By: Thomas W. Mackenzie

Yesterday (November 16, 2016), the U.S. District Court for the Northern District of Texas issued a permanent injunction barring enforcement of the U.S. Department of Labor’s “Persuader Advice Exemption Rule.”  As we have reported in previous E-Alerts, this rule would have required employers and their attorneys to report expenditures incurred in resisting union organizing efforts.  Historically, reporting was only required when a law firm engaged in active persuader activity such as giving a speech to the employer’s employees in a union organizing drive.  Under the new rules, an attorney would be required to report if he or she engaged in speech writing, letter drafting or supervisor training. The rule was unquestionably designed to discourage law firms from representing employers in union organizing campaigns.

In arguing that the law was unlawful, the plaintiffs claimed, in part, that the reporting requirements invaded the attorney-client privilege.  The Texas judge issued a preliminary injunction on June 27, 2016.  The injunction was made permanent by the decision issued yesterday.  The decision will unquestionably be appealed.  However, it is unlikely that a decision at the appellate level will be issued before President Elect Trump takes office and a new Secretary of Labor is appointed.

The new requirement was challenged in multiple court cases by business groups and, in a case currently pending in Minnesota, by the Worklaw Network, an association of management-side labor and employment law firms of which Lindner & Marsack is the Wisconsin representative.

Although it is impossible these days to predict anything with certainty, the so-called “Persuader Rule” would appear to be in critical condition and unlikely to be enforced in the foreseeable future, if ever.

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