Wednesday, March 10, 2010

Supreme Court Approves, Despite First Amendment, Government Supervision of Legal Advice – Impact on LMRDA Battle?

In Milavetz, Gallop & Milavetz v. United States, 2010 U.S. LEXIS 2206 (2009), the Supreme Court, Justice Sotomayor writing, held that the First Amendment did not trump the provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 which prohibits bankruptcy attorneys from giving certain kinds of advice to clients, e.g., advising clients to incur more debt prior to filing for bankruptcy. Justices Scalia and Thomas each filed concurrences, Justice Scalia expressing concern about Justice Sotomayor relying on legislative history and Justice Thomas reiterating concerns expressed in earlier dissents regarding the Court’s applying a lesser level of scrutiny to what it characterizes as commercial speech.

Last December DOL released its regulatory plan for 2010 (WSJ writeup here), and it included that DOL would propose substantial changes to an employers’ obligation to report information regarding union organizing. One law firm reports the DOL is considering narrowing an existing and longstanding exemption in the Labor-Management Reporting and Disclosure Act of 1959 from reporting “advice” provided by an employer’s labor relations consultants and attorneys. In the absence of such an exemptions, section 203(a)(4) of the LMRDA (29 U.S.C. 433) requires employers to disclose certain agreements or arrangements between the employer and labor relations consultants, including those where an objective is to persuade employees regarding their rights to organize and join a labor union, or to refrain from doing so. One would have thought such governmental requirements crossed the First Amendment line, but after Monday’s decision from the Supreme Court, one wonders.

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