Texas Leads Fight Against Secretary of Labor

LUBBOCK, Texas (CN) — Claiming only states can regulate the legal profession, 10 states on Tuesday sought to intervene in a lawsuit against the secretary of labor, for a new rule that requires employers to reveal the names of anti-union consultants.

Texas Attorney General Ken Paxton said the Department of Labor's "persuader advice exemption" makes it "more difficult and expensive" for small businesses to get legal advice. The rule under the Labor-Management Reporting and Disclosure Act will require employers to disclose the names of consultants they hire to discourage workers from unionizing.

Paxton filed the motion on behalf of the states in a lawsuit filed by five business associations, including the Texas Association of Business and the Lubbock Chamber of Commerce.

"The U.S. Supreme Court has long held that states have the absolute authority to regulate the practice of law within their borders," Paxton said in a statement. "Once again, I find myself standing up to the kind of overreach that has marked the Obama administration." The National Federation of Independent Business et al. sued the Secretary of Labor in Federal Court on March 31. They say "ordinary" tasks performed by employers' attorneys now are to be regarded as "persuader" activity that triggers reporting obligations.

"DOL's new and expanded Advice Exemption Interpretation is contrary to the express language of the LMRDA's Advice Exemption," the complaint states. "It also is inconsistent with the ordinary usage and practice of interpreting such language. Courts have long recognized that an attorney's preparation of materials and documents for a client is a component of providing legal advice protected by the attorney-client privilege."

Joining Texas in its motion to intervene are Alabama, Arkansas, Indiana, Michigan, Oklahoma, South Carolina, Utah, West Virginia and Wisconsin. The states they have a sovereign interest in regulating the legal profession.

"Unless the states intervene, their interests may be impaired because the representation of their interests in regulating the practice of law and preserving attorneys' duties of confidentiality and loyalty, as well as the attorney-client and work-product privileges, will be inadequate," the 8-page motion states. "If DOL's new interpretation and final rule is allowed to stand, the federal government may be permitted, without congressional authorization, to invade virtually any arena of law practice, threaten or preempt state regulations, and alter longstanding rules and principles that are hallmarks of the legal profession and our system of justice."

The states say that "nothing in the language" of the LMRDA suggests Congress intended to impose the regulation on the legal profession., which will "substantially burden" employers' speech rights.

"The issue of unionization is one of substantial public importance," the complaint states. "Speech by employers on the issue of unionization is non-commercial speech that is entitled to the highest form of protection. Any restraint on this speech must pass strict scrutiny. DOL's new and expanded Advice Exemption Interpretation cannot pass strict scrutiny."

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