Federal Judge Scraps DOL's 'Persuader Rule'

November 17, 2016

U.S. District Judge Samuel Cummings placed a permanent block on the Department  of Labor's "Persuader Rule" Wednesday, citing his belief that the rule is "unlawful."

Officially named the "Interpretation  of  the  ‘Advice’  Exemption  in  Section  203(c)  of  the  Labor-Management  Reporting  and  Disclosure  Act", Judge Cumming's finding the rule unlawful has maintained employers’ right to obtain advice from labor relations experts. The persuader rule would have required reports from employers and their advisers, including lawyers, about the types of services they offered and amount of fees charged. The requirements would be added to duties already imposed under the federal Labor Management Reporting and Disclosure Act.

In his brief, Cummings said, “The Court is of the opinion that the Department of Labor’s [rule] … should be held unlawful and set aside. The Court’s preliminary injunction preventing the implementation of that Rule should be converted into a permanent injunction with nationwide effect.”

Jeff Londa, an attorney with Ogletree Deakins who represented the National Federation of Independent Business in challenging the rule, gave this example of how the rule would have worked had it been allowed to stand:

“If an employer went to a lawyer and asked for advice on how do I prepare employee communications’ or `how do I write it to convince my employees not to join a union,’ it had to be disclosed,” Londa said. Most lawyers resisted the idea of disclosing the identity of their clients, he added, “so basically it would have resulted in employers not getting the type of advice they needed to counter union organizing.”

Speaking for industry group, Kristen Swearingen said, “Today’s decision is another repudiation of the U.S. Department of Labor’s drastic overreach under the Obama administration. Associated Builders and Contractors is pleased that the court has ruled to maintain employers’ free speech rights and is hopeful that under a Trump administration, the department will take input from the industries it regulates seriously in developing less burdensome rules that better facilitate the conditions for growth and prosperity.” Swearingen is ABC vice president of legislative and political affairs with ABC.