November 27, 2022

Volume XII, Number 331

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DOL Persuader Regulations Suffer Fatal Blows

Issuance of a nationwide, permanent injunction and the election of Donald Trump put an end to DOL’s controversial persuader regulations.

The US District Court for the Northern District of Texas last week issued a nationwide, permanent injunction that prevents the US Department of Labor (DOL) from implementing its so-called “persuader” regulations. The decision made permanent a preliminary injunction issued on June 27, 2016 that blocked DOL’s original July 1, 2016 implementation date for the new regulations.

DOL issued the persuader regulations on March 23, 2016 and sought to broaden the scope of circumstances under which employers, law firms, and consultants could trigger reporting requirements under the Labor-Management Reporting and Disclosure Act (LMRDA). Specifically, reporting would have been triggered in connection with a wide array of activity where an object was to directly or indirectly persuade employees in their rights to organize and bargain collectively. The regulations would have had significant implications for all employers, however, not just those involved in union organizing, collective bargaining, or other union-related activity.

In issuing the permanent injunction, Judge Sam Cummings reaffirmed his original legal conclusions from June, namely that DOL’s rule conflicted with the LMRDA’s exemption of “advice” given to employers from the reporting requirements. Judge Cummings also pointed to the intrusion on the attorney-client relationship and to conflicts with the First Amendment’s free speech and the Fifth Amendment’s due process rights under the US Constitution.

Although DOL has the right to appeal Judge Cummings’s decision, the election of Donald Trump to the presidency makes such an appeal very unlikely. The Trump administration is widely anticipated to reverse or not enforce the persuader rules.

Significantly, these developments moot the serious concerns that caused some US law firms, including Morgan Lewis, to cease providing so-called “indirect” persuader services that under the new persuader regulations could have required reporting by clients of law firm retentions and expenditures for legal advice. Longstanding DOL interpretative guidance and court decisions that define the bounds of reportable persuader activity under the LMRDA, in effect since the early 1960s, will continue to govern.

Copyright © 2022 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume VI, Number 328
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About this Author

Harry I. Johnson III, Morgan Lewis, labor and employment attorney
Partner

Harry I. Johnson, III serves clients as a management-side defense lawyer, with more than 20 years of experience in traditional labor matters before the National Labor Relations Board (NLRB) and federal courts. Harry practices across the entire traditional union/labor field, including in NLRB unfair labor practice and representation proceedings, union representation campaigns, union corporate campaigns, labor arbitrations, collective bargaining, labor-management relations, labor-related advice for mergers and acquisitions, and federal and state labor injunction cases,...

310.255.9005
Joseph Ragaglia, Morgan Lewis, labor and employment lawyer
Partner

Joseph C. Ragaglia partners with many of the largest national and multinational corporations, serving as the primary counsel in the development of strategic business and legal solutions to complex labor and employment issues. As the leader of the firm’s US labor/management relations practice, Joe provides employers with strategic representation related to high risk union organizing campaigns, corporate campaigns, contract negotiation and administration (collective bargaining and arbitration), and matters before the US National Labor Relations Board (NLRB). He also...

215.963.5365
Daniel Bordani, labor attorney, Morgan Lewis
Partner

Daniel P. Bordoni counsels clients on labor law issues, focusing his practice on collective bargaining and matters arising under the National Labor Relations Act (NLRA). He represents clients in administrative proceedings before the National Labor Relations Board (NLRB), labor arbitration proceedings, and collective bargaining negotiations. Clients from a range of industries, including defense, manufacturing, and trucking, turn to Dan for guidance on a wide variety of labor law and labor relations issues.

202.739.5249
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