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Obama Administration’s “Persuader Rule” is On Hold

A new Obama Administration rule aimed at giving unions more knowledge of discussions between employers and legal counsel is on hold after a federal judge in Texas blocked it nationwide pending the outcome of litigation.

The so-called “persuader rule” has long been sought by organized labor and, not surprisingly, has long been opposed by various businesses and businesses groups. What exactly would the rule do? The Wall Street Journal's Law Blog explains it this way:

Examples of attorney services that would have to be reported would include: conducting union-avoidance seminars, providing materials to distribute to and persuade workers, and drafting personnel policies dealing with union issues.

The Labor Department says it’s trying to address what it says is a lack of transparency when employers engage third-party consultants to help craft anti-union messages to workers. “Workers often do not know when employers engage consultants behind the scenes to influence their decisions,” the agency said.

The government estimates that between 71% and 87% of employers hire consultants — sometimes known as “persuaders” — to help shape management’s message to employees.

In issuing a nationwide injunction, Lubbock Judge Sam Cummings said the Department of Labor is probably overstepping its authority under the Labor Management Reporting and Disclosure Act with the rule that he called “arbitrary and capricious.”

“The chilling of speech protected by the First Amendment is in and of itself an irreparable injury,” Cummings wrote in a nearly 90 page order.

Calling the injunction an “enormous victory for the constitutional rights of job creators,” Lubbock Chamber of Commerce Chairwoman Beth Bridges said, “The new regulations are being challenged on constitutional grounds in Lubbock federal court by the Lubbock Chamber of Commerce in a coalition led by the National Federation of Independent Business (NFIB) and joined by the Texas Association of Business, National Association of Home Builders and Texas Association of Builders.”

The Department of Labor declined to comment on the injunction but will, of course, continue to fight the litigation.

A judge in Minnesota heard a similar challenge to the new rule but did not issue an injunction. Legal experts say the different outcomes suggest the issue could very easily make its way to the United States Supreme Court.