Federal District Court Enjoins Department of Labor’s New Persuader Rule

A United States District Court Judge in Lubbock, Texas has issued an Order against the United States Department of Labor (“DOL”) enjoining on a nationwide basis the DOL’s Persuader Advice Exemption Rule (“Persuader Rule”). (See Nat’l Fed’n of Indep. Bus., et al. v. Perez et al., No. 5:16-cv-00066, N.D. Tex.) 

The Persuader Rule, which had been scheduled to take effect on July 1, 2016, would severely narrow the longstanding exclusion of attorney-client communications from reporting obligations under Section 203(a) of the Labor-Management Reporting and Disclosure Act. It would force employers and their law firms, faced with a labor union’s efforts to organize the employer’s workers, to report to the DOL, among other things, the amount of the legal fees paid to the law firms on written reports that will be made publicly available by the DOL.

The District Judge’s decision enjoining implementation of the Persuader Rule will remain in effect pending a final resolution of the case on the merits following pre-trial discovery and, possibly, a trial, or until a decision by the Fifth Circuit Court of Appeals (should the DOL appeal the injunction). We will keep you apprised of future developments. For now, the Persuader Rule will not take effect on July 1.