Court Puts Temporary Hold On AGC-Opposed Persuader Rule And Signals High Potential For Permanent Block

In issuing the preliminary injunction, the U.S. District Court for the Northern District of Texas found that the plaintiffs demonstrated a substantial likelihood of success on the merits in their challenge to the validity of the rule and a substantial threat of irreparable harm if the rule were implemented as scheduled. More specifically, the court found that the plaintiffs were likely to succeed in their claims that DOL lacks statutory authority to issue and enforce the rule and that the rule: is arbitrary, capricious, and an abuse of discretion; violates First Amendment rights to free speech and association; violates the Fifth Amendment’s due process clause as overly vague; and violates the Regulatory Flexibility Act.

The case is one of three lawsuits challenging rule in different courts. In a second case, the U.S. District Court for the District of Minnesota declined to issue a preliminary injunction but indicated that the plaintiffs would likely succeed on the merits. The third lawsuit is pending in the U.S. District Court for the Eastern District of Arkansas, which has yet to issue any rulings in the matter. AGC, as a member of the Coalition for a Democratic Workplace, is a plaintiff in that case. AGC is also a member of the U.S. Chamber, which submitted amicus briefs in all three cases.

The injunction issued by the court in Texas will remain in place until a decision is issued on the merits or the injunction is overturned on appeal. DOL has not yet announced whether it will appeal the ruling. AGC will continue to closely monitor the litigation and report on significant developments.