On June 27th, 2016, a federal district court in Texas issued a preliminary injunction, temporarily blocking the Department of Labor’s (DOL) new interpretation of the “Persuader Rule.” This injunction, which is national in scope, is a big win for employers and attorneys alike as it provides both parties more latitude to discuss union avoidance issues without being subject to reporting requirements. The Texas court’s decision means that the DOL must continue to exempt an attorney from reporting to the DOL on advice given to clients pertaining to union avoidance and employee relations, as long as the attorney does not communicate directly with non-supervisory employees. For example, this injunction means that an attorney may lawfully, without reporting, prepare documents and speeches for an employer’s use during union organizing, train managers and supervisors through seminars, and develop personnel policies and practices for an employer to implement.
According to the Texas court, the DOL’s new interpretation of the Rule was improper because the DOL did not have the statutory authority to enforce its new interpretation and because the interpretation was “arbitrary, capricious, and an abuse of discretion.” Additionally, the interpretation unconstitutionally curbed and chilled employers’ and attorneys’ free speech and association rights as protected by the First Amendment.
As we reported previously in the posts: “Important update regarding DOL’s new ‘Persuader Rule’” and “DOL’s final ‘Persuader Rule’ delivers another coup to unions,” if the DOL had succeeded in changing its interpretation of the Persuader Rule, the responsibilities of attorneys across the country would have changed dramatically. There is still considerable uncertainty regarding the ultimate fate the DOL’s new “Persuader Rule.” The DOL could attempt appeal the Texas district court’s ruling, and there are several other lawsuits pending. In light of this uncertainty, we have not changed our recommendation that employers who want to fully preserve their rights to consult with their labor and employment counsel unencumbered by government regulation to enter into engagement letters prior to July 1 that expressly preserve those rights.