WASHINGTON, D.C.  — The National Federation of Independent Business, the nation’s leading advocate for small businesses, filed comments objecting to the Department of Labor’s new, so-called “persuader” rule under the Labor-Management Reporting and Disclosure Act of 1959, which requires certain public financial filings for companies and unions.  For nearly 50 years the Department of Labor has recognized that legal advice is excluded from reporting under the statute.  The proposed new rule would force lawyers and law firms that counsel a small business on most labor relations matters, and whether the business has a union or not, to disclose not only their work with that client, but also all fees and arrangements for all clients for all labor relations services.

This creates an ethical dilemma for lawyers, who will be forced to disclose financial information about all clients for which the lawyers have not provided “persuader” services.  The net result could well be that many lawyers will no longer take on clients seeking labor relations counsel in order to avoid public disclosures of all their clients and their labor relations work. This is of great concern to small businesses that typically cannot afford to employ in-house legal counsel, and rely on counsel from outside lawyers or law firms.

“With no in-house counsel on their side, this will hit small business owners disproportionately hard since they are left with no option when seeking advice on labor law,” said Karen Harned, executive director of NFIB’s Small Business Legal Center. “Small business owners will be left trying to figure out complicated questions on labor law on their own because of this rule.”

Under the new rule, small-business owners could have trouble finding counsel on questions on any union-related question.  More information can be found in NFIB’s comments on the rule on the website.

NFIB  is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses.

SOURCE: NFIB