National Association of Manufacturers Files Suit to Block DOL’s “Persuader Rule”

By Michael Cork, Esq.

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Recently, we blogged about the U.S. Department of Labor’s (DOL) “Persuader Rule,” noting that under the proposed rule, companies are required to report the names of private law firms and consultants who advise them regarding union matters. Conversely, those attorneys and consultants are required to name all other clients they advise about union issues and the corresponding fees those clients paid. The full article is posted on this site.

We noted the probable effect of the new rule is that it will prevent most management-side attorneys from representing clients facing union-organizing efforts. The American Bar Association has already noted its opposition to the proposed rule on the basis that it will “seriously undermine” the confidential nature of the attorney-client relationship and employer’s right to counsel. The Rule is one-sided—unions and union attorneys and consultants are not required to report and disclose similar information.

Opposition to the rule is widespread and intense. On Wednesday, March 30, 2016, the National Association of Manufacturers, an Arkansas labor and employment law firm, Cross Gunter Witherspoon & Galchus PC, and five other industry groups filed a seven-count complaint in the United States District Court for the Eastern District of Arkansas.  The complaint names as defendants the Secretary of Labor, the Director of the Office of Labor-Management Standards, and the U.S. Department of Labor, and seeks to have the controversial “Persuader Rule” declared enjoined.

The DOL attempted to “fast-track” the rule by promulgating it on March 24, 2016, with an effective date of April 25, 2016. For a rule of this magnitude, that time period is alarming.

The complaint alleges that the Rule exceeds DOL’s statutory authority, is arbitrary and capricious, violates Plaintiffs’ and their members’ First Amendment rights of Freedom of Speech and Freedom of Association, violates the Fifth Amendment’s Due Process Clause due to vagueness, violates the National Labor Relations Act by infringing on the ability of employers to obtain advice, infringes attorney-client confidentiality, and violates regulatory impact laws and orders. Plaintiffs seek preliminary and permanent injunctive relief.  We will keep you informed.

This lawsuit is the latest salvo in a long-running battle between businesses and the Obama administration over labor policy.

This article is intended for educational purposes only. By reading it, you understand there is no attorney-client relationship created between you and Michael Cork.  It is not a substitute for legal advice from a licensed professional attorney in your state or jurisdiction.  Please seek advice from an attorney before taking any legal action.

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