LaborAs we explained in our client alert and blog posting on June 30, 2016, a Texas federal court on June 27 enjoined the United States Department of Labor (DOL) from implementing its new interpretation of the “Persuader Rule.” In a sweeping 86-page rebuff to DOL, the court opined that the DOL’s new interpretation of the “Advice Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act” (“New Rule” for short) is “defective to its core,” and thus it preliminarily enjoined implementation of the New Rule nationwide.

On Nov. 16, this same federal court converted its June ruling to a permanent nationwide injunction that prevents implementation of the New Rule. Senior Judge Sam R. Cummings also granted the motion for summary judgment by Texas, nine other states and various business groups. This decision is critically important to employers because it preserves their right to confidential legal representation without government interference. Prior to this decision, the DOL’s New Rule (totaling 127 pages) and its significant reporting obligations were set to take effect on July 1, 2016.

By way of background, the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA, or the Act) has long contained provisions requiring persons engaged in persuading employees concerning the exercise of their rights to organize and engage in collective bargaining pursuant to an agreement or arrangement with the employees’ employer to report the details of those agreements and arrangements. These provisions are known as the “Persuader Rule.” Traditionally, a person engaged in reportable persuader activity only if he or she had direct contact with employees. The work of labor consultants, including law firms, that had no direct contact with employees but assisted employers in advising them on how to run their union avoidance campaigns was considered exempt from reporting under the “advice exemption” found in Section 203(c) of the LMRDA.

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