{"id":1558,"date":"2016-11-17T14:09:17","date_gmt":"2016-11-17T19:09:17","guid":{"rendered":"http:\/\/employerdefensereport.com\/?p=1558"},"modified":"2026-03-20T11:42:24","modified_gmt":"2026-03-20T15:42:24","slug":"texas-judge-blocks-dol-persuader-rule-with-nationwide-permanent-injunction","status":"publish","type":"post","link":"https:\/\/www.connmaciel.com\/employer-defense-report\/texas-judge-blocks-dol-persuader-rule-with-nationwide-permanent-injunction\/","title":{"rendered":"Texas Judge Blocks DOL Persuader Rule with Nationwide Permanent Injunction"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" title=\"Persuader\" class=\"  wp-image-1595 alignleft\" src=\"http:\/\/employerdefensereport.connmaciel.stagingarea.org\/wp-content\/uploads\/sites\/2\/2016\/11\/persuader.png\" alt=\"persuader\" width=\"249\" height=\"203\" srcset=\"https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2016\/11\/persuader.png 985w, https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2016\/11\/persuader-300x245.png 300w, https:\/\/www.connmaciel.com\/employer-defense-report\/wp-content\/uploads\/sites\/2\/2016\/11\/persuader-768x626.png 768w\" sizes=\"(max-width: 249px) 100vw, 249px\" \/>On November 16, 2016, a Texas federal judge permanently blocked the U.S. Department of Labor (\u201cDOL\u201d) from enforcing its persuader rule in <em>National Federation of Independent Business, et al<\/em>.<em> v. Thomas E. Perez, et al<\/em>., Case No. 5:16-CV-066-C.\u00a0 As we previously reported in a <a href=\"https:\/\/employerdefensereport.com\/2016\/03\/24\/dol-releases-long-awaited-persuader-rule\/\">prior post<\/a>, when the DOL published the final rule in March 2016, it imposed substantial reporting obligations on employers.\u00a0 The old rule required disclosure of the use of an outside consultant if the consultant engaged in direct persuader activity, such as if the consultant directly communicates with employees about union representation.\u00a0 The new rule, however, added reporting for indirect persuader activities; for example, providing communication materials to an employer to hand out to employees.\u00a0 These types of activities typically, but not exclusively, arise in the context of a union organizing drive.<\/p>\n<p>The DOL\u2019s insistence on imposing stricter reporting requirements on employers stems from what the DOL perceived as a loophole in the Labor Management Reporting <!--more-->and Disclosure Act of 1959 (&#8220;LMRDA&#8221;).\u00a0 The LMRDA requires labor organizations, consultants, and employers to file reports and disclose expenditures on labor-management activities.\u00a0 The law was designed primarily to prevent abuse, corruption, and improper practices by labor organizations, employers, and labor relations consultants.\u00a0 It requires two types of reporting: (1) labor organizations have to report a wide array of financial information, including information about how much they spend on organizing campaigns; and (2) employers, who hire labor relations consultants to directly persuade employees one way or another on organizing and bargaining issues, must disclose these relationships, including the amount of money spent on these activities.<\/p>\n<p>However, Section 203(c) of the LMRDA does not require employers to report when they hire a consultant simply for advice, which is commonly referred to as the advice exemption.\u00a0 In the past, \u201cadvice\u201d was interpreted as including \u201cindirect\u201d persuasion, relieving employers from reporting guidance they received from consultants regarding what to say to employees.<\/p>\n<p>As a result, the new rule was quickly challenged by several plaintiffs in the U.S. District Court for the Northern District of Texas shortly after the rule was published. \u00a0The plaintiffs claimed that the DOL\u2019s regulation violated the First and Fifth amendments, the Administrative Procedure Act, the LMRDA and the Regulatory Flexibility Act.\u00a0 In late June 2016, U.S. District Judge Sam R. Cummings issued a 90 page opinion entering\u00a0a preliminary <em>nationwide<\/em> injunction barring DOL enforcement of the persuader rule. \u00a0Based on the same reasons stated in his opinion granting the\u00a0preliminary injunction, on November 16, 2016, \u00a0Judge Cummings granted summary judgment to Texas, nine other states, and several business groups that sought to invalidate the rule, and converted the preliminary injunction he issued in June into a permanent nationwide injunction blocking the rule\u2019s implementation.<\/p>\n<p>He ruled that the DOL exceeded its authority in passing the rule, which requires labor relations consultants, including attorneys, to file disclosure reports specifying the nature of \u201cpersuader activities\u201d undertaken with employers, because it is inconsistent with the LMRDA.\u00a0Specifically,the DOL interpreted Sections 203(c) of the LMRDA, commonly referred to as the \u201cAdvice Exemption,\u201d to exclude attorneys and other consultants from having to report their assistance to employers regarding union organizing campaigns, so long as the attorney had no direct contact with employees and the employer was free to accept or reject any of the recommendations. But under the rule change, private and confidential communications between attorney and client would no longer be exempt, and attorneys and consultants would have to report such communications.<\/p>\n<p>In ruling that the DOL\u2019s drastic change of interpretation of the LMRDA was arbitrary, capricious, and an\u00a0abuse of discretion, Judge Cummings highlighted that the rule undermined the attorney-client relationship and unreasonably conflicted with state rules governing the practice of law.\u00a0 Moreover, Judge Cummings held that the new advice-exemption interpretation violates First Amendment rights to free speech and association and the Fifth Amendment right to due process. \u00a0Specifically, the judge ruled that the DOL\u2019s interpretation imposed a content-based burden on speech about union organizing that did not survive strict scrutiny\u00a0and was overly broad.\u00a0 Judge Cummings also found that the rule is unconstitutionally vague in violation of the Fifth Amendment&#8217;s due process clause because its prohibitions were not clearly defined, and employers, consultants, and attorneys could not determine with reasonable certainty when their action would require reporting.<\/p>\n<p>Now, armed with a permanent injunction from a federal judge, employers can take comfort in their engagement and discussion with labor consultants and attorneys regarding union organizing.\u00a0 Essentially, the ruling maintained the status quo, and employer discussions with consultants and attorneys will not trigger additional LMRDA reporting requirements.<\/p>\n<p>The DOL did appeal the court\u2019s June 27, 2016 preliminary injunction order to the U.S. Court of Appeals for the Fifth Circuit.\u00a0 However, the good news for employers is that the case will not likely make it before the Fifth Circuit prior to the Trump Administration taking control.\u00a0 The odds that the Trump Administration will back this pro-union rule are quite slim.\u00a0 The DOL and the Department of Justice may take action over the next two months to attempt to salvage the regulation through a reversal of Judge Cummings&#8217; ruling or otherwise.\u00a0 However, the Trump Administration could put an end to the rule on its first day in office by instructing the Department of Justice to no longer defend the rule, and let the district court\u2019s ruling stand.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On November 16, 2016, a Texas federal judge permanently blocked the U.S. Department of Labor (\u201cDOL\u201d) from enforcing its persuader rule in National Federation of Independent Business, et al. v. Thomas E. Perez, et al., Case No.&hellip;<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[818],"tags":[909,910],"class_list":["post-1558","post","type-post","status-publish","format-standard","hentry","category-regulatory-government-oversight","tag-agency-investigations-audits","tag-labor-union-activity"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Texas Judge Blocks DOL Persuader Rule with Nationwide Permanent Injunction - Employer Defense Report<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.connmaciel.com\/employer-defense-report\/texas-judge-blocks-dol-persuader-rule-with-nationwide-permanent-injunction\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Texas Judge Blocks DOL Persuader Rule with Nationwide Permanent Injunction - Employer Defense Report\" \/>\n<meta property=\"og:description\" content=\"On November 16, 2016, a Texas federal judge permanently blocked the U.S. Department of Labor (\u201cDOL\u201d) from enforcing its persuader rule in National Federation of Independent Business, et al. v. 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