Labor Law -- 2018

Associated Builders & Contractors v. Perez   (E.D. Ark.)

DOL Persuader Rule chills employer and employee communications

In 2016, the NAM led a coalition of associations in challenging the Department of Labor's (DOL) Persuader Rule in federal court in Arkansas. Our complaint argued that the rule violates manufacturers’ First Amendment rights of free speech and association. We argued the new rule is also void for vagueness and prohibited by the Fifth Amendment's due process clause.

The rule requires employers, third-party lawyers and other labor consultants to disclose their relationships more frequently than under the 50-year-old "bright line" standard. Under that standard employers and their consultants filed reports only when consultants communicated directly with workers. Under the new rule, employers must file reports if consultants are providing guidance to employers without contacting employees directly. Guidance includes conducting union-avoidance seminars or providing materials to distribute to and persuade workers. The government’s expansion of what constitutes “advice” vastly broadens the persuader definition and restricts manufacturers’ ability to communicate with their workforce. Further, the rule expands possible criminal liability related to disclosure and will result in employers not seeking out important counsel for guidance on employer and employee related questions.

The NAM also filed a reply brief in support of a preliminary injunction. Our brief argued that, contrary to DOL’s opposition, plaintiffs are likely to succeed on the merits of their claims that the new rule is unlawful. Further, our brief argued that we established irreparable harm, that the DOL failed to show maintaining the fifty-year status quo will harm the agency and that the public interest would be furthered by granting injunctive relief. Meanwhile, on November 16, 2016, a judge in the Northern District of Texas entered an order for a permanent nationwide injunction against the rule.

After that decision, we filed a motion to stay the proceedings in the Arkansas court, which the judge granted the next day.

The DOL proposed to rescind the persuader rule in June, 2017. In July 2018, the DOL officially rescinded the rule.

Related Documents:
NAM Motion to Stay Brief  (December 12, 2016)
NAM Summary Judgment Brief  (August 19, 2016)
NAM Memorandum  (April 2, 2016)
NAM Motion  (April 1, 2016)
NAM Complaint  (March 30, 2016)


© 2019 National Association of Manufacturers