Federal Court Permanently Blocks Persuader Rule

In welcome news to employers, a federal district judge in Texas earlier this week permanently blocked the Department of Labor’s (“DOL”) persuader rule. The court’s order makes permanent its June decision temporarily blocking the rule.  The temporary order is on appeal to the Fifth Circuit Court of Appeals.  Nonetheless, the court decided that the persuader rule “should be held unlawful and set aside…and the Court’s preliminary injunction preventing the implementation of that Rule should be converted into a permanent injunction with nationwide effect.”  To explain its decision, the court incorporated its June order, which, in part, found that DOL did not have the authority to issue the rule.

The persuader rule, which took effect April 25, 2016, radically alters the interpretation of the Labor-Management Reporting and Disclosure Act (“LMRDA”). These prior posts contain more information about the rule.

Given the DOL’s appeal of the temporary order issued in June, an appeal of the permanent order is sure to come. The Court of Appeals could overturn the district court’s decision.  And there are at least two other lawsuits challenging the rule that could result in a conflict in the courts.

The more practical question, however, is what President-elect Trump’s administration may do. The appeal is still in the briefing process and thus it is unlikely that we will have a decision from the court of appeals prior to the inauguration of the new administration.  Notifying the court that the DOL is withdrawing its appeal, thus allowing the permanent injunction to stand, would be a relatively simple way for the DOL to provide immediate relief from the rule.

*Originally posted on the Vorys on Labor blog.

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