Federal Court Blocks Burdensome Labor Rule

Date: November 17, 2016

Judge Bars Labor Department From Enforcing Its Union “Persuader Rule”

Businesses saw a victory against the Obama Administration’s burdensome labor regulations this week. The Hill reports that a federal court judge in Texas on Wednesday “issued an order to block the Labor Department from enforcing its union ‘persuader rule.’” Judge Sam Cummings granted a motion for summary judgment “that turns the temporary stay he ordered in June into a permanent injunction.” In a two-page order, the judge said the rule “should be held unlawful and set aside.” Business groups, including the NFIB, sued over the rule, “arguing that it violated employers’ First Amendment rights to free speech and will prevent employers from seeking legal counsel.” Responding to Wednesday’s ruling, NFIB Small Business Legal Center Executive Director Karen Harned said, “Small business owners today are relieved that they will still have the right to seek legal advice when facing a union election. Labor law is extremely complicated, and small business owners rely on the advice of experts to help them navigate through unfamiliar territory.”

What Happens Next

The Wall Street Journal reports that for now, the judge’s order means that the Labor Department rule, issued in March, cannot be enforced. Labor attorneys speculate that it is unlikely the Labor Department will appeal this ruling, because the courts under the new Trump Administration would be unlikely to issue a favorable ruling to the Labor Department on appeal. In all likelihood, this Labor Department attempt to overregulate the workplace is dead.

What This Means For Small Businesses

The ruling in this case means small business owners have seen a positive rollback of the Obama Administration’s labor regulations. Whether other burdensome labor regulations implemented during the Obama Administration will similarly be rejected in courts remains to be seen.

Additional Reading

Roll Call, Reuters, and Forbes also report on this case.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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