Texas Court Permanently Strikes Down Persuader Rule
Good news for employers. On November 16, 2016, a Texas federal judge permanently enjoined the Department of Labor's ("DOL") proposed Persuader Rule. The federal court's decision to permanently block the rule ensures that employers and consultants, at least for the foreseeable future, are relieved from complying with the DOL's proposed Rule. In his opinion, the federal judge stated that the Rule "should be held unlawful and set aside" in addition to remarking that the Rule has the effect of destroying the attorney-client privilege and undermining an employer's fundamental right to counsel.
The Rule would have required employers to annually report agreements that have the object of dissuading employees from supporting unions, commonly referred to as persuader activities agreements, and consultants to report both the persuader activities agreements and payments from employers for all "labor relations advice and services." The change would have signaled a dramatic change from the existing, and long-standing, persuader rules.
While the DOL may appeal the federal court's decision, such a decision may not come until a new Secretary of Labor has been appointed under the new Trump administration.
For questions regarding this new development, or the existing persuader rules, contact any member of Varnum's Labor & Employment Practice Team.
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