On June 27, the U.S. District Court for the Northern District of Texas issued a nationwide injunction that will block the U.S. Department of Labor (DOL) from implementing the final persuader rule, officially titled the Interpretation of the ‘Advice’ Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act (LMRDA), which was scheduled to go into effect on July 1.  

As a result of the injunction, the final persuader rule will not go into effect on July 1. It is unknown at this time whether the DOL plans to appeal the district court’s decision.  

To learn more about the impact of the decision, ABC’s general counsel Littler Mendelson, P.C. has prepared an analysis of the Texas District Court’s ruling.  

Background on DOL’s Final Persuader Rule

On March 23, the DOL issued its final persuader rule, which drastically redefines “persuader” activity under Section 203 of the LMRDA. If implemented, the final rule will apply to arrangements, agreements and payments made on or after July 1, 2016. 

The final persuader rule significantly narrows the “advice” exemption and broadens the reporting requirements for employers and advisors (attorneys, consultants and even trade associations). Under the final rule, mere advice to an employer from an advisor will be reportable if an object of the advice is to “indirectly persuade” employees about union organizing or collective bargaining.

Soon after the DOL issued the final rule, three separate court challenges were filed against the new persuader rule, all seeking preliminary injunctive relief prior to July 1, 2016. On June 22, the U.S. District Court for the District of Minnesota ruled that DOL’s final persuader rule violates the LMRDA. ABC National, ABC of Arkansas and a coalition of stakeholders have filed a joint lawsuit challenging the final rule in the U.S. District Court for the Eastern District of Arkansas. The case remains pending.

ABC has opposed the persuader rule since it was first proposed in 2011 and has expressed its concerns through: 

• Comments submitted to DOL in September 2011
• A letter sent to DOL in February 2014
• A December 2015 letter to the Office of Information and Regulatory Affairs (OIRA) from a coalition of business groups including 29 ABC chapters
• A January 13, 2016 meeting with OIRA officials