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DOL Persuader Rule Permanently Blocked By Texas Judge

A federal judge in Texas has issued a permanent injunction holding that the Obama administration’s so-called “Persuader Rule” is unlawful and unenforceable.  In an order issued Wednesday, U.S. District Judge Sam Cummings of the Northern District of Texas granted the permanent injunction and a motion for summary judgment by plaintiffs challenging the rule. The lawsuit was brought in March by the National Federation of Independent Businesses and other business trade groups alleging the Persuader Rule violated the First and Fifth amendments, the Administrative Procedure Act, the Labor-Management Reporting and Disclosure Act (LMRDA) and the Regulatory Flexibility Act.  Texas and nine other states later intervened in the case. The Persuader Rule, if implemented, would require reports from employers and their advisors, including lawyers, about the types of services they offered and amount of fees charged. The requirements would be added to duties already imposed under the federal Labor Management Reporting and Disclosure Act.

The Persuader Rule was halted by a preliminary injunction in June, which is currently on appeal to the 5th Circuit.  In the November 16 order, Judge Cummings rejected the government’s motion to set aside a preliminary injunction from an earlier ruling, holding that, “The court is of the opinion that the Department of Labor’s persuader advice exemption rule … should be held unlawful and set aside.” The ruling further noted that, “The court’s preliminary injunction preventing the implementation of the rule should be converted into a permanent injunction with nationwide effect.”

If the Fifth Circuit has not ruled on the interlocutory appeal prior to January 2017, it is likely that the Trump administration will withdraw the appeal of the preliminary injunction ruling and allow Judge Cummings’ permanent injunction to stand, thus invalidating the rule.

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Allison Goico, Employment discrimination, attorney, dinsmore shohl, law firm
Partner

Allison's practice focuses on litigation and counseling with an emphasis on management-side (both private and public employers) employment discrimination, wage and hour, non-competes, and leave laws. She regularly appears before both state and federal courts as well as administrative agencies and has experience with arbitrations under collective bargaining agreements. Allison defends employers against charges filed with the EEOC and state and local fair employment agencies, and has experience defending cases brought by the EEOC as a litigant. In addition, she regularly...

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Elizabeth Callan, Dinsmore Shohl, State Discrimination Statutes, Lawyer, Attorney
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Libby Simmons is a member of the firm’s Labor and Employment Department and an acknowledged leader in the legal community. Having started her career as an assistant prosecuting attorney, Libby now concentrates on management side employment litigation in her practice. She also has deep experience in business counseling, working with clients on issues and claims brought under the ADA, Title VII and state discrimination statutes. While she enjoys working with all types of business, Libby has particular insight into the issues facing the hospitality industry. Outside of her practice, Libby is involved with organizations that focus on the welfare of youth in Cincinnati, such as Lighthouse Youth Services and the YWCA.

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Amir Nahavandi, Dinsmore Law Firm, Labor and Employment Attorney
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Amir is a member of our Employment, Labor and Benefits Department focusing his practice on employment and traditional labor law matters. His clients range in size from small, privately held business to large, public corporations.

His passion for helping clients is evident by his commitment to and interaction with them. He works closely with in-house counsel, HR managers and various company executives strategizing and keeping them informed at every stage of his counsel. Amir has obtained a number of summary judgments and dismissals on behalf of those he represents...

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