What Alabama Small Business Owners Should Know About the Persuader Rule

Date: May 03, 2016

Attorney General Luther Strange is leading coalition opposing labor regulation.

What Alabama Small Business Owners Should Know About the Persuader Rule

At Alabama Small Business Day on April 5, Attorney General Luther Strange addressed the NFIB members in attendance about an important labor rule he is fighting against: the persuader advice exemption rule.

Attorney General Strange is leading a 13-state coalition with other attorneys general to fight against this proposed rule, which would significantly hamper small businesses’ ability to consult with a lawyer on labor issues.

Under the proposed rule, lawyers and law firms that counsel a small business on labor relations matters would be forced to disclose their work with that client, as well as all fees and arrangements for all clients seeking labor relations services. This move would undermine the longstanding protection over the confidentiality of attorney-client communications and place an unfair burden on small business owners. Small businesses, after all, are the ones who need to hire outside counsel when an issue arises because they cannot afford to keep an attorney on staff. If this rule is enacted, it’s likely that many lawyers will stop taking on the clients—small businesses—who come to them for labor relations counsel.

“Small businesses make up over 90 percent of all businesses both in Alabama and across America,” Attorney General Strange said in a press release about the coalition. “These local job providers can least afford further unwarranted federal mandates that will erode their ability to compete. I have joined with my fellow Attorneys General to stand up for fairness and protect small businesses from this unnecessary federal overreach.”

The proposed rule would also bring legal advice under the Department of Labor’s “persuader” regulations concerning engagement in the unionization process. Currently legal counsel falls outside those rules, as long as the attorney doesn’t engage with workers and the small business owner is free to either accept or reject the legal advice offered. But if the rule is enacted, any lawyer offering advice to small business owners would be subject to these persuader rules.

The Department of Labor announced its final draft of the persuader advice exemption rule on March 23, and it was scheduled to go into effect at the end of April. On April 1, NFIB joined the National Association of Home Builders and other business groups to file a lawsuit against the Department of Labor for the persuader rule. On April 22, NFIB asked a U.S. District court to temporarily block the rule until the lawsuit challenging its constitutionality is settled.

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