BREAKING NEWS: Federal Court Blocks DOL’s New Persuader Rule
On June 27, 2016, a federal court in Texas issued a preliminary injunction temporarily blocking the implementation of the Department of Labor’s controversial new Persuader Rule in National Federation of Independent Business, et al. v. Thomas E. Perez, et al., Case No. 5:16-cv-00066. Under this new rule, which was published earlier this year, any agreements for “indirect persuader activities” entered into on or after July 1, 2016 would be subject to new public reporting requirements. Both the employer and the employer’s consultants, including law firms, would be required to disclose the persuader arrangement and the amount of fees paid for such indirect persuader activities. These indirect persuader activities included such things as training supervisors regarding union avoidance, drafting union campaign materials and even revising employer handbooks.
In the 90-page decision, the U.S. District Court for the Northern District of Texas found that the plaintiffs, a mix of business groups, states and others who were challenging the legality of the new rule, were likely to succeed on their legal challenge and that they had demonstrated that the implementation of the rule would cause irreparable harm, necessitating an injunction. The Court then applied the injunction to the DOL on a nationwide basis.
This ruling is preliminary and could be overturned on appeal. Employers and their consultants, including law firms, will at least have a temporary reprieve while National Federation of Independent Business winds its way through the court.
Ice Miller recommends that employers work closely with their legal counsel to ensure that an engagement addendum for indirect persuader activity is in place prior to July 1, 2016. This addendum will cover the possibility that the injunction could be reversed on appeal. This decision, however, is clearly a step in the right direction for employers challenging the Department of Labor’s bold attempt to expand its rule-making authority.
If you have additional questions about the Persuader Rule, contact Paul Bittner or a member of our Labor and Employment practice.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.