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DOL's 'Persuader' Rule Permanently Blocked By Texas Court

November 17, 2016

As we explained in our March 24, 2016 alert, on March 23, 2016, the Department of Labor (“DOL”) finalized its “persuader” rule, which would have required that employers and legal consultants report all pay arrangements regarding attempts to persuade employees, either directly or indirectly, about their right to union representation or to bargain collectively. 

The rule significantly narrowed the “advice exception” to the DOL reporting requirements, which had long held that activity relating to an attorney’s drafting of letters, speeches or other communications to employees or an attorney’s legal review of employer communications was exempt from reporting. Under the new rule, any actions, conduct, or communications on behalf of an employer that could directly or indirectly persuade workers concerning their rights to organize and bargaining collectively would have been required to be reported by employers and the attorneys providing the advice.

On June 27, 2016, a federal district court judge in Texas issued a nationwide injunction preventing the DOL from enforcing the rule. The Judge found that the persuader rule was invalid on a number of grounds.  Specifically, the judge found that:

On Nov. 16, 2016, the court issued an order holding that the persuader rule was unlawful and should be set aside and converting its preliminary injunction into a permanent injunction with nationwide effect.

At this point, an appeal of the June injunction is pending in the 5th Circuit Court of Appeals. We will continue to update you with any important developments.