Texas Judge Blocks Persuader Rule, Citing Violation of Federal Law

court room lowA Texas court has ruled to prevent the U.S. Department of Labor (DOL) “on a national basis from implementing any and all aspects of [DOL’s persuader rule] pending a final resolution of the merits of this case or until a further order of this Court, the United States Court of Appeals for the Fifth Circuit or the United States Supreme Court.”

On April 25, the DOL rewrote the Labor-management Reporting and Disclosure Act of 1959 to increase transparency in the reporting of consultants or lawyers with both direct and indirect “persuader” activities. The old rule upheld reporting requirements of direct persuader activities such as consultants talking directly to employees and fees associated with their services. The new changes target indirect activities such as speeches, talking points, letters and other campaign documentation passed onto employees through supervisors or managers. This also includes any “advice” given to an employer, defined as “recommendations regarding a decision or course of conduct.”

According to the DOL’s justification for increased transparency of persuader activities: “Some employers hire labor relations consultants to develop and implement their message in union organizing campaigns. Workers need to understand the source of the views, materials, and policies that are being used to influence their decisions so they can make the best, informed decisions about whether or not to be represented by a union or support its collective bargaining positions.”

However, a string of lawsuits in Arkansas, Minnesota, and, most recently, Texas are starting to prove that this violates the rights of attorney-client privilege, employer free speech and federal labor management law. All cases have requested preliminary injunctions, though the request was denied in the Minnesota case on the lack of evidence proving irreparable harm.

However, the courts are focusing on the persuader rule as a violation of the Labor-Management Disclosure Act as stated by the U.S. Chamber of Commerce’s Amicus Brief: “The new rule … imposes stringent disclosure obligations on attorneys, law firms, and consultants providing their employer clients what anyone would call ‘advice.’ It raises serious constitutional questions regarding employers’ statutory and constitutional right to seek advice on how to communicate with their employees.”

IWLA is following these court cases carefully and will provide more updates as necessary.

 

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