UPDATE ON NEW PERSUADER ACTIVITY REPORTING REQUIREMENTS

Federal Court implements temporary nationwide injunction blocking Department of Labor’s new Persuader Rule

Employers should still consider entering in a specific agreement with their legal counsel for labor relations before July 1, 2016

We previously noted here that the Department of Labor’s (DOL) new “Persuader Rule” was set to substantially expand the reporting obligations of employers and their attorneys and consultants beginning on July 1, 2016. We also noted that employers could potentially avoid the application of this new rule by entering into a specific agreement with their counsel for labor relations before July 1, 2016, given the DOL’s indication that the new rule would not apply to persuader activities performed pursuant to agreements entered into before that date.

Shortly before the July 1 implementation date, on June 27, the U.S. District Court for the Northern District of Texas issued a nationwide injunction temporarily blocking the DOL’s implementation of its new “Persuader Rule.” The court’s 86-page order by Judge Sam Cummings prohibits the DOL from implementing the rule until the case is resolved by the courts. Judge Cummings’ order recognizes the concerns expressed by our firm, and by other labor attorneys and employers across the country, that the rule could infringe upon the attorney-client privilege and attorney-client confidentiality. Judge Cummings also noted: “The chilling of speech protected by the First Amendment is in and of itself an irreparable injury.”

Even though Judge Cummings’ order at least temporarily relieves employers and their consultants of having to comply with the new Persuader Rule’s reporting obligations, employers should still consider entering into a specific agreement with their legal counsel before July 1, 2016.

This would be the conservative course of action even if you do not currently use legal counsel for these services or do not have or anticipate union activity. The court’s order will almost certainly be appealed, and so it is possible that the rule could take effect in the future if the order is overturned on appeal. Moreover, the decision not to apply the new rule to persuader activities performed pursuant to agreements entered into before July 1, 2016, was a DOL policy decision, and there is no guarantee that the DOL will extend the deadline for this approach to agreements entered into before any subsequent implementation date.

If you have any questions or would like more information, please contact Robert Pivonka at Pivonka@ROLFLaw.com or 1-866-495-5608.

Please note that this alert is intended to be informational only, and is not intended to be nor should it be relied upon as legal advice. Rolf Goffman Martin Lang LLP will not be responsible for any actions taken or arrangements structured based upon this alert. The receipt of this alert by an organization that is not a current client of Rolf Goffman Martin Lang LLP does not create an attorney-client relationship between the recipient and the law firm.