A federal judge in Texas has declared unlawful the Department of Labor’s rule requiring extensive disclosures from companies who employ labor consultants and/or attorneys to help them deal with union organizing campaigns. The so-called “persuader rule” was temporarily blocked in late June but Wednesday’s ruling makes that injunction permanent. The court found the DOL exceeded its authority and promulgated a rule that is arbitrary, vague, and violates federal law and the Constitution. The lawsuit was brought by five business groups and was joined by ten states as intervenor-plaintiffs. The court blocked implementation of the rule on a nationwide basis because multiple states joined the suit and because the business groups had members in all 50 states. Employers worried that the rule not only forced them to disclose relationships and money spent on labor consultants, but also that the rules would require them to make similar disclosures when receiving legal advice from labor and employment attorneys. The narrowing of the advice exception was particularly troubling because of its potential to infringe on the attorney-client privilege.
The DOL could appeal the judge’s ruling to the Fifth Circuit, but that may be less likely with the change of administrations and the Department of Labor soon to be headed by a Republican appointee.