In April, we explained the Persuader Rule and how it impacted employers. To refresh your memory, this Rule required employers and labor relations consultants, including employers, advisers and lawyers, to report agreements where a consultant would participate in activities with a direct or indirect intent to persuade workers about their rights to collectively bargain. The Persuader Rule was the requirement to report even indirect activities of the consultant. This rule, which applies to arrangements, agreements and payments made on or after July 1, 2016, has come under review by a federal judge in Texas.
Judicial Review of the Persuader Rule
While agencies have the power to create rules like the Persuader Rule, the rules are subject to judicial review by the courts to determine whether they are constitutional, go beyond the agency’s legal authority, were made without following the required processes, were arbitrary, capricious or an abuse of discretion. If a court sets aside a rule, it will often send the rule back to the agency that created it. The agency may have to justify its processes or decisions or restart the rulemaking process from the beginning.
Fortunately for employers, a federal judge in Texas issued an order in November that held the Persuader Rule was unlawful and unenforceable. As such, the judge granted a permanent injunction and motion for summary judgment to the party which challenged the rule. The National Federation of Independent Businesses and other trade groups argued the Persuader Rule violated the Labor-Management Reporting and Disclosure Act, the Regulatory Flexibility Act, the Administrative Procedure Act and the First and Fifth Amendments. It was a full courtroom for the proceedings as Texas and nine other states intervened in the case.
Some employer groups have pushed back against the rule, arguing it violates their confidentiality and prevents them from even seeking advice about their rights and responsibilities when employees try to collectively bargain. Even though the courts could send the Persuader Rule back to the Department of Labor for a review, because the Rule is a product of the Obama administration, it’s likely that the Trump administration will allow the Rule to fizzle out and not be enforced.
Navigate Collective Bargaining with an Experienced Attorney
Employers and labor relations consultants are federally required to complete specific forms for certain activities regarding employees’ collective bargaining rights and the source of information given to employees (here, LM-10 and LM-20). It’s crucial that employers and consultants complete the proper forms with accurate and relevant information. Contact one of our labor lawyers who is intimately familiar with the current federal forms and requirements and is committed to advocating for employers and businesses in South Carolina.