NLBMDA News: The perils of the Persuader Rule

A federal district court in Texas has issued a permanent injunction blocking the Obama administration's pro-union "persuader rule."

The rule required law firms to publicly disclose work they do for employers surrounding union organization efforts. This permanent injunction followed a temporary injunction issued by the same court in June 27 where the court agreed that the Obama administration's Labor Department exceeded its authority by eliminating the statutory exemption for legal advice placed in the underlying law by Congress. The Obama administration had appealed the temporary injunction, but the court concluded that the rule was unlawful and should be set aside. The challenge, brought by the National Federation of Independent Businesses, and supported by many other groups, argued that the rule violated the duty to protect client confidentiality and the attorney-client privilege.

The Labor Dept. "persuader rule" was one of a number of new rules and regulations favorable to labor unions, making it easier and faster to conduct union elections and eroding the line between employers and contractors, both of which NLBDMA has opposed.

NLBMDA President & CEO, Jonathan Paine welcomed the permanent injunction and said, "We are hopeful that with this injunction a new Department of Labor may reevaluate the rule given the clear concerns of the court and also the many businesses that initially expressed concern with the rule at the time of its proposal."

NLBMDA through its membership with the Coalition for a Democratic Workplace has been working with Congress throughout this year to block implementation of the rule. The court effectively agreed with comments filed by NLBMDA that employers need to be able to engage legal expertise that far exceeds the basic "persuader" function that the rule claimed to be addressing.

Employment law is very complicated and businesses with the best intentions of responding to union organizing efforts what to avoid violating the law while at the same time engaging their workforce in a thoughtful dialogue. Paine echoed what many have noted, "The employer will rightly vet anything said to employees in the context of a union election with lawyers to avoid violating labor law or surrendering important rights that the law intends for the employer to retain."

Frank Moore is regulatory counsel for the NLBMDA.