United States: Texas District Court Issues Nationwide Injunction Blocking The Department Of Labor's Persuader Rule

On June 27, 2016, the District Court for the Northern District of Texas issued a nationwide injunction enjoining the Department of Labor's (DOL) Persuader Rule, 81 Fed. Reg. 15924.1  In reaching this conclusion, the court explained, "the [Persuader Rule] is defective to its core because it entirely eliminates the LMRDA's advice exemption." 

The injunction comes just before July 1, 2016, the date the Persuader Rule had been scheduled to come into effect.  The Texas court's decision is a significant victory for employers and consultants who provide labor and employment law advice and services.  At least for now, the injunction will relieve employers that enter into agreements with third-party advisors who provide labor and employment law advice and services, and the advisors themselves, from incurring reporting obligations under the Labor-Management Reporting and Disclosure Act (LMRDA) as a result of such agreements or arrangements.

The Persuader Rule

As explained in Littler's March 24, 2016 Insight,2 the Persuader Rule imposes upon employers and their advisors (including lawyers and consultants), for the first time, the obligation to file public reports with the DOL disclosing any advice that "indirectly persuades" employees regarding union organizing or collective bargaining.  Prior to the Persuader Rule, such reports were only required when an advisor made direct contact with the employer's employees, regardless of the persuasive purpose of the advice. The published Persuader Rule indicated it would become effective on April 25, 2016, and would apply only to "persuader" arrangements and agreements, as well as to payments (including reimbursed expenses) made on or after July 1, 2016.

Shortly after the Persuader Rule's publication, several associations and other entities filed three lawsuits against the DOL, seeking to enjoin the rule.3 

The Texas District Court's Ruling

The judge presiding over the Texas lawsuit considered the following four factors in deciding whether to enjoin the Persuader Rule: (1) the likelihood of the plaintiffs' success on the merits on the issue of the Rule's unlawfulness; (2) the threat of irreparable harm to the plaintiffs if the injunction is not granted; (3) the balance between that harm and the injury that granting the injunction will inflict on the other parties; and (4) the public interest.

The judge ruled that the plaintiffs established a substantial likelihood of success on their claims attacking the legality of the Persuader Rule. He found six separate grounds on which the Rule could be deemed unlawful. Specifically, the judge determined that the plaintiffs are likely to succeed on the following arguments:

  • The Rule exceeds the DOL's authority under the LMRDA by effectively eliminating the advice exception and is therefore "defective to its core."
  • The Rule is arbitrary, capricious, and constitutes an abuse of discretion.  The court reached this conclusion on the basis that the DOL had reversed its longstanding position of over 50 years without conducting any studies or independent analysis that would support the DOL's reversal of its interpretation of the LMRDA.
  • The Rule's reporting requirements are inconsistent with and undermine the attorney-client privilege and the confidentiality of the attorney-client relationship. 
  • The Rule violates free speech and association rights protected by the First Amendment to the U.S. Constitution.
  • The Rule is void for vagueness and therefore, in violation of the due process clause of the Fifth Amendment to the U.S. Constitution.
  • The Rule violates the Regulatory Flexibility Act.

The judge ruled that the plaintiffs established that the Persuader Rule will cause irreparable harm because, among other things, it reduces employer access to "full, complete, un-conflicted legal advice and representation" and burdens First Amendment rights.  The judge further concluded the DOL will suffer no harm from the "delay[ed] implementation of an invalid rule."4  The judge found that a preliminary injunction serves the public interest because it will ensure that employers "will continue to have access to necessary legal counsel," and an injunction will "protect confidential relationships and protect constitutional rights."  In light of these conclusions, the judge granted the preliminary injunction.

Impact of Decision

Significantly, the injunction spares employers and consultants who provide employment-related advice and services to employers from incurring reporting obligations based on agreements or arrangements to provide "indirect persuader activity."   The injunction further prevents the DOL from enforcing the Persuader Rule anywhere in the United States unless the same district court, the U.S. Court of Appeals for the Fifth Circuit, or the U.S. Supreme Court issues a contrary decision. 

Nevertheless, the court's decision does not necessarily eliminate the possibility that the Persuader Rule will be implemented in the future.  The DOL could ultimately challenge the court's ruling in future proceedings, including at the appellate level.  Given this uncertainty, and until the Persuader Rule litigation is finally resolved, employers that seek advice regarding labor issues should continue to consult with counsel regarding the extent to which such activities could trigger reporting obligations and determine how they wish to proceed in light of the rule.  As previously recommended, employers should consider entering into agreements now with any consultants or attorneys who they anticipate will provide them with labor and employment law advice or services on or after July 1, 2016.5


National Fed'n of Indep. Bus. v. Perez, Case No. 5:16-cv-00066-C (N.D. Tex. June 27, 2016).

2See Michael J. Lotito, Maury Baskin, and Michael G. Pedhirney,  Department of Labor Issues Long-Awaited "Persuader Activity" Final Rule, Littler Insight (Mar. 24, 2016).  On March 24, 2016, the DOL issued the Persuader Rule regarding its interpretation of the LMRDA's "advice" exemption.

3 Littler is representing the plaintiffs in one of the three lawsuits, which is proceeding in Arkansas.  Last week, a Minnesota district court denied the requested preliminary injunction, but nevertheless stated that the Persuader Rule conflicts with the advice exception to the LMRDA.  See  Michael J. Lotito and Michael G. Pedhirney,  Minnesota District Court Denies Request to Enjoin DOL's Persuader Rule, But Signals Rule Could Be Overturned, Littler ASAP (Jun. 23, 2016).  The Arkansas district court has yet to issue its ruling.

4 The court noted that even if the Persuader Rule were upheld on the merits, the DOL would suffer no harm as a result of the injunction because the DOL would merely be required to abide by the same interpretation of the LMRDA that it has utilized for over 50 years.  Moreover, the fact that the DOL waited until five years after it first proposed the rule to finalize it belies the notion that the DOL would suffer any harm as a result of any delayed implementation of the Persuader Rule.

See Michael G. Pedhirney and Michael J. Lotito,  Department of Labor Provides Limited Opportunity to Obtain Advice Without Triggering the New "Persuader Rule", Littler ASAP (Jun. 10, 2016).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Smith Gambrell & Russell LLP
McLane Middleton, Professional Association
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Smith Gambrell & Russell LLP
McLane Middleton, Professional Association
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions