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Federal Judge Permanently Blocks DOL "Persuader" Rule

    Client Alerts
  • November 21, 2016

On Tuesday, a federal district court in Texas issued a permanent injunction blocking implementation of the Department Of Labor’s so-called “Persuader” rule. The rule requires legal counsel and other persons or entities that provide behind-the-scenes advice to employers regarding the right to organize or bargain collectively to disclose to DOL this relationship and amounts paid by the employer. Current law only requires disclosure by providers who actually meet with employees on behalf of the employer as part of the employer’s union-free efforts.

In June, the federal district court issued a temporary injunction blocking the rule’s original July effective date. Following a full hearing, that same court issued a permanent injunction, concluding that the Persuader rule violates employers’ constitutional rights, federal labor laws and the rights of legal counsel to provide privileged advice to clients. DOL argued that the rule only slightly expanded current disclosure requirements, but the court drew a sharp distinction between advisors that directly deal with employees undergoing labor organizing activities and those that provide background advice and assistance to employers.

DOL can appeal this decision to the Fifth Circuit. However, such appeal would not be heard before the end of the Obama administration. Given the Trump transition team’s initial expression of intent with regard to labor issues, it may decide not to pursue such appeal, marking the end of this regulatory effort.