Persuader Rule Permanently Enjoined

Management side labor lawyers and consultants and their clients are breathing a sigh of relief after a Texas federal court entered a nationwide permanent injunction that bars enforcement of the Labor Department's so-called "Persuader Rule." As we had reported back in June, the same federal District Judge had entered a preliminary injunction against enforcement of the Persuader Rule. The Persuader Rule, first proposed in 2011, amended the federal Labor Management Reporting and Disclosure Act (LMRDA) to require detailed reports from employers and their advisers, including the types of consulting or legal services rendered and any fees paid. Under the DOL's prior interpretation of section 203 of the LMRDA, an employer and consultant would be required to file a report of persuader activities only if the consultant communicated directly to the workers.

In a lengthy decision granting the preliminary injunction, the Judge made it clear he was convinced the DOL Persuader Rule violated the Labor-Management Reporting and Disclosure Act and the First and Fifth amendments to the Constitution.

Business groups consider this ruling a major victory. The Department of Labor can file an appeal, but as a practical matter, the new Persuader Rule is likely to be repealed or amended by the Trump administration.