Court Permanently Enjoins DOL Persuader Rule

Eric Paltell
Eric Paltell
11/18/2016

As we have previously reported,  in March 2016, the United States Department of Labor modified its 54 year old “Persuader Rule,” which applies to communication with employees regarding union activity. The proposed revisions significantly  restrict employer rights to be advised on how and what information can be disseminated to employees by providing burdensome reporting requirements on both the employer and the advisors -including attorneys – assisting the  employer in responding to union organizing activity. Among other requirements, employers and their advisors would be required to publicly disclose how much was paid in fees for services provided.

In June, the U.S. District Court for the Northern District of Texas (Lubbock Division) issued a nationwide injunction preventing the  DOL from implementing  its revised Persuader Rule, which had been set to take effect on July 1, 2016. The Court found that National Federation of Independent Businesses and other plaintiffs  established a substantial likelihood of success on their claims attacking the legality of the new rule.

Earlier this week, the same Texas court permanently blocked the Persuader Rule. In National Federation of Independent Business v. Perez, the held that the DOL’s  rule “should be held unlawful and set aside,” and that the temporary injunction the court issued in June to prevent the DOL from enforcing the rule be made permanent. As a result of this permanent injunction, employers, attorneys, and HR advisors do not need to comply with the rule’s onerous disclosure requirements.

One asterisk to the ruling: the Texas  court’s June preliminary injunction order was appealed to the U.S. Court of Appeals for the Fifth Circuit. It seems likely  the November 16 decision on the permanent injunction moots that appeal.  Perhaps more importantly, most observers do not expect a Trump DOL to continue to pursue the  Persuader Rule.  As a result, while the Rule is technically “not dead yet,” it is certainly on life support.

 

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