Update on DOL Persuader Rule

By Stacey Mark
June 28, 2016

Many of our clients have been contacted by law firms seeking to enter into agreements designed to avoid the effect of the Department of Labor’s Final Persuader Rule, which was scheduled to go into effect on July 1, 2016. The Final Rule interprets the Labor-Management Reporting and Disclosure Act of 1959, which requires disclosure of consultant activities undertaken with an object, “directly or indirectly,” to persuade employees with regard to their right to choose union representation or engage in collective bargaining. Employers and consultants previously were not required to file a report covering services that qualified only as “advice.” The DOL’s Final Rule significantly expands the scope of labor services that must be reported and narrows the exception for legal advice. However, the DOL said it would not apply the Final Rule to arrangements or agreements entered into prior to July 1, 2016.

On June 27, 2016, the U.S. District Court for the Northern District of Texas issued a nationwide preliminary injunction against the Persuader Rule. If that injunction is lifted or reversed, there could be an extension of time for employers to get an agreement in place, but employers cannot count on that happening. Therefore, it may be prudent to sign an agreement prior to July 1 to avoid the uncertainties surrounding the application of the Final Rule.

The employment lawyers at Ater Wynne LLP are available to answer questions about the Persuader Rule.