Earlier this year, we reported that a federal court in Texas issued a temporary nationwide injunction that prohibited the Department of Labor ("DOL") from enforcing its new persuader rule.  In that injunctive order, the court stated that the DOL's new persuader rule was "defective to its core."  

 

On November 16, 2016, the same court issued a permanent nationwide injunction that prevents implementation of the DOL's new persuader rule.  In issuing the injunction, the court referred back to its prior order which noted that the new rule would irreparably harm the attorney-client relationship because it destroys the confidentiality of any communications made between a client and lawyer.  (As background, the new persuader rule would have required certain disclosures to be made for "indirect persuader activity" that was conducted by attorneys and employer associations.)  Specifically, the court had found that the new persuader rule would likely violate the plain language of the Labor-Management Reporting and Disclosure Act ("LMRDA"), which expressly protects "advice" from disclosure.

 

In addition, the court's prior order had also concluded that the new persuader rule was arbitrary, capricious and an abuse of discretion because it conflicted with state ethics rules regarding the practice of law.  Finally, the court found that the new rule violated employers' right to free speech by subjecting the "advice" exception under the LMRDA to a vague test that carried the possibility of criminal penalties.