An injunction blocking the U.S. Department of Labor’s (DOL) new “persuader” rule is drawing praise from employer interests concerned that the new rule would stifle their efforts to respond to union organizing campaigns.
The rule change was scheduled to take effect July 1, but a preliminary injunction issued June 27 prohibits enforcement pending final resolution of a lawsuit challenging the rule’s constitutionality. Senior U.S. District Judge Sam R. Cummings of the U.S. District Court for the Northern District of Texas issued the injunction after hearing arguments during a June 20 hearing. The scope of the injunction is nationwide.
Charles H. Kaplan, an attorney with Sills Cummis & Gross P.C. in New York City, said the U.S. Supreme Court likely will decide if the new persuader rule remains permanently blocked. He explained that the DOL can seek a stay of the preliminary injunction from the U.S. 5th Circuit Court of Appeals, and if it can’t obtain a stay in the 5th Circuit, it can seek a stay from the U.S. Supreme Court.
When the new rule was announced, employers were vocal in their opposition. Kaplan said the rule’s opponents claim that it isn’t authorized by the Labor Management Reporting and Disclosure Act (LMRDA), and it contravenes the plain language of that law’s advice exemption. “In other words, the DOL improperly tried to use the new persuader rule to change a law that only Congress can amend,” he said.
“Also, as the court found, the new persuader rule contains reporting requirements that are inconsistent with and undermine the attorney-client relationship and the confidentiality of that relationship,” Kaplan said, adding that it also interferes with the right of free speech.
The National Federation of Independent Business (NFIB) led a coalition of opponents to the rule in filing the lawsuit. The Texas Association of Business, the Texas Association of Builders, and the chamber of commerce in Lubbock, Texas, joined the NFIB in seeking the injunction blocking the rule.
After the injunction was announced, the Lubbock chamber issued a statement calling it “an enormous victory for the constitutional rights of job creators in Lubbock and across the nation.”
The NFIB also is praising the injunction. “When facing union organization, small business owners are in need of legal advice,” NFIB Small Business Legal Center Executive Director Karen Harned said. “Labor law is extremely complex, and without legal consultation, small business owners will not know what rights they have and what they can and cannot discuss with their employees. The rule’s constitutionality needs to be decided before small business owners are held liable for potentially ruinous penalties.”
The groups challenging the rule claim it violates the First Amendment to the U.S. Constitution. They also say it violates the Due Process Clause of the Fourteenth Amendment and the Regulatory Flexibility Act.
“This is just another attempt by the Obama administration to tilt the scales in favor of unionization,” Harned said. “We believe the DOL has overstepped its executive authority and hope that the courts will eventually strike down this new rule.”
Tougher reporting requirements
The DOL’s new persuader rule increases reporting requirements on employers trying to persuade employees not to unionize. Steven R. Semler, an attorney with Fortney & Scott, LLC, in Washington, D.C., wrote on the new rule in the April edition of Federal Employment Law Insider and explained that its provisions require employers and their attorneys and consultants to disclose all agreements and payments to attorneys and consultants for providing advice, counter-organizational campaign training, and assistance on maintaining nonunion status.
Under the old rule, such attorney and consultant assistance was exempt from reporting under the legal advice exception of the LMRDA. In his article, Semler explained that the new rule would require employers and their attorneys and consultants to report activity that has the object or purpose of dissuading employees from unionizing, including:
- Drafting union campaign literature, speeches, audiovisual presentations, or website content;
- Drafting counter-organizational talks or talking points for supervisors who meet with employees in groups or individually;
- Meeting with supervisors or management to oversee or develop counter-organizational strategy;
- Training supervisors in counter-organizational conduct;
- Coordinating or planning counter-organizational campaigns;
- Establishing employer policies to inhibit union activity; and
- Planning personnel actions or discipline to affect union activity.
Semler’s article also explained that although the new rule greatly increases reporting requirements, it still exempts certain activities, such as:
- Explaining the law, but not for the purpose of persuading how to maintain nonunion status;
- Reviewing employer-prepared counter-organizational literature for lawfulness and grammar, but not to revise it for the purpose of achieving or enhancing persuasion against unionization;
- Advising the employer about legal decisions or courses of conduct; and
- Representing the employer in legal proceedings or collective bargaining negotiations.
Also, under the new rule, employers wouldn’t have to report buying “off the shelf” counter-organizational literature not customized for their workplace, and they wouldn’t have to report attending trade association seminars on how to maintain nonunion status.