NAHB, NFIB File Lawsuit Against DOL’s New Union Persuader Rule

hardhatgavelNAHB and the National Federation of Independent Business (NFIB) yesterday filed a lawsuit against the U.S. Department of Labor (DOL) asserting that the agency’s new union persuader rule violates business owners’ First Amendment rights, making it nearly impossible to consult with legal counsel when facing union organizing.

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 NAHB Chairman Ed Brady in a joint press release with NFIB. “This lawsuit is necessary to maintain long standing policy on what union-related communications between employers and attorneys remain confidential.”

The Texas Association of Builders, Texas Association of Business and the Lubbock Chamber of Commerce joined NAHB and NFIB 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, business 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 July 1. For more information, contact Amy Chai at 800-368-5242 x8232.

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Comments (10)

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  1. Roger Wohlgemuth says:

    I’m not opposed to unions but this rule seems out of bounds. Most of us do not have a working knowledge of all the ins and outs of negotiations. What if I had a brother in law that was a lawyer? I would have reveal I talked to him too in casual conversation at a family event?

    • NAHB Now says:

      Thank you for your comment. While it is (mercifully) unlikely that a casual conversation with a family member would trigger reporting requirements, the persuader rule does not provide clear guidance as to which conversations and agreements are subject to reporting. Many of our members are in the same position as you – they are not union or labor relations experts, and would benefit from having access to local labor attorneys who are knowledgeable of labor relations laws and have experience in this area. NAHB’s concern is that this regulation will deter attorneys and consultants from working in this field, denying our members access to this source of professional expertise.

    • Von Salmi says:

      As with many of our laws, there will be unintended consequences to improperly or poorly worded laws. There are well qualified jurists who should review such proposed legislation to avoid the afore mentioned pitfalls. Hopefully a consensus could developed to address reasonable concerns from both sides of the argument.

  2. Al Zichella says:

    I hope my colleagues will wake up and realize that this administration and any other left leaning one will owe so much to the labor unions they will not stop the nonsense until all homebuilders will be forced to only use union workers.

    Further, if other members don’t know what that means, let me explain to them that the first thing a Union does with that kind of power is: corrupt it.

    Not to mention that their employees become potential opponents instead of valuable assets, whose main interests will not include our success. It is not only about wages, but also work rules.

    The big losers will be our customers, who will suffer price increases and sticker shock.

    Labor will rise as a percentage of the cost of our product to untenable levels, and we will have killed housing and housing affordability.

    Only the wealthy will be homebuyers, and we will shrink as an association. Who needs a recession to kill us? Unless we wise up we’ll commit suicide. Those who support or are willing to support or even abide unions are being naïve, and must not be allowed to drag the rest of us down.

    Thanks NAHB for taking this on and being diligent. Do not stop being so.

  3. Dan Russell says:

    I took on a Davis Bacon project for a city government. Oh what a mistake. Union goons with clip boards and cameras ready to report any deviation of job categories to the Feds. Had to pay my non union employees several dollars an hour more for doing the same job non Union. Then upon completion of the project they wanted the same wage. Time for them to seek employment elsewhere as the marketplace would not support that raise. This was an Obama stimulus project and that is why I had to pay Union scale. You can read between the lines. Taxpayers had to pay almost a third more for that government project because of Union payback for somebody getting endorsed for president.

  4. I agree with Al Zichella…

  5. Ronald M. Agulnick says:

    It seems to me that whether or not and when the employer consulted with an attorney is as privileged as the content of the conversation and is protected by the attorney-client privilege. If no inference can be drawn from the assertion of the privilege, then what is the relevancy of whether the employer consulted the attorney at all or when. Further, the conversation may not have concerned the organization problem at all. Therefore, if the disclosure could not be required if not related to the organization issue, but is required to be disclosed if related to the issue, than the disclosure becomes content based and certainly violates the privilege.

    Ron Agulnick

  6. Gary Wolfelt says:

    Why don’t we just all send in a new notification every day of every week and bury them up to their asses in paper work? Let them have a bit of their own medicine. GHW

  7. Harry Crowell says:

    I am still amazed we have allowed our government the right to increase the unions power over private business and private employees.
    I wonder why we never complain about the unions sending so much money to Democrats to be sure they always vote for the laws, and rules the union decides will be their benefit.
    I cannot understand why any working American would ever vote for any Democrat, Democrats are beholden to the unions for all the money they receive
    $15 per hour is now the government decided minimum wage?

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