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Department of Labor Persuader Rule enjoined on a nationwide basis

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Yesterday (June 27), the U.S. District Court for the Northern District of Texas, in a case filed by the National Federation of Independent Business and other groups, granted a nationwide preliminary injunction, stopping the July 1 implementation of the U.S. Department of Labor's "Persuader Rule." This is a first step in protecting the attorney-client privilege and the First Amendment rights of employers everywhere.

Organized labor has been doing everything it can to squelch the First Amendment rights of employers during union organizing campaigns. The first prong of that attack was the "Quickie Election" Rule, which became effective in April 2015. The idea under that rule was to compress the amount of time employers would have to communicate about unionization before an election. Under the Quickie Election Rule, elections can be held as quickly as 11 days after the filing of a petition.

The union's second prong of attack was to get the Secretary of Labor to pass the Persuader Rule. It was announced on March 24, and was to become effective on July 1. The U.S. District Court for the Northern District of Texas granted the nationwide injunction for the following reasons:

  • The American Bar Association expressed opposition to the Persuader Rule, which would require disclosure of confidential client information, such as the existence of the client-lawyer relationship; the identity of the client; the nature of the legal representation; and a description of the legal tasks performed, including indirect persuasion services. It would also require employers to report how much money was paid to their attorneys.
  • The Persuader Rule exceeds the DOL's authority by effectively eliminating the "advice exemption" that has existed for years under the law.
  • The advice exemption had, traditionally, exempted attorneys who gave legal advice, so long as the attorneys did not have direct contact with non-supervisory employees; the new Persuader Rule would have scooped up attorneys who have indirect contact by giving persuasive advice to employers to communicate to employees.
  • Under the new rule, anything a lawyer prepares to help an employer fight unions – such as writing speeches, training supervisors, planning meetings and developing written materials – could trigger a reporting requirement under the new rule, even though it involves giving legal advice.
  • The Persuader Rule violates the First Amendment rights of free speech and free association of employers.
  • The new rule is impermissibly vague and in violation of the Fifth Amendment right to due process.

The new Persuader Rule that was enjoined only applied to attorney-client agreements entered into on and after July 1. Thus, any agreement entered into between an attorney and a client before July 1 would not trigger reporting of indirect persuasive activity under the rule. Even though the rule has been enjoined, it would be prudent to enter into these agreements before July 1. We are a long way from a final decision in this case.

Editor's Note: The Zinser Law Firm, P.C. has entered into such written agreements with its clients, dated prior to July 1.

(NFIB et al. v. Perez, Hayes, and U.S. Department of Labor)

L. Michael Zinser is the founding partner of The Zinser Law Firm in Nashville, Tenn. The firm, which has a heavy concentration of clients in communications media, represents management in the area of labor and employment. Zinser can be reached at (615) 244-9700 or mzinser@zinserlaw.com.

Zinser, Persuader Rule
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