Three Lawsuits Filed in Response to DOL’s New “Persuader Rule”

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On March 23, 2016, the U.S. Department of Labor (DOL) issued the final version of its “Persuader Rule,” which requires employers, third-party lawyers and other labor consultants to disclose to the DOL any arrangement to persuade employees directly or indirectly concerning the right to organize or bargain collectively. These reports must be filed electronically and, once filed, become publicly available records. As expected, however, lawsuits in three different jurisdictions have been filed challenging the Rule.

The first lawsuit came exactly one week after publication of the Rule. Filed on March 30, 2016 in the Eastern District of Arkansas by the National Association of Manufacturers, the Arkansas Chamber of Commerce, the Coalition for a Democratic Workplace, and a law firm, it challenges the Rule on several grounds, including: the Rule “infringes on the right of those who seek to give labor relations advice to employers, including the Plaintiff associations, attorneys, and other third party consultants…to render such advice without fear of criminal penalties for failing to file the reports newly required by the Rule”; violates the plaintiffs’ First Amendment rights of Freedom of Speech and Freedom of Association; and infringes on the confidentiality of the plaintiffs’ attorney-client communications and impermissibly invades the attorney-client relationship.

The second lawsuit, filed in Minnesota by a group of eleven law firms who are all members of an association of independent law firms, was filed a day later on March 31, asserts that the Rule “is an impermissible viewpoint-based regulation of speech as it “singles out for regulation communications that are ‘anti-union’.”

The third challenge to the Persuader Rule has been made by the National Association of Home Builders and the National Federation of Independent Business and is pending in the Northern District of Texas. These groups claim that the Rule is “without statutory authority, is in direct conflict with specific existing statutory provisions, and usurps, without legal authority, the right of States to regulate the attorney-client relationship. It will either require practicing attorneys to either violate DOL’s new federal ‘interpretation’ of federal law or state ethics rules on disclosure of attorney-client information. DOL’s new rule illegally interferes with the right of Plaintiff’s employer-members to obtain confidential legal advice and impedes their right to communicate with employees about unions and workplace issues.”

All three lawsuits seek to enjoin the Rule until a final decision is made on the merits and an order vacating the challenged Rule. We will keep on top of this ongoing situation and report any decisions made by these courts.

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Posted In: Legal