United States: Here We Go Again! DOL Proposes To Rescind The Permanently Enjoined "Persuader" Rule (And Perhaps Revise It)

The U.S. Department of Labor (DOL) moved one step closer to undoing President Obama's permanently enjoined "persuader activity" regulation when, on June 12, the agency issued a notice of proposed rulemaking (NPRM) for reverse rulemaking to rescind the rule and perhaps revise it. According to the NPRM, the DOL will be accepting public comments on the rule until August 11, 2017.

The DOL's rule would have 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, the DOL's new rule would have required 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.

The so-called "persuader" rule, which would have required employers to disclose who advises them on how to discourage union organizing activity, was already set aside last November when a Texas federal judge ruled that, among other grounds, it exceeded the DOL's authority and compromised free speech and attorney-client privilege. Employers and other interested parties should use this opportunity to provide comments to the DOL on the effects of the persuader rule on their organizations.

What is "Persuader Activity"?

Ever since the 1947 Taft-Hartley Act amendments, employees in the United States have had protected rights to engage in or refrain from union activity or other forms of concerted action. Unions have consistently sought to undermine, in Congress, employees' rights to refrain from union activity and have labeled employers who inform employees of their rights to refrain from union membership, "union busters."

Attacks against employer communications have occurred despite the fact that section 8(c) of the Taft-Hartley Act amendments (the so-called "free speech" proviso) shields employers from unfair labor practice charges for communications and views or opinions expressed about unions with their employees provided that the communication "contains no threat of reprisal or force or promise of benefit." While supporting section 8(c) legal "free speech" protections, the ever-changing decisions of the NLRB have created a mine field of interpretations as to what constitutes unlawful "threat[s] of reprisal[s] or force or promise of benefit[s]."

The Advice Exemption

In the 1950s, some employers engaged in the practice of secretly hiring "persuaders" to pose as employees and deceptively communicate with fellow employees to convince them to vote against the union. These were not employees—they were consultants secretly paid by the employer as its agents to "persuade" employees and report back to the employer. That activity truly was "union busting." With the 1959 Landrum-Griffin Act amendments (the LMRDA), Congress sought to eradicate this corrupt practice by requiring public disclosure of "persuaders." Congress was careful, however, to exclude mere "advice" to employers from the reporting obligations: Thus, the so-called "advice exemption."

Over the ensuing 50 years, this exemption has been interpreted to mean that only "persuaders" must report when they communicate directly with employees. Today, employers and their consultants and legal advisors understand that they must publicly report only when the outside persuader has direct communications with employees. Employees are not deceived, and advice to employers is excluded from the law's reporting obligations.

Unions that blame employers and their law firms for the continuing decline in union density, seek to expand the scope of reportable law firm advice and services to include virtually every type of protected confidential communication typically provided exclusively to employer-clients during union organizing. The persuader rule would have prevented most law firms from providing legal advice related to union organizing other than the standard DOs and DON'Ts. Discussion of lawful communications strategies beyond that would not have been possible because to provide such advice would force law firms to breach attorney-client confidences for all of its clients, even if the client involved waived the privilege.

That is part of the problem with the persuader rule: By breaching the attorney-client privilege and requiring public reporting for one client, the law firm would be required to breach the attorney-client confidences of all clients.

The Persuader Rule Enjoined

On March 31, 2016, the National Federation of Independent Business (NFIB), the Lubbock Chamber of Commerce, the Texas Association of Business, the National Association of Home Builders (NAHB), and the Texas Association of Builders filed a lawsuit challenging the persuader rule. Ogletree Deakins represented the plaintiffs in this case. The State of Texas along with nine other states intervened in support of the plaintiffs' position.

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

On November 16, 2016, the court converted its injunction preventing implementation of DOL's revised persuader rule on a national basis from preliminary to permanent. According to Judge Sam R. Cummings's order, the court converted the preliminary injunction to a permanent one for the same reasons "stated in  the court's Preliminary Injunction Order entered June 27, 2016." Judge Cummings found the DOL's revised persuader rule to be "not merely fuzzy around the edges. Rather the New Rule is defective to its core." And in his final judgment entered on December 16, 2016, Judge Cummings ruled that the persuader rule "is held unlawful and set aside."

On August 25, 2016—during President Obama's last term—the DOL appealed the decision to the Fifth Circuit Court of Appeals. After giving the agency a number of extensions, the Fifth Circuit gave the DOL until June 16 to file a brief in its appeal. The DOL then moved for an abeyance of the appeal—which the plaintiffs opposed—while the agency decided whether to rescind the rule. The Fifth Circuit held the case in abeyance pending the DOL's rulemaking process (or until December 12, 2017). On June 12, 2017, the DOL issued the new NPRM to rescind the enjoined rule. The public now has 60 days from the date the DOL published its NPRM to comment on whether the government should rescind the persuader rule.

What's Next?

Jeffrey C. Londa and Christopher C. Murray of Ogletree Deakins represent the successful plaintiffs—the NFIB, the NAHB, and their respective state chapters in Texas, the Texas Association of Business, the Texas Builders Association, and the Lubbock Chamber of Commerce. Unions can be expected to flood the rulemaking record with comments defending the rule and challenging the injunction during the course of the comment period. Even if the reverse rulemaking ultimately results in a rescission of the persuader rule, unions can be expected to challenge the reverse rulemaking in a court of their choosing. Remember, legal authority demands that it's not a sufficient basis for reverse rulemaking simply to provide that "we changed our minds" or that a new administration has a "different point of view"; the rulemaking must be supported by "reasoned analysis." It will be incumbent on the business community to provide that analysis through public comments filed with the rulemaking record.

What's worrisome is the NPRM alluded to the need to rescind the Obama rule in order to consider a new Trump rule in the future. "If it's not broke, don't fix it!"

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.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.