Earlier in the year, we reported on a temporary injunction issued by a federal district court Judge in Texas. The injunction prevented the Department of Labor from enforcing the so-called “persuader rule.” The rule sought to require all employers, consultants, and lawyers to disclose and report labor relations services, including fee arrangements and a description of the services provided to employers by attorneys and consultants.
After issuance of the temporary injunction, the federal government filed a motion to seeking to set aside the Judge’s order in an effort to clear the way for enforcement of the rule. The National Federation of Independent Business, which sought the temporary injunction on behalf of employers, filed its own motion to make the injunction permanent.
On November 16, 2016, the Court denied the government’s motion and granted the National Federation of Independent Business’s, permanently prohibiting the federal government from enforcing the persuader rule. This is a big win for employers everywhere as they will not face consequences for failing to disclose the labor relations advice given by their consultants and attorneys.
The government has appealed, but the Fifth Circuit is not expected to consider the case before the end of President Obama’s term in January. It is expected that President-elect Trump’s administration will either reverse the persuader rule outright or allow it to die by withdrawing the appeal. We will continue to monitor the issue and report any further developments here.