Texas Court Grants Nationwide Injunction Against DOL's New Persuader Rule

Volume 15, Issue 14
June 30, 2016

As we have discussed in recent posts, KZA joined with other law firms affiliated with Worklaw® Network to file a lawsuit in federal court in Minnesota seeking to stop the U.S. Department of Labor (DOL) from enforcing its new "persuader rule."  In addition to the Minnesota lawsuit, there are two other lawsuits presently challenging the lawfulness of the persuader rule. One of these lawsuits, filed by the National Federal of Independent Business and other trade organizations, and joined by numerous states, is pending in federal court in the Northern District of Texas.

Last week, the court in Worklaw® Network's Minnesota lawsuit ruled that while we are likely to succeed in proving that the DOL's new persuader rule is unlawful, an injunction was not appropriate. On June 27, 2016, the Texas court granted a nationwide preliminary injunction against the DOL. This order forces the DOL to refrain from implementing "any and all aspects" of the persuader rule until a further order of the court.

Like the court in the Worklaw® Network lawsuit, the Texas court concluded that the plaintiffs are likely to succeed in proving their claim that the DOL's new persuader rule is unlawful. The Texas court went further, however, and also found that without an injunction, the plaintiffs would suffer irreparable harm. The court found that the DOL's "New Rule will deter employers from seeking counsel and exercising their free speech rights" and deter attorneys "from advising employers where that advice might under DOL's New Rule be deemed to trigger reporting." Specifically, the trade association members and other employers would suffer reduced "access to full, complete and un-conflicted legal advice and representation relating to unionization campaigns," "training, seminars, information, and other advice relating to unionization campaigns," and the "[b]urdening and chilling of First Amendment rights, including the right to express opinions on union organizing and to hire and consult with attorneys."

The Texas court's nationwide injunction provides much needed relief from the July 1 effective date of the persuader rule for employers, their counsel, and their consultants. While the lawsuits are far from over, it is a great preliminary victory.

If you have questions about this ruling, please contact a KZA attorney.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.