Persuader Rule – Compliance and “Safe Harbor” AgreementsJune 24, 2016 – Alerts Labor & Employment Alert
URGENT – TIME IS OF THE ESSENCE
Under federal law dating to 1959, certain consultants and the employers who hire them are required to make public financial disclosures where “an object” of the consultant’s activities is to influence employees in the exercise of their rights to join, or refrain from joining, a labor union or the exercise of their rights to engage in collective bargaining. This is referred to as “persuader activity” and has been limited to situations in which the consultant interacts directly with the employer’s employees (so-called “direct persuader activity”). Fox Rothschild has never engaged in direct persuader activity and does not intend to do so in the future.
At the same time, we regularly provide advice to our clients themselves in any number of contexts that does, or at least could, have the same object. This is referred to as “indirect persuader activity” and had never been reportable. The U.S. Department of Labor (DOL) has now changed its regulations in a manner that, if upheld by the courts, could render some such indirect persuader activity reportable. Respecting as we do the privacy and confidences of our clients, Fox Rothschild does not intend to engage in any reportable persuader activity, including providing some of the kinds of advice we historically have if it becomes reportable under the new regulation.
However, both the amended regulation and comments by the DOL concerning it make clear that it applies only where the activity takes place pursuant to an “arrangement or agreement” entered into on or after July 1, 2016. If the arrangement or agreement is in effect prior to July 1, 2016, subsequent indirect persuader activity performed under it will not be reportable, even if it takes place after that date.
In order to provide our clients with the ability to make maximum use of our knowledge in these areas without incurring a reporting obligation, we have been reaching out to confirm our agreements to provide these services with those of our clients for whom we have historically done so, as well as for others who may wish to seek our advice in these areas in the future. Should you be interested in confirming such an arrangement, without any financial or other commitment, please contact your Fox Rothschild trusted adviser immediately as time is of the essence.