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Persuader Rule is Rescinded

On March 30, 2016, Cross, Gunter, Witherspoon & Galchus, P.C., joined by  a number of trade associations, as well as the State Chamber, filed the first lawsuit against the Department of Labor (DOL) to prevent enforcement of the unprecedented “Persuader Rule” regulations that sought to punish employers, their lawyers, and their consultants with criminal penalties, including up to one year of prison time, and fines up to $10,000.00, for failure to disclose confidential and attorney-client privileged information. Effectively, the Rule would have limited the rights of employers to consult with its counsel on union-related issues. This was one of three legal actions taken against the implementation of the Rule around the country, the other two being filed in Texas and Minnesota. 

 The Texas court issued a nationwide injunction against the Rule’s implementation just before a decision was to be entered in our case. Subsequently, the DOL requested a stay of these three legal proceedings so that the new Administration could evaluate the rulemaking process and consider comments from the public with respect to its June 12, 2017 Notice of Proposed Rulemaking. On August 10, 2017, this Firm—again joined by our partners at ABC of Arkansas, the State Chamber/Associated Industries of Arkansas, and the Arkansas Hospitality Association—submitted a twenty-six-page comment arguing in favor of full rescission of the Persuader Rule regulations.

 We are happy to report that the DOL has now issued a final rule to rescind the 2016 Persuader Rule regulations, officially named the “Interpretation of the 'Advice' Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act,” in part due to our litigation and comments. Indeed, although the DOL received 1,162 comments during the process, of the few it cited, one was from our coalition’s comments in support of its rescission, to wit: “One commenter reported, for example, ‘DOL’s new Rule creates a regulatory scheme that is so confusing and convoluted, with so many illogical exceptions and mandates, that neither employers nor their advisors, including labor law experts, can understand how to comply with it.’ [Associated Builders and Contractors of Arkansas LMSO-2017-0001- 1096, p.13].” In its press release, DOL explained, “by rescinding this rule, the department stands up for the rights of Americans to ask a question of their attorney without mandated disclosure to the government.” 

The DOL’s decision marks a great victory for employers all across the country and continues the current administration’s efforts to roll back unwieldy and burdensome regulations. Should you have any questions about this effort, feel free to contact one our Attorneys