth Circuit 
---------------------------------------------------------------------------
noted that disclosure of persuader agreements under the LMRDA:

        enable[s] employees in the labor relations setting, 
        like voters in the political arena, to understand the 
        source of the information they are given during the 
        course of a labor election campaign.\17\
---------------------------------------------------------------------------
    \17\Humphreys et. al., v. Donovan, 755 F.2d 1211, 1222 (6th Cir. 
1985).

    The Lobbying Disclosure Act of 1995 requires similar 
disclosures by lobbyists, yet lobbying activities have not been 
chilled simply because lobbying targets and the amounts 
lobbying firms are charging their clients must be publicly 
disclosed.
    Given that this rule promotes speech, is there a valid 
policy reason why workers should not know who is hiding behind 
a curtain like the Wizard of Oz during union election 
campaigns?

 OPPONENTS INACCURATELY CLAIM THAT THE RULE WILL REQUIRE EMPLOYERS TO 
 DISCLOSE THEIR ARRANGEMENTS WITH ATTORNEYS OR CONULTANTS WHEN SEEKING 
                                 ADVICE

    Republican witness Joseph Baumgarten testified at the April 
27th hearing that ``employers may eschew seeking counsel . . . 
if they have to report their agreements with counsel, as well 
as the fees and the details of such agreements.''\18\ This 
assertion mischaracterizes the rule.
---------------------------------------------------------------------------
    \18\Written testimony of Joseph Baumgarten, Esq., Subcommittee on 
Health, Employment, Labor and Pensions, Committee on Education and the 
Workforce, U.S. House of Representatives, April 27, 2016, p 7.
---------------------------------------------------------------------------
    The LMRDA, Section 203(c), exempts law firm/consultant 
reporting when an employer retains a labor relations consultant 
or attorney solely for representation:

        Nothing in this section shall be construed to require 
        any employer or other person to file a report covering 
        the services of such person by reason of his . . . 
        agreeing to represent such employer before any court, 
        administrative agency, or tribunal of arbitration or 
        engaging or agreeing to engage in collective bargaining 
        on behalf of such employer[.]

    Moreover, DOL's instructions to its LM-10 and LM-20 
reporting forms match the statute:

        As a general principle, no reporting is required for an 
        agreement or arrangement to exclusively provide legal 
        services. For example, no report is required if a 
        lawyer or other consultant revises persuasive 
        materials, communications, or policies created by the 
        employer in order to ensure their legality rather than 
        enhancing their persuasive effect. In such cases, the 
        consultant has no object to persuade employees.\19\
---------------------------------------------------------------------------
    \19\81 FR 16028, 16044 (March 24, 2016).

    Republican witness Sharon Sellers, who appeared on behalf 
of the Society for Human Resource Management at the April 27th 
hearing, testified that she conducts trainings for businesses 
that cover ``what supervisors can and cannot communicate to 
their employees under the NLRA.'' Yet, she asserted that her 
``main concern is the clients I serve may avoid seeking my 
training if the services are now reportable under the 
rule.''\20\
---------------------------------------------------------------------------
    \20\Testimony of Sharon Sellers, Subcommittee on Health, 
Employment, Labor and Pensions, Committee on Education and the 
Workforce, U.S. House of Representatives, April 27, 2016, pp. 20-22. 
Ms. Sellers also raised a concern that consultants who fail to report 
activity due to a mistaken understanding of a reporting obligation will 
be subject to criminal sanctions. Criminal sanctions only apply in the 
rare case when a person willfully violates the law, such as by making a 
false statement involving a material fact, knowing it to be false. This 
is not something that could arise from negligence or a good faith 
misunderstanding. LMRDA Section 439(a) states: ``Any person who 
willfully violates this subchapter shall be fined not more than $10,000 
or imprisoned for not more than one year, or both.''
---------------------------------------------------------------------------
    Ms. Sellers' characterization of this rule is mistaken; her 
trainings clearly constitute non-reportable ``advice'' under 
the final rule. Consistent with the statute, the DOL 
specifically states in its instructions to the employer and 
consultant reports that:

        No report is required covering the services of a labor 
        relations consultant by reason of the consultant's 
        giving or agreeing to give advice to an employer. . . . 
        For example, a consultant who exclusively counsels 
        employer representatives on what they may lawfully say 
        to employees, reviews personnel policies or actions for 
        legality or to ensure a productive and efficient 
        workplace for the client, or provides guidance on 
        National Labor Relations Board (NLRB) or National 
        Mediation Board (NMB) practice or precedent is 
        providing `advice.'\21\
---------------------------------------------------------------------------
    \21\81 FR 16028, 16044 (March 24, 2016).

    Ms. Sellers also stated that employers ``would be worried 
about having their name made public'' because they ``do not 
want their name on the form.''\22\ Again, DOL reports only have 
to be filed when attorneys or consultants are engaged in 
persuasion activities.
---------------------------------------------------------------------------
    \22\Testimony of Sharon Sellers p. 37, 91.
---------------------------------------------------------------------------
    What is it, exactly, that is so objectionable about the 
disclosure of agreements with a behind-the-scenes union-
avoidance consultant? Perhaps, employers do not want to expose 
their relationships with union busters to their employees. In 
his book Confessions of a Union Buster, Martin Jay Levitt--who 
had been a leader in the union-avoidance industry for twenty 
years--wrote:

        Union busting is a field populated by bullies and built 
        on deceit. A campaign against a union is an assault on 
        individuals and a war on the truth. . . . The only way 
        to bust a union is to lie, distort, manipulate, 
        threaten, and always, always attack. The law does not 
        hamper the process. Rather, it serves to suggest 
        maneuvers and define strategies.\23\
---------------------------------------------------------------------------
    \23\Martin Jay Levitt, Confessions of a Union Buster, 1 (Crown 
Publishers, 1993).

    When asked, ``Why would someone be afraid to be listed?'' 
---------------------------------------------------------------------------
on the DOL forms, Mr. Newman testified:

        Because they like to have these consultants operating 
        in the shadows . . . the industry has found they are 
        more persuasive when they operate in the shadows 
        because employees do not know.

    Mr. Newman's testimony also provided examples of 
consultants' advertisements.\24\ One firm even promises a money 
back guarantee for its ability to defeat union organizing 
campaigns, proclaiming in all caps, ``IF YOU DON'T WIN, YOU 
DON'T PAY.'' As Mr. Newman explained:
---------------------------------------------------------------------------
    \24\Testimony of Jonathan D. Newman, Esq., Subcommittee on Health, 
Employment, Labor And Pensions, Committee on Education and the 
Workforce, U.S. House of Representatives, April 27, 2016, pp 24, 
available at, http://democrats-edworkforce.house.gov/imo/media/doc/
NewmanTestimony_w.Appendix042716.pdf

        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 . . . 
        [that] 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.'

    By enacting the LMRDA, Congress sought to shine a spotlight 
on the persuader industry. The 1959 Senate Committee Report 
accompanying the LMRDA stated that persuader activities ``are 
disruptive of harmonious labor relations and fall into gray 
area'' between proper and improper conduct. To address this 
potential for harm, Congress chose to rely on transparency. As 
Justice Brandeis famously said, ``Publicity is justly commended 
as a remedy for social and industrial diseases. Sunlight is 
said to be the best of disinfectants; electric light the most 
efficient policeman.''\25\ The DOL's rule brings the 
regulations back in line with the statutory mandate.
---------------------------------------------------------------------------
    \25\Buckley v. Valeo, 424 U.S. 1, 67 (1976) (quoting L. Brandeis, 
Other People's Money 62 (National Home Library Foundation ed. 1933)).
---------------------------------------------------------------------------
    In sum, direct persuaders (those who speak directly to 
employees) have long been disclosing their agreements under the 
LMRDA, but these disclosures have not chilled employers' 
efforts to hire them. For example, FedEx Freight Corporation 
agreed to pay LRI Consulting Services $3,000 per day as a 
direct persuader in April 2016,\26\ and the Laboratory 
Corporation of America agreed to pay LRI Consulting $375 per 
hour as a direct persuader.\27\ As Mr. Newman testified: ``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.''
---------------------------------------------------------------------------
    \26\LM-20 Form, available at, https://olms.dol-esa.gov/query/
orgReport.do?rptId=618922&rptForm=LM20Form
    \27\LM-20 Form, available at, https://olms.dol-esa.gov/query/
orgReport.do?rptId=618921&rptForm=LM20Form
---------------------------------------------------------------------------

THE ABA RULES OF PROFESSIONAL CONDUCT DO NOT PROHIBIT PUBLIC DISCLOSURE 
OF ARRANGEMENTS BETWEEN UNION AVOIDANCE CONSULTANTS AND EMPLOYERS, NOR 
      DO THEY VIOLATE ATTORNEY CLIENT PRIVILEGE OR CONFLICT WITH 
             CONGRESSIONAL INTENT REGARDING CONFIDENTIALITY

    As the U.S. Court of Appeals for the Sixth Circuit 
explained when upholding the LMRDA's reporting requirements for 
attorneys:

        [A]s long as an attorney confines himself to the 
        activities set forth in section 203(c), [rendering 
        legal advice and representing a client in legal 
        proceedings or in bargaining] he need not report, but 
        if he crosses the boundary between the practice of 
        labor law and persuasion, he is subject to the 
        extensive reporting requirements.''\28\
---------------------------------------------------------------------------
    \28\Humphreys v. Donovan, 755 F.2d 1211, 1216 (6th Cir. 1985) 
(emphasis added); accord Price v. Wirtz, 412 F.2d 647, 651 (5th Cir. 
1969) (en banc).

    The American Bar Association (ABA) contends that this rule 
impinges on attorneys' broader ethical duty of confidentiality. 
The ABA claims that the rule ``will conflict with lawyers' 
existing state rules of professional conduct regarding client 
confidentiality, and will seriously undermine both, the 
confidential lawyer-client relationship, and the employers' 
fundamental right to effective counsel.''\29\ Republicans go 
further and contend that this rule ``is an attack on the 
fundamental right of employers to seek legal counsel.'' These 
arguments do not withstand scrutiny.
---------------------------------------------------------------------------
    \29\Statement of Paulette Brown, President of the American Bar 
Association, April 27, 2016, p 2.
---------------------------------------------------------------------------
    The ABA's Model Rule of Professional Conduct Sec. 1.6 
states that attorneys should not reveal ``information relating 
to the representation of a client'' but makes an exception for 
disclosure ``to comply with other law''--such as the LMRDA.\30\ 
This exception is what allows attorneys to disclose the 
identity of clients under other laws, such as the Lobbying 
Disclosure Act, and to disclose cash transfers from a client in 
excess of $10,000 on IRS Form 8300.
---------------------------------------------------------------------------
    \30\Forty-nine states and the District of Columbia have adopted 
professional conduct rules patterned on the ABA Model Rules, and 
California has a substantially similar rule.
---------------------------------------------------------------------------
    The Democratic witness, Jon Newman, who is a member of the 
ABA, stated:

        Very simply, where disclosure is required by federal 
        law, the Rule 1.6 restrictions do not apply. The Rule, 
        therefore, is completely consistent with state bar 
        ethics rules that may govern attorneys that engage in 
        persuader activity.\31\
---------------------------------------------------------------------------
    \31\Testimony of Jonathan D. Newman, Esq., Subcommittee on Health, 
Employment, Labor and Pensions, Committee on Education and the 
Workforce, U.S. House of Representatives, April 27, 2016, p 18, 
available at, http://edworkforce.house.gov/uploadedfiles/
testimony_newman.pdf

    In a letter submitted to the Committee, law professors from 
across the country have affirmed that the LMRDA's reporting 
requirements, and the DOL's final rule, are consistent with an 
attorney's responsibility to maintain confidentiality.\32\ 
Likewise, over 500 attorneys--244 of whom are ABA members--
submitted a letter in support of the DOL rule and to voice 
their concern about the ABA ``taking sides in a labor-
management issue contrary to the views of its members who 
represent workers and unions.''\33\
---------------------------------------------------------------------------
    \32\Letter from Law Professors to Chairman Kline and Ranking Member 
Scott, May 16, 2016, available at, http://democrats-
edworkforce.creative.house.gov/imo/media/doc/
34%20Law%20Professors%20Letter%20to%20HEW%20Committee%20%28003%291.pdf
    \33\Letter from Labor Attorneys to Chairman Kline and Ranking 
Member Scott, May 17, 2016, available at, http://democrats-
edworkforce.creative.house.gov/imo/media/doc/
5.17.16LaborLawyerPersuaderLetter.pdf
---------------------------------------------------------------------------
    A second objection raised by the ABA is that the DOL rule 
will force attorneys to disclose information protected by the 
attorney-client privilege. A Republican witness, William 
Robinson, questioned, ``How can labor lawyers defend against 
accusations that they have violated the new rule?'' and added 
``[t]he only way . . . would be to say what the [lawyer's] 
advice was, to disclose the advice, to lay it all on the table, 
which effectively would erase the client confidentiality of the 
conversation.''\34\ This criticism is unfounded.
---------------------------------------------------------------------------
    \34\Transcript of the Hearing before the Subcommittee on Health, 
Employment, Labor and Pensions, Committee on Education and the 
Workforce, U.S. House of Representatives, April 27, 2016, Tr. pp. 32, 
56.
---------------------------------------------------------------------------
    First, as a matter of law, privileged attorney-client 
communications are exempt from disclosure under the LMRDA. Sec. 
204 of the LMRDA states:

        [n]othing contained in this chapter shall be construed 
        to require an attorney . . . to include in any report . 
        . . any information which was lawfully communicated to 
        such attorney by any of his clients in the course of a 
        legitimate attorney-client relationship.

    Second, the DOL made clear in its instructions to the 
Consultant's Report (Form LM-20), a determination of whether 
activities were intended to persuade employees is an objective 
inquiry:

        To be reportable, as noted above, such activities must 
        be undertaken with an object to persuade employees, as 
        evidenced by the agreement, any accompanying 
        communications, the timing, or other circumstances 
        relevant to the undertaking.\35\
---------------------------------------------------------------------------
    \35\87 F.R. 16043 (emphasis added).

    Third, the preamble to the rule adds further clarity on 
what must be disclosed during an enforcement investigation. It 
states that ``in determining the intent of a consultant's 
activity . . . the test is not subjective.'' It adds: ``[e]very 
communication from the consultant to the employer would not be 
analyzed; rather, only communications created by the consultant 
and intended for dissemination or distribution to 
employees.''\36\
---------------------------------------------------------------------------
    \36\87 F.R. 15969-70.
---------------------------------------------------------------------------
    Given that the LMRDA and the DOL's rule ensure adequate 
protections for attorneys' ethical duties, there is no 
principled reason why the disclosure of persuader services 
offered by attorneys should be shielded from employees and the 
public, while the very same activities would be reported by 
their non-attorney colleagues in the union-avoidance industry.
    Finally, the ABA contends that the LMRDA's exemption of 
privileged attorney-client communications under Section 204 
``strongly suggests that Congress recognized and sought to 
protect the ethical duty that lawyers have to protect client 
confidences, whether or not that client information is 
technically privileged.''\37\ To the contrary, in 1959, 
Congress considered and rejected the ABA's views when enacting 
the LMRDA.
---------------------------------------------------------------------------
    \37\Statement for the Record of Paulette Brown, American Bar 
Association, submitted to the Subcommittee on Health, Employment, Labor 
and Pensions, Committee on Education and the Workforce, U.S. House of 
Representatives, April 27, 2016. at 7 n.9.
---------------------------------------------------------------------------
    During its midwinter meeting in 1959, the ABA adopted a 
resolution regarding the LMRDA which stated in part:

        no such legislation should require report or 
        disclosure, by either attorney or client, of any matter 
        which has traditionally been considered as confidential 
        between a client and his attorney, including but not 
        limited to the existence of the relationship of 
        attorney and client, [and] the financial details 
        thereof . . .\38\
---------------------------------------------------------------------------
    \38\See Humphreys, 755 F.2d at 1218 (quoting the ABA's 1959 
resolution) (emphasis added).

    The House version of LMRDA contained a confidentiality 
exemption almost identical to the ABA's 1959 resolution, which 
would have foreclosed disclosure of any persuader arrangement 
if it was conducted by an attorney.\39\ However, the House 
version of the bill was rejected by the Conference Committee, 
and the Senate version of the bill--which contained the much 
narrower exemption only for attorney-client privilege, but 
excluded the ABA-recommended confidentiality provision--was 
enacted into law as LMRDA section 204. Moreover, an argument 
that Congress had intended to preclude disclosure of an 
attorney client relationship was rejected by multiple United 
States Courts of Appeal when upholding the LMRDA's reporting 
requirements for attorneys.\40\
---------------------------------------------------------------------------
    \39\H.R. 8342, 86th Cong., 2d Sess. Sec. 204 (1959), U.S. Code 
Cong. & Admin. News 1959, p. 2318.
    \40\See, e.g., Humphreys et al v. Donovan, 755 F.2d 1211, 1219 (6th 
Cir. 1985); Wirtz v. Fowler, 372 F.2d 315, 332-33 (5th Cir. 1966), 
rev'd in part on other grounds, Price v. Wirtz, 412 F.2d 647 (1969); 
Douglas v. Wirtz, 353 F.2d 30, 33 (4th Cir. 1965).
---------------------------------------------------------------------------

                  PENDING LITIGATION ON PERSUADER RULE

    Three lawsuits were filed in federal district courts in 
Minnesota, Texas, and Arkansas requesting a preliminary 
injunction of the persuader rule. Plaintiffs have raised 
essentially the same six objections as were voiced at the April 
27, 2016, legislative hearing:\41\ the persuader rule (1) is 
contrary to the LMRDA because it eliminates the advice 
exception; (2) chills employer free speech or is otherwise 
unconstitutional under the First Amendment; (3) is 
unconstitutionally vague under the Fifth Amendment; (4) is 
arbitrary and capricious under the Administrative Procedures 
Act; (5) violates the Regulatory Flexibility Act by failing to 
undertake a small business regulatory impact review; and (6) 
violates attorney-client privilege and attorneys' ethical duty 
of confidentiality.
---------------------------------------------------------------------------
    \41\In the Minnesota case, Labnet, Inc. et al v. U.S. Dep't of 
Labor et al., Case No. 0:16-CV-00844 (D. Minn), the plaintiffs are 
Labnet Inc., an association of management-side labor law firms, and 
others; in Texas, NFIB v. Perez, 5:16-CV-00066 (N.D. Tex.), the 
plaintiffs are the National Federation of Independent Businesses (NFIB) 
and others; and in Arkansas, Associated Builders and Contractors of AR 
v. Perez, Case 4:16-cv-00169-KGB (E.D. Ark), the plaintiffs also 
include the National Association of Manufacturers and others.
---------------------------------------------------------------------------
    The district court in Lubbock, Texas issued a preliminary 
injunction on June 27, 2016, and found that the plaintiffs, led 
by the National Federation of Independent Business, had 
demonstrated a substantial likelihood of success on all six 
claims. Curiously, the Texas court issued a 90-page Order that 
was virtually identical to the Proposed Order the plaintiffs 
had filed earlier that day, including the same typos (such as 
the misspelling of a witness' name and missing punctuation). 
DOL appealed that ruling to the Fifth Circuit Court of Appeals 
on August 25.
    The Minnesota district court rejected the plaintiffs' 
request for a preliminary injunction on June 22, 2016. The 
Court stated the plaintiffs had no likelihood of success on 
their claims that the rule violates the First Amendment, 
conflicts with the attorney-client privilege, is 
unconstitutionally vague, or violates the Regulatory 
Flexibility Act. In denying the motion for a preliminary 
injunction, the Minnesota court found that DOL's previous 
interpretation of the LMRDA's reporting requirements ``was 
underinclusive,''\42\ but nonetheless expressed concern that 
the final rule could potentially conflict with the LMRDA by 
requiring the reporting of ``advice'' in certain situations. 
The Court stated that ``rule plainly has multiple valid 
applications,''\43\ but the question of whether the DOL had 
correctly drawn the line between advice and persuasion would be 
most appropriately considered as part of an ``actual 
enforcement action.''\44\
---------------------------------------------------------------------------
    \42\Labnet, No. 0:16-CV-00844 (D. Minn. June 22, 2016) at 13.
    \43\Id. at 33.
    \44\Id.
---------------------------------------------------------------------------
    The Arkansas court has not ruled as of the circulation of 
these minority views.
    Two district court decisions at a preliminary stage in the 
proceedings certainly do not invalidate the rule, despite 
contentions made by some of the business groups challenging it. 
These two decisions are preliminary, are not decisions on the 
merits, and may be overturned upon appeal. Further, they are 
limited to two district courts. It would be inappropriate to 
draw any conclusions based on these preliminary decisions, 
where courts have not made any final determinations on the 
merits.

                               AMENDMENTS

    An amendment was offered by Mr. Pocan during the May 18, 
2016 markup. The amendment would have added a preamble to H.J. 
Res. 87 detailing how the LMRDA requires the disclosure of both 
direct and indirect persuader activity and how the DOL's rule 
is necessary to effectuate that statutory direction. The 
amendment was ruled non-germane by the chair. No vote was 
taken.

                     ROLL CALL VOTE ON H.J. RES. 87

    H.J. Res. 87 was reported on a straight party line vote of 
22 ayes and 13 nays (with 3 democrats not present).

                               CONCLUSION

    A primary goal of the LMRDA is to ensure transparency 
during union elections and in collective bargaining by 
requiring employers and consultants who engage in direct or 
indirect persuader activities to publicly disclose their 
agreements. The DOL's persuader rule implements this mandate by 
closing a massive loophole that excluded disclosure of indirect 
persuader agreements. This rule helps to level the playing 
field for workers seeking to form a union.
    The Association of Flight Attendants, the International 
Association of Machinists and Aerospace Workers, the United 
Steel Workers, the AFL-CIO, the American Federation of State, 
County, and Municipal Employees (AFSCME), and United Auto 
Workers have all submitted letters to the Committee in support 
of the DOL's persuader rule. Over 500 attorneys, many of whom 
are members of the ABA, who practice labor law have also 
written the Committee in support of the rule.
    While productivity has increased substantially over the 
past 40 years, real wages have lagged behind, and far too many 
families are finding it hard to get ahead. Our nation is 
stronger when prosperity is broadly shared. One necessary 
ingredient of shared prosperity is working people banding 
together and raising their voices. Strengthening workers' right 
to organize and form a union can help workers secure the fruits 
of their productivity. However, by enabling employers to keep 
their anti-union consulting arrangements secret, workplace 
democracy is frustrated. H.J. Res. 87 is intended to make it 
harder for workers to organize unions. It should be rejected.
                                   Robert C. ``Bobby'' Scott.
                                   Susan A. Davis.
                                   Joe Courtney.
                                   Jared Polis.
                                   Frederica S. Wilson.
                                   Mark Pocan.
                                   Hakeem S. Jeffries.
                                   Alma S. Adams.
                                   Ruben Hinojosa.
                                   Raul M. Grijalva
                                   Marcia L. Fudge.
                                   Gregorio Kilili Camacho Sablan.
                                   Suzanne Bonamici.
                                   Mark Takano.
                                   Katherine M. Clark.
                                   Mark DeSaulnier.
```