Federal Court Permanently Enjoins the Persuader Rule

On November 16, 2016, the U.S. District Court for the Northern District of Texas (Lubbock Division) converted its injunction preventing implementation of the U.S. Department of Labor’s revised persuader rule on a national basis from preliminary to permanent. According to Judge Sam R. Cummings’s order, the court converted the preliminary injunction to a permanent one for the same reasons “stated in the Court’s Preliminary Injunction Order entered June 27, 2016” in National Federation of Independent Business et al. v. Perez, et al. Judge Cummings found the DOL’s revised persuader rule to be “not merely fuzzy around the edges. Rather the New Rule is defective to its core.”

The June 27 order had enjoined the U.S. Department of Labor (DOL) from implementing and enforcing its revised persuader rule on a national basis. In granting the preliminary injunction, the court had found that the plaintiffs’ challenge to the new rule, which was set to become effective July 1, 2016, had a substantial likelihood of success on the merits and that the plaintiffs had shown that they would be irreparably harmed if the rule was not enjoined.

Lead counsel representing the plaintiffs in the Lubbock case is Jeffrey C. Londa, a shareholder in Ogletree Deakins’ Houston office. Mr. Londa made the following comments following receipt of the latest court order: “We are delighted with this major victory for employers, preserving their right to secure counsel when faced with union organizing. The rule that has now been permanently enjoined on a nationwide basis was part of an effort by the DOL to favor unions when they attempt to organize employees.”