Federal Court Halts Persuader Rule

Friday, July 22, 2016

On June 27, 2016, a U.S. District Court issued a nationwide preliminary injunction barring enforcement of the Department of Labor’s (DOL) Persuader Rule, which as of July 1 would have imposed substantial reporting obligations on labor lawyers and consultants advising employers on union matters. As a result of the injunction, enforcement of the rule’s reporting requirements will be stayed until the District Court issues a further order on the matter.

A group of business associations and states challenged DOL’s new rule, arguing that the agency lacked the statutory authority to promulgate and enforce the new rule and that the rule is arbitrary and capricious, unconstitutional, and violates the Regulatory Flexibility Act. The District Court found that the plaintiffs had a substantial likelihood of success on the merits of their claims and enjoined the DOL from enforcing the rule nationwide.

While the new rule remains on hold, attorneys and consultants are free to advise employers regarding union strategy without any reporting obligations, so long as they do not have direct contact with employees. However, employers should be proactive and consult with their labor attorneys and consultants to plan how they will comply with the rule should it go into effect.

NLBMDA 7/22/2016

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