Vice President, Labor Policy, U.S. Chamber of Commerce
May 24, 2017
In an op-ed published in yesterday’s Wall Street Journal, the newly-installed Secretary of Labor, Alexander Acosta, offered some insights about his approach to unraveling the Obama-era’s regulatory mess, including the so-called persuader rule, which his department plans to rescind, and rightfully so.
As this blog noted last year, the Department of Labor (DOL) released its 446 page behemoth known as the final persuader rule in March 2016 after proposing it five years prior. At its core, the rule sought to all but eliminate the “advice exemption” under the Labor-Management Reporting and Disclosure Act (LMRDA), which explicitly states that labor relations consultants who advise employers about certain employment matters are not required to report information about their consulting arrangements.
A DOL interpretation of the advice exemption that tracked the statute had been in place since 1962. It generally held that labor consulting arrangements were exempt from disclosure if labor consultants did not speak directly with employees to persuade them one way or another about joining a union.
The Obama administration rejected that longstanding interpretation and sought to impose a much more sweeping standard, similar to what the Clinton administration had tried to do during its last days in power in January 2001. Unlike Clinton’s attempt, however, the Obama administration used the more formal process under the Administrative Procedures Act (APA), which requires public notice and comment.
Not long after the final rule was published, two separate federal courts—one in Minnesota and one in Texas—addressed the legality of Obama’s persuader rule. The U.S. District Court for the District of Minnesota concluded “that plaintiffs have a strong likelihood of success on their claim that the new rule conflicts with the plain language of the [LMRDA],” but declined to issue an injunction against DOL. The U.S. District Court for the Northern District of Texas was less charitable and issued a nationwide injunction against enforcement of the rule, saying that DOL’s interpretation “is not merely fuzzy around the edges….[it] is defective to its core because it entirely eliminates the LMRDA’s Advice Exemption.”
Observers of labor policy have been wondering how the Trump administration would deal with the persuader rule in court, as it has asked for and received at least two extensions in the legal challenge against it. Secretary Acosta’s op-ed, in which he says the Department “will engage in a new rule-making process, proposing to rescind the rule” suggests that it will accept the opinion of the court and give the Obama persuader rule the dismissal it deserves.