Leading business groups file lawsuit against Labor Department's 'union persuader' rule

National Association of Home Builders joins others in challenging union organizing measure

Two business organizations have filed a lawsuit against the U.S. Labor Department to overturn its new "union persuader" rule.

In their suit, the National Federation of Independent Business (NFIB) and the National Association of Home Builders (NAHB) claim the rule violates business owners' First Amendment rights, making it nearly impossible to consult with legal counsel when facing union organizing.

"Once again, the administration is rigging the game in favor of workplace unionization," said Karen Harned, executive director of the NFIB's Small Business Legal Center. "The DOL is putting small employers at a profound disadvantage."

"Unions pay people whose full-time job is to organize workers," she continued. "Small employers have businesses to run. They don't have in-house lawyers or compliance officers to guide them through the process or navigate the complicated rules governing union organizing."

Ed Brady, chairman of NAHB and a home builder and developer from Bloomington, Ill., said that the rule is fundamentally unfair because it requires employers to report to the DOL whether and when they consult with a lawyer to discuss union organizing. The unions, on the other hand, aren't encumbered by any such requirement.

"DOL's final persuader rule is another example of regulatory overreach that will impose far-reaching reporting requirements on employers and their consultants and result in significant monetary and legal implications for home building firms," said Brady. "This lawsuit is necessary to maintain long standing policy on what union-related communications between employers and attorneys remain confidential."

NFIB and NAHB joined the Texas Association of Business, the Texas Association of Builders and the Lubbock Chamber of Commerce last week in filing a lawsuit against the DOL in the United States District Court, Northern District of Texas, Lubbock Division. The business groups maintain that the rule violates the First Amendment's guarantee of freedom of speech and right of association. Also, according to the plaintiffs, the rule violates the Due Process Clause of the Fourteenth Amendment and the Regulatory Flexibility Act (RFA).

Previously, owners were only required to report when outside counsel directly communicated with employees. Under the new rule business owners will have to report any communication with legal counsel even if the matter ends there. The persuader rule will take effect on July 1, 2016.

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