The US Department of Labor Rescinds its Controversial 'Persuader Rule'

In March 2016, the US Department of Labor issued its “Persuader Rule,” reversing a decades-old interpretation of the Labor Management Reporting and Disclosure Act (LMRDA): Under the old interpretation, personal interactions with employees done by employer consultants (including attorneys) trigger reporting obligations.

But, advice between consultants (including attorneys) and employers – such as scripting what managers and supervisors say to employees – do not.  Under the Persuader rule, even advice and scripting would trigger reporting obligations.

Not surprisingly, unions and their supporters hailed the Rule. But, employers and other stakeholders, including the American Bar Association, condemned it.

The Rule, however, never went into effect. First, in November 2016, the US District Court for the Northern District of Texas issued a permanent, nationwide injunction barring the Department from implementing the Rule. Then, this week, the Department formally rescinded the Rule, finding that it:

  • Rested on a misinterpretation of the LMRDA;
  • Interfered with longstanding protections accorded to attorney-client relationships;
  • Imposed costly regulatory burdens; and
  • Diverted Departmental resources from other critical initiatives, such as helping Americans find jobs, closing the skills gap, protecting employees from hazardous working conditions, and enforcing child labor projections. 

Takeaways

The Department’s decision to rescind the Persuader Rule is an important victory for employer and their attorneys and consultants. It spares them the added costs that the Rule would have imposed. It helps to level the union-organizing playing field, that unions and their supporters have endeavored to tilt in their favor. Plus, by rescinding the Rule, according to a DOL spokesperson, “the Department stands up for the rights of Americans to ask a question of their attorney without mandated disclosures to the government.”

Contacts

Continue Reading