Justice Prevails for Small Business

Date: July 19, 2016

Related Content: Issues Legal Supreme Court Texas

As if the multitude of heavy-handed regulations by Congress against small business owners weren’t enough, the U.S. Department of Labor (DOL) has made every effort to attack the economic engines of this country and trounce the U.S. Constitution.
Of note, most recently, was the DOL’s attempt to block small business owners’ rights to free speech by finalizing the “Persuader Rule” which would give unions more knowledge of discussions between employers and legal counsel in regard to combating union organizing campaigns. This rule, along with the NLRB’s ambush election rule, which cuts time in half for employers to speak with employees upon being petitioned for unionization, was yet another nail in the coffin for employers — the core purpose driven by organized labor and carried out by the DOL.

Always ready to fight for small business, NFIB brought the DOL to U.S. District Court as the lead plaintiff, asking for preliminary injunction against the rule, which was to go into effect on July 1.

On its face, the requirements of disclosure by attorneys representing employers in labor cases would violate attorney-client privacy privileges and employers’ rights to communicate with their employees regarding unionization. The information attorneys would have to disclose under this new rule regarding clients’ financial contracts and private discussions would violate their state code of ethics, putting them at serious risk of being disbarred. Because of that, many attorneys would stop practicing labor law.

Effectively, employers would no longer be able to find legal counsel on union matters — a win-win for the DOL and unions.

The DOL thought they could pull a fast one over on small business by filing a rule instead of going through the legislative process, but because of NFIB and state intervenors like Texas, justice prevailed. U.S. District Judge Sam Cummings granted NFIB’s motion last month.

Judge Cummings said the rule exceeds DOL’s authority and is “arbitrary and capricious” and violates free speech and association rights protected by the First Amendment. The Court granted a nationwide injunction of the rule, meaning that this rule will not be implemented until it is fully vetted and its constitutionality questioned by a higher court.
NFIB was present in the courtroom throughout and provided testimony. As the NFIB/Texas legislative director, I represented small businesses in Texas who may not have the time or means to speak for themselves in matters like this, but who have entrusted this organization to speak for them in a court of law and in the halls of the Capitol. It was an emotional day in federal court with a successful outcome for small business.

Related Content: Issues | Legal | Supreme Court | Texas

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