DOL Begins Process to Rescind Persuader Rule

The Department of Labor on May 23 sent to the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) a new proposed rulemaking rescinding the Obama Administration’s persuader rule.

OIRA will review the proposed rule and once approved, DOL will publish the proposal in the Federal Register and open it up to public comment. The Coalition for a Democratic Workforce, of which NATSO is a member, will file comments on the proposed rule supporting the Department’s decision.

The persuader rule altered the advice exemption under the Labor Management Reporting and Disclosure Act, effectively interfering with both employers’ access to legal advice on labor matters and attorney-client privilege.

Under previous law, if an employer hired an outside consultant, including an attorney, to persuade employees with respect to their rights under the National Labor Relations Act (NLRA), both the employer and the consultant were required to file extensive reports with DOL under the Labor Management Reporting and Disclosure Act and related regulations.

There is an exemption to the reporting requirement for advice, however, under which reports are not required if the consultant or attorney does not communicate directly with employees. This allowed employers to seek routine legal and other advice without triggering the reporting requirements. DOL’s rule greatly narrowed this advice exemption. With respect to employers, the net effect of the changes was to discourage them - particularly smaller employers - from seeking legal representation or other experts in the course of a union campaign.

In November 2016, the U.S. District Court for the Northern District of Texas permanently enjoined the final rule. Two other lawsuits had been filed against the rule - one in Minnesota and the other in Arkansas. CDW was a plaintiff in the Arkansas lawsuit. Rather than appeal the Texas court's decision, DOL has decided to rescind the rule in its entirety.