Judge Blocks Labor Department’s “Persuader” Rule

Date: June 28, 2016

Temporary Injunction Prevents Rule From Taking Effect Pending Business Groups’ Suits

Reuters reports U.S. District Judge Sam Cummings in Lubbock, Texas issued an injunction that temporarily blocks the Labor Department’s “persuader” rule, which requires employers to disclose their hiring of consultants and lawyers for help in responding to workers’ union-organizing campaigns. Cummings agreed with the business groups, including NFIB, that have sued in multiple courts to prevent the rule’s implementation, saying the provision violates part of a federal statute that exempts companies from having to reveal “when they merely receive advice on responding to union organizing,” Reuters says. “The new rule is defective to its core because it entirely eliminates the…advice exemption,” wrote Cummings, whose injunction will apply pending the outcome of the business groups’ lawsuit in his court. The Hill, explaining that Cummings’ 86-page order bars the Labor Department from implementing the rule anywhere in the US, quotes the judge as writing, “The chilling of speech protected by the First Amendment is in and of itself an irreparable injury.” Business plaintiffs argued that the rule prevents employers “from speaking on labor issues or seeking legal counsel,” The Hill says.

What This Means For Small Businesses

NFIB was among the business groups seeking this injunction, because the “persuader” rule would have a detrimental effect on small businesses. As the Chicago Business Journal reports, NFIB Small Business Legal Center Executive Director Karen Harned said of the injunction, “The rule’s constitutionality needs to be decided before small business owners are held liable for potentially ruinous penalties.” Harned explained that “when facing union organization, small business owners are in need of legal advice. Labor law is extremely complex and without legal consultation, small business owners will not know what rights they have, and what they can and cannot discuss with their employees.”

Additional Reading

The Washington Examiner and the Arkansas Democrat Gazette also report on the injunction.

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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