- Persuader Rule "Permanently Enjoined" from Taking Effect
- December 19, 2016
- Law Firm: Shawe Rosenthal LLP - Baltimore Office
- On November 16, 2016, a Texas federal court judge converted a temporary injunction to a permanent one barring implementation of the Department of Labor’s new interpretation of the advice exception to the “persuader rule.”
Under the “persuader rule” in the Labor-Management Reporting Disclosure Act of 1959 (LMRDA), employers are required to file reports and disclose expenditures to the DOL each time they engage a consultant to persuade employees regarding employees’ rights to organize. However, the LMRDA provides an “advice exception,” which had been interpreted for over 50 years to exclude an employer’s discussions with its labor relations consultants - including legal counsel - regarding opposition to a union organizing campaign, as long as the consultants had no direct contact with employees. Under the new rule, however, the scope of an employer’s reporting obligations under the LMRDA has been substantially expanded, and will include a broad range of activities beyond “direct contact” provided by labor relations consultants - including attorneys.
Three lawsuits were filed, in Arkansas, Minnesota, and Texas, to block implementation of the revised persuader rule, including one by our firm and Seaton, Peters & Revnew, P.A. of Minneapolis on behalf of Worklaw Network, a nationwide alliance of labor and employment firms representing management.
As discussed in our June 30, 2016 E-Update, the Texas court issued a preliminary injunction in June, finding that the plaintiffs are likely to succeed in their claims against the DOL. In converting the preliminary injunction to a permanent one, the Texas court reiterated its finding that the rule entirely eliminated the LMRDA’s Advice Exemption.
The DOL has appealed the court’s initial preliminary injunction ruling to the U.S. Court of Appeals for the 5th Circuit. We will keep you posted on further developments.