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Much to the relief of management-side lawyers, the Department of Labor’s controversial persuader rule that was slated to go into effect on July 1, 2016 has been enjoined.  The Hon. Sam R. Cummings, United States Senior District Judge for the Northern District of Texas issued a nationwide injunction of the rule a few hours ago.

The decision in National Federation of Independent Business, et als. v. Perez temporarily stops a mad scramble by employers and counsel to put measures into place before the July 1st deadline.

The rule, had it not been enjoined, greatly expanded the number of people who could be considered “persuaders” under the Labor Management and Reporting Disclosure Act (“LMRDA”) and who were thus required to make certain reporting obligations.  Prior to the latest rule, counsel for employers were exempt from reporting requirements where they did not directly communicate with employees and were providing advice to employers with regard to union campaigns.

The latest rule chipped away at that exemption and provided that some activities of counsel, even though not communicated directly to employees, would have to be reported by lawyers.  These activities might include providing advice on the drafting of campaign materials and, in some cases, questions regarding lawful employment policies even in the absence of a union campaign.  The rule could be interpreted so broadly as to apply in non-union settings where employers sought routine counseling advice.

If counsel acted as a persuader, then the employer and the counsel had to make a report as to all of the payments made to the counsel for all activities provided by counsel to that employer.  The rule also then required counsel to file additional reports for all clients for whom the counsel had done work, regardless of whether it engaged in any persuader activity on behalf of those clients.  Not only was the reporting intruding on the attorney-client relationship, the DOL noted that in order to determine if certain advice was exempt from the reporting requirements, it would be necessary to actually view the communication between the employer and counsel.

The Court found that the rule was vague and intruded on employers’ First Amendment rights.  Although this is a significant victory for employers and their counsel, it may be temporary.  The decision will likely be appealed.

We will keep you posted.  In the meantime, if you have not already spoken to labor counsel about the potential implications of the rule, we recommend that you do so.