In the second decision to be issued in the three lawsuits challenging the U.S. Department of Labor’s new “Persuader Rule,” a federal judge in Lubbock, Texas, granted the request for a nationwide injunction filed by a number of employer groups and state attorneys general who had sued to challenge the rule. The injunction order in National Federation of Independent Business v. Perez at least temporarily blocks the rule from taking effect on Friday, July 1. The new rule was to apply to so-called “persuader activity” that took place pursuant to agreements between employers and their outside consultants or attorneys that are entered into on or after July 1.
The rule was intended to force reporting by employers, as well as by their third party consultants and lawyers, of information about activity conducted by the third party consultants and attorneys to “indirectly” persuade employees about their labor organizing and collective bargaining rights. Although reporting of so-called persuader activity has always been required by the Labor Management Disclosure and Reporting Act, that statute has an “advice exemption” that long has been interpreted by the DOL to exempt “advice” that might have a “persuading” object, as long as the consultant or attorney does not communicate with employees directly and is providing “advice” to the employer that the employer is free to accept or reject.
Under the new Persuader Rule, this “advice exemption” would essentially be eliminated, with the upshot being that that a broader range of consultant and attorney activity on behalf of employers would have to be reported to the DOL and made publicly available. Employers and their outside labor relations advisors and attorneys would have been required to report any employer-paid third party activity that had “an objective” of persuading employees regarding union organizing and collective bargaining.