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

DOL Persuader Rule Chills Employer and Employee Communications

On March 30th the NAM led a coalition of associations in challenging the DOL's Persuader Rule filing our complaint in the U.S. District Court for the Eastern District of Arkansas. Our complaint argues that the rule violates manufacturers’ members’ First Amendment rights of Freedom of Speech and Freedom of Association. The new Rule is also void for vagueness and is, therefore, prohibited by the Fifth Amendment's due process clause. In effect, the rule greatly restricts manufacturers’ ability to educate and inform their workforce.

The rule, first proposed by the Labor Department in 2011, requires employers and 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 had communicated directly with workers. But under the new rule, employers must file reports even if the consultants are giving certain guidance to the employer without contacting employees directly, such as conducting union-avoidance seminars or providing materials to distribute to and persuade workers. The government’s expansion of what constitutes “advice” vastly expanded the persuader definition and in effect, 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 to guide them on employer and employee related questions.

On May 5, 2016, the NAM filed a reply brief in support of preliminary injunction in our challenge of the DOL’s Persuader Rule. 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 indeed be furthered by granting injunctive relief. On June 27, 2016, the Northern District of Texas court issued preliminary injunction nationwide, and on July 8, 2016, this court ordered summary judgment briefs. On November 16, 2016, the Northern District of Texas judge granted a motion for summary judgment and entered an order for a permanent injunction with nationwide application.

After that decision from the Texas court, on December 12, 2016, we filed a motion to stay the proceedings in the Arkansas court, which the judge granted the next day.

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)


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