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Business Groups Win Fight Over Union ‘Persuader’ Rule

LUBBOCK, Texas (CN) — A federal judge blocked the Labor Department's "persuader" rule Monday, agreeing with 10 states that the new requirement for employers to disclose the identities of anti-union consultants they hire infringes on attorney-advice protections.

U.S. District Judge Sam R. Cummings issued the preliminary injunction against April 25 changes to the Labor-Management Reporting and Disclosure Act. He said the law "plainly, explicitly and unambiguously creates an exemption" from such reporting.

He said the possible injury to the plaintiffs — the National Federal of Independent Business and other groups — "outweighs any threatened harm" to the U.S. Department of Labor.

"By treating 'advice' and persuader activities as mutually exclusive and without any possible overlap, DOL's new advice exemption interpretation makes section 203(c) entirely superflous," Cummings wrote in the 90-page order. "Indeed, DOL improperly reads an exception into the statute's advice exemption that is not there, treating it as exempting all advice except advice that has an object to persuade. Because DOL's new interpretation violates basic canons of statutory interpretation, this court rejects it."

The National Federation of Independent Business and four other business groups sued the Secretary of Labor in Federal Court on March 31, challenging the "persuader advice exemption."

Texas and nine other states intervened in the lawsuit two months later, arguing the change makes it "more difficult and expensive" for small businesses to get legal advice.

Texas Attorney General Ken Paxton argued the rule change may allow the federal government to "invade virtually" any law practice and preempt state regulators who have "absolute authority" to regulate lawyers.

The Labor Department disagreed, saying the rule change "is consistent with traditional protections" for attorney-client privilege."

Paxton hailed Monday's ruling as a "victory for the preservation of the sanctity of attorney-client confidentiality" and for states regulating the practice of law. He blasted President Barack Obama's "repeated attempts to subvert the power" of citizens.

"Every American knows that when they talk to a lawyer, their conversation is confidential," he said in a statement. "That confidentiality has been the cornerstone of the attorney-client relationship since before our nation's founding. If information confidentially given to one's attorney is also accessible by the federal government, it would damage the very foundation of our system of justice."

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