When we last reported on the status of the U.S. Department of Labor’s controversial “Persuader Rule,” it was to inform you that on June 27, 2016, a federal district court in Texas had issued a preliminary injunction that temporarily blocked the DOL’s new interpretation of the rule from taking effect. We are pleased to report that yesterday that same court converted the preliminary injunction into a permanent order blocking the new rule’s implementation. The Texas District Court’s order is national in scope.
U.S. District Judge Sam R. Cummings granted summary judgment to Texas and nine other states, as well as various business groups that sought to invalidate the DOL’s new interpretation of the rule which would have required employers to notify the agency when they hire consultants, including attorneys, in response to union organizing efforts. When Judge Cummings issued the preliminary injunction in June 2016, his order stated that the DOL’s new interpretation of the rule was improper because the DOL did not have the statutory authority to enforce its new interpretation and because its interpretation was “arbitrary, capricious, and an abuse of discretion.” Additionally, the interpretation unconstitutionally curbed and chilled employers’ and attorneys’ free speech and association rights as protected by the First Amendment.
In ordering that the preliminary injunction granted on June 27, 2016, become permanent, Judge Cummings evidenced that he was unpersuaded by the DOL’s arguments that the preliminary injunction should be lifted. The DOL can appeal the permanent injunction to the United States Court of Appeals for the Fifth Circuit. However, even if the DOL does file an appeal, it is unlikely that the Court of Appeals would issue a decision prior to President-Elect Trump taking office, after which time the appeal could be withdrawn. It appears that employers and their legal counsel dodged a bullet on this one.