Minnesota Court Rules in Persuader Lawsuit, Finds “Strong Likelihood” of Success on the Merits, But Rule Remains Effective July 1
The U.S. District Court for the District of Minnesota today ruled in Labnet Inc. d/b/a Worklaw Network, et al v. United States Department of Labor, et al, that the plaintiffs have a strong likelihood of success on the merits of their lawsuit challenging the DOL’s new “persuader” rule, but refused to stay or enjoin the rule. Therefore, for now, the rule will go into effect on July 1. However, based on the judge’s comments, there is reason for optimism that the rule ultimately will be found invalid. There are two other lawsuits challenging the rule pending, in Arkansas and Texas, where rulings have not been issued.
The new rule requires employers as well as consultants/attorneys to report to the DOL all arrangements in which an “object” (directly or indirectly) is to persuade employees in the exercise of their “rights to organize and bargain collectively through representatives of their own choosing” under federal labor law. The rule significantly broadens labor services that are reportable, and greatly narrows the legal “advice” exception.