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Hw V0 1w Mz co cQ Ix uW ay oX if wD Ra I2 bF x1 Cz ZK WJ N1 YS H3 Z1 il V2 9n EV rs Bl pU Persuader Activity | HAWAII LABOR & EMPLOYMENT LAW

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Persuader Activity
Permanent Injunction Issued Against DOL’s Persuader Rule

Earlier this year, I reported that a federal judge in Texas had issued a preliminary nationwide injunction against the Department of Labor’s (“DOL”) new Persuader Rule.  The DOL’s new rule was problematic because it would have essentially eliminated what is known as the “advice” exemption under the Labor-Management Reporting and Disclosure Act (“LMRDA”), which allows attorneys and consultants to assist employers with union matters where there is no direct contact between the attorney/consultant and the company’s employees, without having to report the nature of the consultation.  Under the DOL’s new Persuader Rule, disclosure of such arrangements would have been required.

On November 16, 2016, the same judge converted the preliminary injunction into a permanent nationwide injunction.

At this point, we’ll just have to wait and see how the DOL responds (i.e. appeals).  With the Trump administration taking office in less than two months, it will be interesting to see whether the DOL scales back on some of the initiatives it pushed for during the Obama administration.

DOL’s New Persuader Rules Blocked, At Least Temporarily

In case you haven’t heard, a federal court in the Northern District of Texas issued a nationwide injunction enjoining the U.S. Department of Labor from enforcing their new persuader rules, which were supposed to be applied to agreements, arrangement and payments made on or after July 1, 2016.  In a nutshell, the court concluded that the new rules were defective because they basically eliminated what is known as the “advice exemption” under the Labor-Management Reporting and Disclosure Act (“LMRDA”).  The court also noted that the rules exceeded the DOL’s authority to revise statutory law, were arbitrary and capricious, constituted an abuse of discretion, were inconsistent with the attorney-client privilege, violated free speech and the First Amendment right to association, and violated the Regulatory Flexibility Act.


This ruling is major victory for employers, but it is definitely not the end of the story for the new persuader rules.  The DOL will surely be filing an appeal of the court’s order.  You can review a copy of the court’s order here:  Texas Injunction.

In a lawsuit in Minnesota, the court denied a similar motion for preliminary injunction, but also noted that the parties seeking to invalidate the rule “are likely to succeed in their claim that portions of the new rule conflict with the LMRDA.”  Therefore, although the court declined to issue an injunction in the case, it did hint that the rule could eventually be overturned at a later court proceeding.  You can review a copy of the Minnesota court’s order here:  Minnesota Order.

A third lawsuit, in Arkansas, is still pending.

Shots Fired! Several Lawsuits Filed in Response to New Persuader Rule

So it has begun.  As of this morning, several lawsuits have been filed against the U.S. Department of Labor to invalidate the persuader rules mentioned in this post.


Specifically, the National Federal of Independent Business (“NFIB”) and National Association of Home Builders (“NAHB”) have both filed lawsuits arguing that the new rules violates business owners’ right to free speech under the First Amendment and make it nearly impossible to consult with legal counsel when faced with a union organization campaign.

In addition, a consortium of law firms that make up the Worklaw Network have also filed a lawsuit in a Minnesota federal court challenging the new persuader rule.  Their complaint argues that the final rule is contrary to the plain meaning of the “advice” exemption under the Labor Management Reporting and Disclosure Act.  In addition, the lawsuits also argue that the new rules violates several other laws, including free speech rights under the First Amendment, due process rights under the 5th Amendment, and the Regulatory Flexibility Act because the DOL failed to conduct a proper regulatory flexibility analysis.

Finally, the Texas Association of Business, the Texas Association of Builders, and the Lubbock Chamber of Commerce have also filed similar lawsuits in a Texas federal district court.  The lawsuits filed in Texas have also argued that the new rule violates the Due Process Clause of the 14th Amendment and the Regulatory Flexibility Act.

New Persuader Rules Issued!

They’re finally here:  the DOL’s new persuader rules have been published in the Federal Register and – at first glance – they look pretty bad.  The DOL watered down their proposed rules just a lil’ bit, and even provided a small set of different rules to allow trade associations to engage in certain activity without triggering any reporting requirements, but overall the rules will be a game-changer for most employers.

discussionI’m currently going through the rules with a fine tooth comb (the rules are either 129 or 446 pages long, depending on whether you read the version with small print or the one with a larger font and double spacing).  In a nutshell, the new persuader rule will no longer accept the “accept or reject” test for the “advice” exception.  As a result, persuaders and employers will be required to file a report for “indirect” persuader activities, which could include the following:

  • Planning, directing, or coordinating supervisors or managers;
  • Providing persuader materials;
  • Conducting seminars; and
  • Developing or implementing personnel policies or actions.

It appears trade associations are exempt from the reporting requirements if they (1) host a counter-organizing seminar but bring in outside speakers or (2) simply provide “off the shelf” materials to an employer for a union campaign.  To get a firmer grasp on how these new rules will affect organizations like the Hawaii Employers Council (“HEC”), however, I need to read through the rules and examine them in more detail.

For anybody who wants to read up on the rules, you can view the following:

In addition, HEC will be providing a seminar on May 11, 2016 that will provide an overview of the new rules, a discussion of how the new rule will impact employers, instructions on how to fill out the LM-10 form for employers, and a review of some of the legal challenges that have arisen against these new rules.  That seminar will be available to HEC members only, and on a first-come-first-served basis.

Finally, once I have a chance to read through all the rules, I’ll prepare and send out an article summarizing the new rule – which will also be available only to HEC members.

DOL’s Controversial Persuader Rules One Step Closer to Becoming Final

To quote the controversial Marshall Mathers, otherwise known as Eminem:

Guess who’s back, back again?
The DOL’s back, with a friend.
Guess who’s back, guess who’s back,
Guess who’s back, guess who’s back.
Guess who’s back, guess who’s back.
Du nana.

Much to the surprise of many employers, the DOL recently submitted their proposed new rules regarding what constitutes “persuader” activity for the purposes of the Labor Management Reporting and Disclosure Act (“LMRDA”) to the Office of Management and Budget (“OMB”).  This move by the DOL is significant (and alarming) because submission of a proposed rule to the OMB is the final step before the DOL can publish its final rule in the Federal Register.  The DOL currently has a target date of March 2016 for publication of its final rule.  In other words, the new persuader rules could become a reality in just three short months (or even less).

The proposed persuader rules have been rather dormant since 2011, when introduction of the rules sparked major controversy and the American Bar Association strongly opposed the rules because they could potentially violate the sanctity of the attorney-client privilege.  This latest move by the DOL, however, means that the rules could take effect despite the objections of the ABA.

The proposal issued by the DOL would expand the scope of an employer’s reporting requirements under the LMRDA.  Currently, the LMRDA contains an exemption for where an employer receives “advice” from an attorney or consultant, but the attorney or consultant does not have direct contact with any employees.  Under the proposed rule, “persuader activity” would  be expanded to include “material or communications to, or engaging in other actions, conduct, or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively.  Reporting is thus required in any case in which the agreement or arrangement, in whole or in part, calls for the consultant to engage in persuader activities, regardless of whether or not advice is also given.”   This broad definition of “persuader activity” would severely narrow the “advice” exemption as we currently know it.  For instance, the DOL has provided the following examples of what would constitute persuader activity:

  • Drafting, revising, or providing a persuader speech, written material , website content; audiovisual or multimedia presentation, or other material or communication of any sort to an employer for presentation, dissemination, or distribution to employees, directly or indirectly;
  • Planning or conducting individual or group meetings designed to persuade employees;
  • Developing or administering employee attitude surveys concerning union awareness, sympathy, or proneness;
  • Training supervisors or employer representatives to conduct individual or group meetings designed to persuade employees;
  • Coordinating or directing the activities of supervisors or employer representatives to engage in the persuasion of employees;
  • Establishing or facilitating employee committees;
  • Deciding which employees to target for persuader activity or disciplinary action;
  • Coordinating the timing and sequencing or persuader tactics and strategies.

The DOL also stated that reportable agreements or arrangements include those in which a consultant plans or orchestrates a campaign or program to avoid or counter a union organizing efforts, such as through the specific activities listed above.  Additionally, such efforts could also include drafting or implementing policies for an employer that has the effect of directly or indirectly persuading employees.

Any employer who enters into an agreement with an outside party – such as an attorney or consultant – to provide “persuader activity” would be required to file Form LM-10 with the DOL.  Failure to comply with the LMRDA’s reporting requirements could technically result in a $10,000 fine and imprisonment for up to one year.