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The U.S. Department of Labor’s (DOL) so-called “persuader rule” is not having a very good month, as a federal district court in Texas on June 27 issued a preliminary injunction ordering the Department not to enforce the rule nationwide.
As this blog reported, just last week another federal court in Minnesota declined to take that step but called into question whether the rule would survive judicial scrutiny, saying “that plaintiffs have a strong likelihood of success on their claim that the new rule conflicts with the plain language of the statute,” referring to the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).
In this week’s decision, United States Senior District Judge Sam R. Cummings analyzed the facts and various legal issues and concluded that the plaintiffs in the Texas case had satisfied the legal requirements to obtain a preliminary injunction.
The principle issue concerns the LMRDA’s “advice exemption,” which exempts labor relations consultants and employers from having to report information about their consulting arrangements when the consultant only provides advice but does not engage directly with employees. The new persuader rule would vastly narrow the scope of that exemption to include both direct and indirect communication with employees regarding unionization.
In analyzing the case, the decision noted that “DOL and the courts have long interpreted the LMRDA’s Advice Exemption as exempting from reporting all advice that had an object to persuade and would, absent the exemption, otherwise trigger reporting.” It further observed that DOL’s new persuader rule “is not merely fuzzy around the edges….[it] is defective to its core because it entirely eliminates the LMRDA’s Advice Exemption.”
The persuader rule was due to become effective on July 1, but yesterday’s injunction should put a stop to that, at least for now, which is welcome news indeed for the business community.