DOL Persuader Rules Fail to Persuade

Authored by Robert S. Seigel

Nov 22, 2016

Employers have been handed a rare reprieve from the Obama administration’s draconian attempts to encourage union organizing. On Nov. 16, a federal judge issued a ruling permanently blocking the federal Department of Labor (DOL) from implementing its so-called “persuader rule.” As a consequence, employers will not be required to report fees paid to attorneys for indirectly assisting in union avoidance campaigns or other forms of labor relations advice that were not previously subjected to reporting requirements.

The persuader rules had been the topic of our earlier blogs and alerts cautioning clients that at the effective date of the new rules, they would be forced to publicly disclose information concerning attorney’s fees paid for union avoidance activities. We presumed this information would then be utilized by unions in organizing campaigns to highlight the degree to which employers were willing to pay lawyers to fight union organizing efforts. We strongly recommended employers be proactive by signing new engagement letters authorizing such union avoidance work in advance of the rules’ effective date, as a means to escape the adverse consequences of the rule.

In its Nov. 16 ruling, the federal judge blocked implementation of the rule on several grounds. He found the rule violated the Labor-Management Reporting and Disclosure Act (the very law the rule was intended to promote); violated the constitutional rights of free speech and association; and violated due process because the rules were unconstitutionally vague and ambiguous. Given the impending change in administrations in Washington, we can predict with some confidence that the persuader rules are effectively dead.

Although the potential adverse consequences of the persuader rules have been obviated, employers must not become sanguine. Unions continue to organize and the attorneys at Lowenbaum Law continue to be available any time to assist you in proactively reducing the risk that your company will be a target for union organizing.

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