States Join Business Organizations in Growing Lawsuit Against the DOL

Last week, a federal judge permitted a coalition of 10 states to join a group of business-rights organizations in their lawsuit against the Department of Labor’s (DOL) new “union persuader” rule, estimated to cost businesses $60 billion over the next 10 years.

Back in March, a coalition group including the National Federation of Independent Business (NFIB), the Texas Association of Business, the Lubbock Chamber of Commerce, the National Association of Home Builders (NAHB) and the Texas Association of Builders sued the DOL for reinterpreting a 1959 Labor-Management Reporting and Disclosure Act (LMRDA) to make it harder for employers to receive legal advice about labor and employment issues.

The DOL’s new union persuader rule would force employers to report to the DOL when they and their consultants receive advice from a lawyer involving union organizing. Chairman of the NAHB, Ed Brady, believes this rule is fundamentally unfair since the new rule does not apply to unions as well.

The group of business-rights organizations, and now several states, argue that the DOL’s new rule violates the First Amendment free-speech rights of business owners and poses a serious threat to the confidential nature of the attorney-client privilege, which state governments, not the federal government, have authority to regulate.

According to Brady, “DOL’s final persuader rule is another example of regulatory overreach that will impose far-reaching reporting requirements on employers and their consultants and result in significant monetary and legal implications for home building firms. This lawsuit is necessary to maintain long standing policy on what union-related communications between employers and attorneys remain confidential.”

The new rule is set to take effect on July 1, 2016 and is unfortunately only one of many rules and regulations the Obama Administration has imposed on businesses using the DOL. Congress should act now to overturn the rule before it takes effect by passing H.J. Resolution 87.

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