In the United States, the Labour-Management Reporting and Disclosure Act (LMRDA) requires employers and labour relations consultants to report the details of “persuader activities” to the U.S. Department of Labour (DOL). A consultant engages in “persuader activities” if it is contracted to counter a union organizing drive or collective bargaining effort. The reporting requirements are intended to bring transparency to the activities of those U.S. consultants who discourage employee organizing drives and engage in so-called “union-busting” activities.
The Current Reporting Requirements and the Exemption for Legal Advice
Currently, U.S. attorneys have very limited reporting requirements under the LMRDA because it contains a broad exemption for legal advice.
Attorneys are only required to report “persuader activities” if they have direct contact with employees. For example, attorneys who prepare and actually deliver persuasive material to employees have reporting requirements under the LMRDA.
In contrast, U.S. attorneys are exempt from the reporting requirements when they provide advice on the legality of the employer’s persuasive material and activity.
As a result, currently, U.S. attorneys can prepare an entire speech or document for an employer without triggering the reporting requirements on the understanding that the material can reasonably be regarded as a form of written legal advice to the employer.
The Proposed Reporting Requirements and the Threat to Client Confidentiality
On June 21, 2011, the DOL proposed changes to its longstanding interpretation of the legal advice exemption.
The new interpretation would require attorneys to file periodic disclosure reports when they prepare “persuasive” material for employers, even if the attorney is not responsible for disseminating the material and has no direct contact with employees.
Examples of “persuader activity” that would no longer constitute legal advice include:
- coordinating and directing the activities of management to engage in the persuasion of employees;
- drafting policies for the employer that have an object to persuade employees;
- providing letters to employers for distribution to employees.
According to the American Bar Association, the changes to the reporting requirements would force attorneys to disclose confidential client information, including the existence of the attorney-client relationship, the identity of the client, the general nature of the legal representation, a description of the legal tasks performed, as well as detailed information regarding all legal fees and disbursements.
How Will the Proposed Reporting Requirements Affect Canadian Lawyers?
If a Canadian lawyer is retained to provide persuader activities (in whole or in part of the overall legal advice mandate), there could be a reporting requirement on the part of the employer depending on the nature of the advice given. If, for example, the Canadian lawyer is giving advice connected with the employer’s U.S. operations, an employer may very well have a reporting requirement. In such a situation, the Canadian lawyer, who cannot give U.S. legal advice, would really be acting as a consultant. However, it is difficult to envision the DOL attempting to enforce the proposed reporting requirements on Canadian lawyers. Historically, the LMRDA has been applied only to the activities of persons or organizations within the territorial jurisdiction of the U.S. and the Canadian lawyer would likely have extra jurisdictional immunity from the LMRDA.
A more common scenario is a Canadian lawyer giving advice to a U.S. employer about their Canadian operations. While Canadian lawyers should be shielded from the LMRDA’s application, one wonders whether the U.S. employer would have to disclose the Canadian lawyer’s activities as they relate to employer’s Canadian operations, assuming those activities can be classified as “persuader activities”. Certainly the Canadian advice would have no impact on American trade unions or employees. Moreover, it is difficult to imagine that the DOL would seek to export U.S. legal standards about what is acceptable employer conduct in an organizing campaign to other countries.
In any event, I suppose we will have to wait and see what U.S. attorneys will be advising their U.S. clients about reporting Canadian legal advice.