Senior Vice President, Employment Policy Division, U.S. Chamber of Commerce
August 09, 2023
On August 3, the House Committee on Education and the Workforce sent a letter to the Department of Labor asking about enforcement activity at the Office of Labor-Management Standards (OLMS). The letter requests documents related to OLMS’s efforts to force companies to file so-called “persuader” reports related to the activities of their own corporate officers.
OLMS was created to enforce the Labor-Management Reporting and Disclosure Act (LMRDA), which was passed in 1959. LMRDA has two components. The first, and by far the meatiest, part of the statute relates to union democracy and financial transparency. The second deals with situations in which companies hire persuaders to discuss union issues with their workers. If a company makes an arrangement with certain individuals to act as persuaders, then the company, and the persuader, are both required to file financial disclosure reports with the OLMS.
Congress included persuader activity in the LMRDA because they wanted to ensure that workers were aware that someone discussing union issues with them might be allied with management. Typically, a persuader would be a third party hired by the company, but there are also some situations in which a persuader could be another employee, for example if a line worker was given an extra payment to persuade fellow workers, which is not part of their normal responsibilities.
What is or isn't persuader activity?
What the LMRDA did not consider to be persuader activity requiring disclosure is when a corporate officer, say a VP for human resources, engages in discussions with workers. Corporate officers were given an exemption under Section 203(e) of the statute, which states: “Nothing contained in this section shall be construed to require any regular officer, supervisor, or employee of an employer to file a report in connection with services rendered to such employer nor shall any employer be required to file a report covering expenditures made to any regular officer, supervisor, or employee of an employer as compensation for service as a regular officer, supervisor, or employee of such employer.”
As far as legislative text goes, it seems pretty straightforward. And yet, OLMS seems to have misread the legislation. In recent months, it has been sending letters to certain employers demanding that those businesses file persuader reports.
According to one of the letters, a persuader report is due because: “your company paid managerial employees’ expenses to travel to other company locations for the purpose of persuading other company employees, as well as to gather information about employees engaged in a labor dispute with your company.” The specific employee in question in this letter was the “Vice President for Employee Relations.” Again, according to the letter: “these travel expenses were not compensation for service as a regular officer, supervisor, or employee.”
One doesn’t need to be an expert in corporate management to surmise that the Vice President for Employee Relations’ regular responsibilities would include talking to employees engaged in a labor dispute. As such, a 203(e) exemption would clearly apply. Indeed, OLMS’s interpretive manual spells out this exact scenario.
In Section 254.100 of the manual it describes where an exemption would apply to a labor relations director (which sounds a lot like a VP for Employee Relations): “For example, where an employer prepares a message to his employees which attempts to persuade employees as to the manner of exercising their right to organize, and the employer then has the message conveyed to all plant employees through his labor relations director who is a regular staff member, no report would be due under section 203(a) (2) because the director would be performing as a regular employee within the meaning of section 203(e).”
Statutes and manuals guide persuader activity
This makes sense when one considers the statutory history. The LMRDA was meant to ensure that workers were aware management was speaking to them, even if the intermediary was a line worker or an outside party. If the VP for Employee Relations is speaking to workers, it’s pretty obvious that he represents management.
By contrast, the Interpretive Manual lays out a scenario in Section 254.100 where a company would have to file a persuader report for its own employees: “However, if the employer called in one of his old and trusted employees who was a drill press operator for example, and asked him (without disclosing the assignment to other employees) to persuade his fellow employees as to their right to organize, then a report would be due from the employer under 203(a)(2).”
So, if both the statute and the interpretive manual are so clear, why is OLMS attempting to force businesses to file persuader reports? To some extent, no one knows because the agency has issued no rulemaking or guidance explaining its legal rationale for going against the way the LRMDA has been understood and enforced for 64 years.
But in reality, everyone knows why. The administration has made no secret of its determination to promote unions at all costs. Demanding persuader reports where none are actually due is just another way for the government to harass employers and hopefully give a leg up to unions. Anecdotal reports suggest OLMS is now including subpoena requests with its letters, ramping things up even further.
It’s bad enough that OLMS can’t read a statute. But things have taken a really bad turn when the agency can’t even read its own interpretive manual. Fortunately, Congress has started asking questions.
About the authors
Spencer oversees the Chamber’s work on immigration, retirement security, traditional labor relations, human trafficking, wage hour and worker safety issues, EEOC matters, and state labor and employment law.