DOL’s Attempt to Interfere with Attorney-Client Relationships Blocked by Texas Court
Back in March of this year, the Department of Labor (DOL) tried to interfere with employers’ confidential communications with their attorneys. Some law firms surrendered, ran, or hid, saying they would no longer have the kinds of conversations DOL wanted to interfere with. Shawe Rosenthal, along with other Worklaw Network firms, stood up and fought. We filed a lawsuit against the DOL to protect our clients’ interests and maintain the integrity of the attorney-client relationship. Two similar lawsuits were filed against the DOL, and in one of them, employers can consider themselves victorious following an Order from a United States District Court in Texas holding the DOL’s new rule unlawful and setting it aside.
The DOL rule at issue misinterprets a provision of the Labor Management Reporting and Disclosure Act (LMRDA). At a basic level, the LMRDA requires employers to submit reports to the DOL when they hire middlemen to persuade employees regarding their decision to unionize or bargain collectively. The LMRDA explicitly exempts any advice from reporting. Well, the DOL went and upended the LMRDA and 50 years of settled practice by deciding it would require all advice to be reported. Yep, you guessed it- that means the DOL thought it could keep tabs on your conversations with your lawyer about how you can legally respond when a union attempts to secretly infiltrate your workforce.
The November 16, 2016 Order holding the rule unlawful and setting it aside was the third in a string of victories for employers. Previously, the same Texas court issued a preliminary injunction temporarily preventing the DOL from enforcing the rule. The first in the string of victories came almost immediately after the DOL found itself on the receiving end of three lawsuits challenging the rule. The DOL unilaterally suspended its LM-21 reporting requirement, which would have required attorneys to divulge confidential information about all of their clients to the DOL.
The preliminary injunction previously issued by the Texas court is on appeal to the Fifth Circuit, and we should all watch that appeal closely because the current Order relies upon the same reasoning. We will also need to stay tuned to see how the change in Administration impacts the government’s litigation position.