U.S. judge blocks union ‘persuader’ rule pending lawsuit

By Daniel Wiessner

(Reuters) – A U.S. judge on Monday temporarily blocked a new Obama administration rule requiring employers to report when they seek assistance from consultants and lawyers in countering union campaigns, saying it is contrary to federal law.

U.S. District Judge Sam Cummings in Lubbock, Texas, agreed with the National Federation of Independent Business and other groups that the Department of Labor’s so-called “persuader rule” impermissibly did away with a provision of federal law that exempts employers from disclosing when they merely receive advice on responding to union organizing.

Cummings enjoined the rule, which took effect April 25, pending the outcome of a lawsuit filed in his court by business groups, including the National Federation of Independent Business.

“The new rule is defective to its core because it entirely eliminates the… advice exemption,” Cummings wrote.

The Department of Labor did not immediately return a request for comment.

Jeffrey Londa, a lawyer for the NFIB and other plaintiffs in the case, said he was pleased with the decision. The rule “constitutes a blatant overreach by the administration designed to assist unions,” he said.

The rule amended regulations under the federal Labor Management Reporting and Disclosure Act to require reports from employers and their advisers, including the types of services rendered and any fees paid.

Previously, employers were required to file those reports only when their lawyers or consultants interacted directly with workers, which the Labor Department said has become increasingly rare over the last few decades.

The agency in a memo accompanying the rule said that workers would be better prepared to make decisions about unionizing if they knew who was behind their employers’ arguments. The rule is backed by major unions, including the Service Employees International Union and the AFL-CIO.

The NFIB’s lawsuit says the rule goes against federal law and violates employers’ free speech rights.

In May, Cummings allowed Texas and nine other states to join the lawsuit after they claimed the persuader rule infringed on their authority to regulate the legal profession, since it applies to labor lawyers who regularly offer advice on responding to union efforts.

Cummings’ decision comes after a judge in Minnesota last week ruled that the persuader rule was “likely invalid” but refused to temporarily block it, saying a group of lawyers who represent employers did not show that it would cause them irreparable harm.

The National Association of Manufacturers and other business groups in March filed a separate legal challenge to the rule in federal court in Arkansas.

The case is National Federation of Independent Business v. Perez, U.S. District Court for the Northern District of Texas, No. 16-cv-66.

(Reporting by Daniel Wiessner; Editing by Dan Grebler)