Secretary of Labor Alexander Acosta has formally initiated the process for rescission of the 2016 DOL regulations narrowing the “advice exemption” to the LMRDA’s so-called “persuader rule.” The Office of Management and Budget’s website confirms the May 22, 2017 receipt of a DOL directive entitled, “Rescission of Rule Interpreting “Advice” Exemption in Section 203 (c) of the Labor-Management Reporting and Disclosure Act.”
This action comes in conjunction with the Wall Street Journal‘s publication of an opinion piece by Secretary Acosta on May 22, entitled “Deregulators Must Follow the Law, So Regulators Will Too.” While focused primarily on the DOL’s approach to the previously delayed, and somewhat controversial DOL Fiduciary Rule, Sec. Acosta also announced this move thus:
Today there are several regulations enacted by the Obama administration that federal courts have declared unlawful. One is the Persuader Rule, which would make it harder for businesses to obtain legal advice. Even the American Bar Association believes the rule goes too far. Last year a federal judge held that “the rule is defective to its core” and blocked its implementation. Now the Labor Department will engage in a new rule-making process, proposing to rescind the rule.
As noted by the Secretary, on June 27, 2016, the District Court for the Northern District of Texas issued a nationwide injunction against the Final Rule published on March 24, 2016. This Final Rule would have required extensive and intrusive reporting by employers and their consultants or advisers who provide any sort of advice that might have some persuasive impact on the employees in their exercise of organizing rights – regardless of whether that consultant or adviser ever has any direct contact with the employees. Despite some clearly contradictory references, this would have required reporting about the lawyer-client relationship in violation of long-standing principles of privilege and confidentiality. On November 16, 2016, the Court made its injunction permanent.
Bloomberg’s Ben Penn notes on Twitter:
This was low-hanging fruit after federal court & ABA opposed persuader. Acosta decisions on other Obama regs won’t necessarily follow suit. https://t.co/XZiO6Fj9KR
— Ben Penn (@benjaminpenn) May 23, 2017
In light of these developments, observations and the WSJ op-ed, it will be interesting to see how Sec. Acosta and the DOL approach the task of executing an agenda focused, in part, on walking back the regulatory expansions of the past several years.