District Court in Texas issues nation-wide injunction on persuader activity rule from DOL

June 27, 2016Articles
On June 27, 2016, the United States District Court for the Northern District of Texas issued a nation-wide injunction prohibiting the enforcement or application of the recently enacted persuader activity interpretative rule from the United States Department of Labor (DOL). In an 86-page opinion, United States District Court Judge Sam Cummings granted the relief to the National Federation of Independent Business, along with other trade associations representing employers. The court found that it has jurisdiction to enter an injunction against the defendants on a nation-wide basis and that the plaintiffs and intervenor-plaintiffs in the litigation had shown that the nation-wide injunction is appropriate “because the scope of the irreparable injury is national, and because the DOL’s new rule is facially invalid, the injunction should be nation-wide in scope.”

The persuader activity rule was set to become active on July 1, 2016. The rule would have required employers, attorneys and consultants who agreed or arranged to conduct indirect persuader activity report that relationship to the DOL, disclose the fees and disbursements paid for those services and all labor relations advice. The rule dramatically expands the interpretive rule maintained by the Agency for more than 50 years.

Dinsmore & Shohl LLP will be analyzing the Court’s decision in detail and will update its clients regarding the impact and implications of the decision in the near future. If you have questions, please contact your Dinsmore attorney.