(CN) – The U.S. Department of Labor Tuesday rolled back the Obama-era, pro-union persuader rule that forced employers to disclose the identities of anti-union consultants.
The agency cited attorney-client privilege concerns in its decision to rescind the rule.
Agency Policy Office Deputy Assistant Secretary Nathan Mehrens said in a statement it is standing up “for the rights of Americans to ask questions of their attorney without mandated disclosure” to the federal government.
The agency noted the rule was “strongly condemned by many stakeholders, including the American Bar Association.”
“For decades, the department enforced an easy-to-understand regulation,” Mehrens said. “Personal interactions with employees done by employers’ consultants triggered reporting obligations, but advice between a client and attorney did not.”
The decision comes 24 months after a Texas federal judge blocked the rule, agreeing with business groups and ten states who argued the measure violates attorney-client privilege. U.S. District Judge Sam R. Cummings granted the plaintiff’s motion for summary judgment five months later, permanently barring the rule. According to Cummings, the agency’s treatment of “advice” and persuasive activities as mutually exclusive rendered the rule “entirely superfluous.”
“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,” Cummings wrote in June 2016. “Because DOL’s new interpretation violates basic canons of statutory interpretation, this court rejects it.”
The National Federation of Independent Business and four business groups first challenged the “persuader advice exemption” in April 2016, arguing it hindered employers’ rights to get confidential legal advice and right to communicate with workers about unions. Led by Texas Attorney General Ken Paxton, ten states intervened in the case on the plaintiffs’ behalf one month later.
Paxton applauded the rule’s repeal, saying the measure violated the federal Labor-Management Reporting and Disclosure Act.
“The Persuader Rule is among the Obama administration’s most outrageous and unlawful attempts at federal overreach,” Paxton said in a statement. “The rule would have made it more difficult and expensive for small business owners to obtain legal advice, interfering with attorney-client privilege, which is one of our most basic rights.”