Press Release: Federal Judge Says Worklaw® Lawsuit Against DOL "Likely to Succeed" in Blocking Changes to Persauder Rules
June 24, 2016
Judge Criticizes Revisions’ “Incoherence,”Casting Serious Doubt on DOL’s Reinterpretation of 50-Year-Old Persuader Rules
Worklaw Attorneys Prepare for Major Victory for American Employers
MINNEAPOLIS – June 23, 2016 – A Federal Judge stated Wednesday that attorneys for Worklaw® Network – a nationwide affiliation of independent law firms representing and advising employers in labor and employment matters – “are likely to succeed” in blocking the U.S. Department of Labor and Secretary Thomas Perez from ultimately implementing a rewrite of the “persuader rule” that is poised to go into full effect July 1.
Wednesday’s ruling by Judge Patrick J. Schiltz of the United States District Court for the District of Minnesota criticized the rule’s “incoherence” and its “flawed premise,” and is the first decision among the three separate legal challenges to the DOL’s controversial “reinterpretation” of labor law reporting requirements that have been in effect for more than 50 years. “The Court therefore concludes that plaintiffs have a strong likelihood of success on their claim that the new rule conflicts with the plain language of the statute,” Judge Schlitz wrote. Even with Wednesday’s conclusion by Judge Schiltz, the DOL’s new interpretation is set to go into full effect July 1 unless courts in other lawsuits grant immediate injunctions.
After a multi-year controversy, the DOL issued in March its “reinterpretation” of the persuader rule that will burden American businesses with sweeping disclosure and paperwork requirements, while undermining attorney-client confidentiality and privilege protections. Worklaw® Network filed its lawsuit to protect American companies – particularly smaller employers – from this arbitrary overreach. Several state attorneys general filed a brief in support of the Worklaw® lawsuit, as did key business groups.
“Today’s announcement is a big step toward a major victory for employers across America, small and large alike” said Millicent Sanchez, president of the Worklaw® Network and a partner at Swerdlow Florence Sanchez Swerdlow & Wimmer. “Our lawsuit sought to protect employers’ right to seek counsel and get advice on sensitive and complicated labor matters. We appreciate the Court’s careful consideration of the facts and of the harm that employers would face if they lost these essential rights.”
If implemented, the DOL’s new interpretation will force vast numbers of employers, attorneys and consultants to disclose confidential information — including the nature of conversations, copies of representation agreements, the amounts of fees paid, and other details – about employment, labor and HR-related legal matters. If not stopped, the rule will chill employer free speech, employee free choice and effective attorney and consultant advice.
Worklaw® Network’s lawsuit was filed on March 31, 2016 against the U.S. Department of Labor and Secretary Thomas Perez over the Interpretation of the “advice exception” in Section 203(c) of the Labor Management Reporting and Disclosure Act, 29 USC 433(c). Worklaw® Network is a nationwide affiliation of independent law firms practicing management-side labor and employment law, with member firms, attorneys or affiliates in 27 U.S. states. More details are available at www.worklaw.com.
Shawe Rosenthal, LLP
Mark J. Swerdlin, Esq., 410-499-8474
Swerdlow Florence Sanchez Swerdlow & Wimmer
Millicent Sanchez, Esq., 310-288-3980 x8203
Seaton, Peters & Revnew, P.A.
Doug Seaton, Esq., 952-921-4604