Breaking>>> Persuader Rule Enjoined by Texas Court

  • June 27, 2016

injunctedFrom ABC and Lubbock:

The Lubbock Chamber of Commerce was celebrating “an enormous victory for the constitutional rights of job creators in Lubbock and across the nation” after a Lubbock federal judge issued a preliminary injunction to block the United States Department of Labor (DOL) from enforcing changes to the DOL Persuader Rule.

Senior United States District Judge Sam R. Cummings issued the injunction Monday after a hearing last week for a lawsuit challenging the labor department rule.

“We thank our legal counsel on this case, Lubbock attorney Fernando Bustos of Bustos Law Firm, PC, who is representing the Lubbock Chamber, NFIB, TAB, NAHB, and Texas Builders in the joint effort,” Beth Bridges, Lubbock chamber chairwoman, said in a statement from the chamber. “We are also grateful to the Ogletree Deakins and Kemp Smith law firms who have done such an effective job representing us and the job creators we serve.”

More here from Hal Coxson at Ogletree Deakins which handled the arguments in the Texas case:

On June 27, 2016, in National Federation of Independent Business et al. v. Perez, et al., the U.S. District Court of the Northern District of Texas (Lubbock Division) granted Plaintiffs’ Motion for a Preliminary Injunction, thereby enjoining the U.S. Department of Labor (DOL) from implementing and enforcing its revised persuader rule on a national basis. The Court found that Plaintiffs’ challenge to the new rule, which was set to become effective July 1, 2016, has a substantial likelihood of success on the merits and that Plaintiffs have shown that they would be irreparably harmed if the rule was not enjoined.

This lawsuit was filed on March 31, 2016, by Plaintiffs the National Federation of Independent Business, the Lubbock Chamber of Commerce, the Texas Association of Business, the National Association of Home Builders, and the Texas Association of Builders.  Ogletree Deakins represents the Plaintiffs in this case.  The State of Texas along with nine other states intervened in support of Plaintiffs’ position.

DOL’s new rule significantly revised and expanded the reporting and disclosure requirements imposed on employers and advisors (including consultants and lawyers) under the Labor-Management Reporting and Disclosure Act (LMRDA). If implemented, DOL’s new rule would require employers and consultants to report and disclose direct or indirect communications that have an object to persuade employees with regard to union organizing—including what was formerly considered exempt “advice” provided to management by consultants, including lawyers.

Plaintiffs contend that the DOL’s new rule violates the LMRDA, the First and Fifth Amendments to the U.S. Constitution, and the Regulatory Flexibility Act.

Since the DOL promulgated its new rule, three separate legal challenges have been filed in federal district courts in Little Rock, Arkansas, Minneapolis, Minnesota, and Lubbock, Texas. The U.S. District Court for the District of Minnesota issued a decision in Labnet, Inc. v. U.S. Department of Labor on June 22, 2016, holding that while plaintiffs there had a substantial likelihood of success on the merits of their claim, their motion for a preliminary injunction was denied because, according to the Court, Plaintiffs had failed to make a sufficient showing of irreparable harm.