CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 1 of 34

UNITEDSTATESDISTRICTCOURT
DISTRICTOFMINNESOTA
LABNET INC., d/b/a Worklaw Network;
SHAWE & ROSENTHAL LLP; ALLEN,
NORTON & BLUE, P.A.; COLLAZO
FLORENTINO & KEIL LLP; DENLINGER,
ROSENTHAL & GREENBERG; KAMER
ZUCKER ABBOTT; KEY HARRINGTON
BARNES, P.C.; LEHR MIDDLEBROOKS
VREELAND & THOMPSON, P.C.; NEEL
HOOPER & BANES, P.C.; SEATON,
PETERS & REVNEW, P.A.; SKOLER,
ABBOTT & PRESSER, P.C.; and UFBERG
& ASSOCIATES, LLP,

Case No. 16-CV-0844 (PJS/KMM)

ORDER

Plaintiffs,
v.
UNITED STATES DEPARTMENT OF
LABOR; THOMAS E. PEREZ, in his official
capacity as Secretary of Labor; and
MICHAEL J. HAYES, in his official capacity
as Director, Office of Labor-Management
Standards,
Defendants.

DouglasP.Seaton,ThomasR.Revnew,andTaraCraftAdams,SEATON,
PETERS&REVNEW,P.A.;EricHemmendinger,MarkJ.Swerdlin,andParkerE.
Thoeni,SHAW&ROSENTHALLLP,forplaintiffs.
ElisabethLayton,UNITEDSTATESDEPARTMENTOFJUSTICE;AnnM.
Bildtsen,UNITEDSTATESATTORNEYSOFFICE,fordefendants.
PlaintiffLabnet,Inc.(Labnet)isanassociationoflawfirmsthatrepresent
managementinlaborandemploymentmatters.Theremainingplaintiffsaremembers
ofLabnet.Plaintiffsbringthisactiontoenjointheimplementationofarulerecently

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 2 of 34

promulgatedbydefendantUnitedStatesDepartmentofLabor(DOL)underthe
LaborManagementReportingandDisclosureActof1959(LMRDA),29U.S.C.401
etseq.
ThismatterisbeforetheCourtonplaintiffsmotionforatemporaryrestraining
orderor,inthealternative,apreliminaryinjunctionorastay.TheCourtconcludesthat
plaintiffsarelikelytosucceedintheirclaimthatportionsofthenewruleconflictwith
theLMRDA.ButtheCourtneverthelessdeclinestoenjoinorstaythenewruleafter
weighingthefactorsidentifiedbytheEighthCircuitinDataphaseSystems,Inc.v.CL
Systems,Inc.,640F.2d109(8thCir.1981)(enbanc).
I.BACKGROUND
CongressenactedtheLMRDAtoprotectemployeesrightstoorganize,choose
theirownrepresentatives,bargaincollectively,andotherwiseengageinconcerted
activitiesfortheirmutualaidorprotection....29U.S.C.401(a).Tothatend,the
LMRDAimposescertaindisclosureandreportingobligationsonunionsandemployers,
aswellasonpersonswhoareretainedbyemployerstoengageinpersuaderactivities
concerningemployeescollectivebargainingrights.(Typically,suchpersonsare
lawyersorlaborrelationsconsultants.)Specifically,203(b)oftheLMRDA,29U.S.C.
433(b),provides,inrelevantpart:

-2-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 3 of 34

Everypersonwhopursuanttoanyagreementor
arrangementwithanemployerundertakesactivitieswhere
anobjectthereofis,directlyorindirectly
(1)topersuadeemployeestoexerciseornotto
exercise,orpersuadeemployeesastothe
mannerofexercising,therighttoorganizeand
bargaincollectivelythroughrepresentativesof
theirownchoosing....
shallfilewithinthirtydaysafterenteringintosuch
agreementorarrangementareportwiththeSecretary...
containing...adetailedstatementofthetermsand
conditionsofsuchagreementorarrangement....
Inadditiontothereportthatmustbefiledwithin30daysafterenteringintoa
persuaderagreement,consultantsmustalsofileanannualreportforanyyearinwhich
theyreceivepaymentsundersuchanagreement:
Everysuchpersonshallfileannually,withrespecttoeach
fiscalyearduringwhichpaymentsweremadeasaresultof
suchanagreementorarrangement,areportwiththe
Secretary...containingastatement(A)ofitsreceiptsofany
kindfromemployersonaccountoflaborrelationsadviceor
services,designatingthesourcesthereof,and(B)ofits
disbursementsofanykind,inconnectionwithsuchservices
andthepurposesthereof....
29U.S.C.433(b)(2).DOLinterprets203(b)torequireconsultantstoincludeintheir
annualreportsnotonlyinformationaboutemployersforwhomtheyengagedin
persuaderactivity,butalsoinformationaboutallotheremployersforwhomthey

-3-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 4 of 34

providedadviceorservicesconcerninglaborrelations,evenifthatadviceandthose
servicesdidnotinvolvepersuaderactivity.
Thereportingobligationin203(b)issubjecttoacrucialqualificationa
qualificationthatisthefocusofDOLsnewrule,andthusofthislawsuit.Under
203(c)oftheLMRDA,29U.S.C.433(c),themeregivingofadvicedoesnottrigger
anobligationtoreport:
Nothinginthissectionshallbeconstruedtorequireany
employerorotherpersontofileareportcoveringthe
servicesofsuchpersonbyreasonofhisgivingoragreeingto
giveadvicetosuchemployer....
Therearetwopossiblewaystounderstand203(c):
First,Congresscouldhaveviewedthepersuaderactivitycoveredby203(b)and
theadvicecoveredby203(c)asmutuallyexclusivecategories.Underthisview,
203(c)wouldnotbeexemptingadvicefromthereportingrequirementsof203(b);
instead,advicewouldnotbecoveredby203(b)inthefirstplace.Thisunderstanding
ofthestatutedeprives203(c)ofanyindependentforce,however.Section203(c)
wouldhavenopurpose,otherthanthebeltandsuspendersfunctionofemphasizingor
clarifyingwhatisalreadyprovidedin203(b).Inotherwords,underthis
understanding,theeliminationof203(c)fromtheLMRDAwouldhavenosubstantive
impactwhatsoever.

-4-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 5 of 34

Second,Congresscouldhaveviewedadviceasatypeofpersuaderactivity.
Underthisview,203(c)providesanexemptioni.e.,203(c)recognizesthatadvice
canbepersuaderactivityandexemptssuchadvicefromthereportingrequirements
thatwouldotherwiseapplyunder203(b).Thisunderstandingofthestatuteobviously
gives203(c)animportantfunctioninlimitingthescopeof203(b).Anddeleting
203(c)fromtheLMRDAwouldthushaveamajorsubstantiveimpact.
TheEighthCircuitlongagoadoptedthislatterunderstandingof203(c)that
is,theunderstandingthat203(c)exemptsadvicethatispersuaderactivityfromthe
reportingrequirementsthatwouldotherwiseapplytothatadviceunder203(b).See
Donovanv.RoseLawFirm,768F.2d964,973(8thCir.1985)([W]edonotagreewiththe
Fourth,Fifth,Sixth,andSeventhCircuitsthatthelegislativehistoryoftheLMRDA
supportstheviewthat203(c)ismerelyaprovisotomakeexplicittheimplicit
triggeringrequirementof203(b).).Andforoverahalfcentury,DOLs
understandingofthestatutehasbeenthesame.DOLhasdescribed[t]hevery
purposeoftheadviceexemption(203(c))asremov[ing]from[203(b)s]coverage
certainactivitythatotherwisewouldhavebeenreportable.IntlUnion,UnitedAuto.,
Aerospace&Agric.ImplementWorkersofAm.v.Dole,869F.2d616,618(D.C.Cir.1989)
(emphasisadded).Obviously,advicecannototherwise...[be]reportableunlessitis
possibleforadvicetobepersuaderactivitycoveredby203(b).

-5-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 6 of 34

Indeterminingwhatpersuaderactivityconstitutesadviceandthusfalls
within203(c)sexemptionDOLhaslongappliedabrightlineacceptorrejecttest.
81Fed.Reg.15,935.So,forexample,apolicyorspeechthataconsultantprovidestoan
employerforuseinpersuadingemployeesisdeemedtobenonreportableadviceso
longastheemployerisfreetoacceptorrejecttheconsultantswork.81Fed.
Reg.15,936.Andsince1989,DOLhastakenthepositionthat,asapracticalmatter,the
acceptorrejectstandardgenerallylimitsreportableactivitytothatwhichinvolves
directcontactbetweentheconsultantandemployees.81Fed.Reg.15,926,15,936.
Withtheexceptionofabriefperiodin2001,DOLhasfollowedtheacceptor
rejectstandardsince1962.81Fed.Reg.15,93536.Duringthistime,thereportingof
persuaderactivitieshasbecomeuncommon,becausepersuadersonlyrarelyhavedirect
contactwithemployees.81Fed.Reg.15,931.Atthesametime,employershave
increasinglycometorelyonoutsideconsultantsandlawyerstohelpthemconductanti
unionizationcampaigns.81Fed.Reg.15,931.DOLestimatesthatemployersuse
consultantstoengageinsuchindirectpersuasioninover70percentofunion
organizingcampaigns.81Fed.Reg.15,926,15,961.AsdescribedbyDOL:
Theconsultanthasnodirectcontactwithemployees,butit
directsacampaign,oftenformulaicinitsdesignand
implementation,fortheemployertopersuadeemployeesto
voteagainstunionrepresentation.Underthisarrangement,
theconsultantoftenscriptsthecampaign,includingdrafting
letters,flyers,leaflets,andemailsthattheemployer
-6-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 7 of 34

distributestoitsemployees,writingspeechesthat
managementgivestoemployeesinmandatorymeetings,
providingstatementsforsupervisorstouseinmeetingsthey
arerequiredtoholdwithemployeeswhoreporttothem,
ofteninoneononesettings,andcontrollingthetiming,
sequence,andfrequencyofeachoftheseevents.
81Fed.Reg.15,926.
Inanefforttorequiredisclosureofmoreofthisindirectpersuaderactivity,DOL
promulgatedanewruleentitledInterpretationoftheAdviceExemptioninSection203(c)
oftheLaborManagementReportingandDisclosureAct,81Fed.Reg.15,923(Mar.24,2016).1
1

Theofficialcitationforthisruleis81Fed.Reg.15,923.SeeInterpretationofthe
AdviceExemptioninSection203(c)oftheLaborManagementReportingandDisclosureAct,
https://federalregister.gov/a/201606296.ToretrievetheruleinWestlaworLexis,
however,thecitationis81Fed.Reg.15,924.(Thesedatabasesapparentlydonotinclude
thetitlepage.)
Theactualtextofthenewrule,ascodifiedintheCodeofFederalRegulations,
doesnotsetforthDOLsnewinterpretationofadvice.Instead,theregulationsdirect
theuseofnewreportingforms.See81Fed.Reg.16,02021.Essentially,then,the
substanceofthenewruleisembodiedintheformsandthedirectionsthatDOL
providesaboutfillingouttheforms.TheseformsincludetheLM10(foremployersto
reportarrangementsforpersuaderactivities),theLM20(forconsultantstoreport
persuaderactivities),andtheLM21(forconsultantsannualreports).
DOLrevisedboththeLM10andtheLM20toreflectitsnewinterpretationof
thescopeofthereportingobligationunder203(b)and(c).DOLhasnotyetrevised
theLM21,however.Instead,DOLintendstoaddresstheLM21inaseparate
rulemaking,81Fed.Reg.16,000,andDOLhasannouncedthat,forthetimebeing,itwill
notrequirecompliancewiththoseportionsoftheLM21thatrequirereportingof
informationrelatingtoemployersforwhomtheconsultantdidnotengageinany
persuaderactivity,seeU.S.DeptofLabor,FormLM21SpecialEnforcementPolicy
(Apr.13,2016),
(continued...)
-7-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 8 of 34

Thenewruledispenseswiththelongstandingacceptorrejecttest.81Fed.
Reg.15,937.Instead,DOLnowdefinesadviceasanoralorwrittenrecommendation
regardingadecisionoracourseofconduct.81Fed.Reg.15,939.
Moreover,DOLhasabandoneditslongstandinginterpretationoftheLMRDA
andnowinsiststhatsomethingdonebyaconsultantcannotbebothpersuaderactivity
andadvice.Asnoted,thisconflictswiththeEighthCircuitsunderstandingofthe
statute,andDOLspositionisdifficulttounderstand:If,forexample,aconsultantgives
advicetoanemployerabouthowtopersuadeitsemployeestovoteagainstunion
representation,theconsultantisobviouslyengaginginpersuaderactivity,andthe
consultantisjustasobviouslygivingadvice.YetDOLnowinsiststhatpersuader
activityandadvicearedistinctcategorieswithnooverlap:
Advicedoesnotincludepersuaderactivities,i.e.,actions,
conduct,orcommunicationsbyaconsultantonbehalfofan
employerthatareundertakenwithanobject,directlyor
indirectly,topersuadeemployeesconcerningtheirrightsto
organizeorbargaincollectively.
81Fed.Reg.15,937.

(...continued)
https://www.dol.gov/olms/regs/compliance/ecr/lm21_specialenforce.htm.
-8-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 9 of 34

DOLthenproceedsfromthispremisetoidentifyfivegeneralcategoriesof
reportableactivityi.e.,activitiesthat,inDOLsview,arepersuaderactivityand
thereforecannotpossiblybeadvice:2
(1)

Aconsultantengagesindirectcontactorcommunicationwithany
employee,withanobjecttopersuadesuchemployee;or

(2)

Aconsultantwhohasnodirectcontactwithemployeesundertakesthe
followingactivitieswithanobjecttopersuadeemployees:
(a)

[p]lans,directs,orcoordinatesactivitiesundertakenbysupervisors
orotheremployerrepresentatives,includingmeetingsand
interactionswithemployees;

(b)

providesmaterialorcommunicationstotheemployer,inoral,
written,orelectronicform,fordisseminationordistributionto
employees;

TherevisedLM20formforreportingpersuaderactivities(whichisattachedin
anappendixtothenewrule)furtherbreaksthesecategoriesdowninto13separate
activities.81Fed.Reg.16,051.Theactivitiesare(1)drafting,revising,orproviding
writtenmaterialsforpresentation,dissemination,ordistributiontoemployees;
(2)drafting,revising,orprovidingaspeechforpresentationtoemployees;(3)drafting,
revising,orprovidingaudiovisualormultimediapresentationsforpresentation,
dissemination,ordistributiontoemployees;(4)drafting,revising,orprovidingwebsite
contentforemployees;(5)planningorconductingindividualemployeemeetings;
(6)planningorconductinggroupemployeemeetings;(7)trainingsupervisorsor
employerrepresentativestoconductindividualorgroupemployeemeetings;
(8)coordinatingordirectingtheactivitiesofsupervisorsoremployerrepresentatives;
(9)establishingorfacilitatingemployeecommittees;(10)developingemployer
personnelpoliciesorpractices;(11)identifyingemployeesfordisciplinaryaction,
reward,orothertargeting;(12)conductingaseminarforsupervisorsoremployer
representatives;and(13)speakingwithorotherwisecommunicatingdirectlywith
employees.TheLM10formforemployerscontainsanidenticallist,exceptthatitomits
(12)(theseminaractivity).81Fed.Reg.16,038.
-9-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 10 of 34

(c)

conductsaseminarforsupervisorsorotheremployer
representatives;or

(d)

developsorimplementspersonnelpolicies,practices,oractionsfor
theemployer.

81Fed.Reg.15,938.ThefirstcategorysimplyrestatesDOLslongstanding
interpretationthatdirectcontactwithemployeesisreportableactivity;theremaining
fourcategoriesrepresentDOLsattempttonarrowtheadviceexemptioninorderto
capturemoreindirectpersuaderactivity.
Ifaconsultantengagesinanyoftheseactivitieswiththerequisiteintent,then
DOLconsiderstheactivityreportable,withoutanyneedeventoaskwhetherthe
activitywouldalsoconstituteadvice.See81Fed.Reg.15,969(Theanalysishastwo
parts:(a)Didtheconsultantengageinthedirectandindirectcontactactivities
identifiedintheinstructions;and(b)didtheconsultantdosowithanobjecttopersuade
employees?);seealso81Fed.Reg.15,937(Thisrulerestoresthefocusofsection203
persuaderreportingtowhetheraconsultantsactivities...haveanobjecttopersuade
employeesabouttheirunionrepresentationandcollectivebargainingrights.).

-10-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 11 of 34

II.ANALYSIS
A.StandardofReview
Acourtmustconsiderfourfactorsindecidingwhethertograntapreliminary
injunctionorstaytheenforcementofaregulation:3(1)themovantslikelihoodof
successonthemerits;(2)thethreatofirreparableharmtothemovantiftheinjunctionis
notgranted;(3)thebalancebetweenthatharmandtheinjurythatgrantingthe
injunctionwillinflictontheotherparties;and(4)thepublicinterest.SeeDataphaseSys.,
Inc.v.CLSys.,Inc.,640F.2d109,114(8thCir.1981)(enbanc).Preliminaryinjunctions
areextraordinaryremedies,andthepartyseekingsuchreliefbearstheburdenof
establishingitsentitlementtothereliefundertheDataphasefactors.SeeWatkinsInc.v.
Lewis,346F.3d841,844(8thCir.2003).
Inordinarycases,apartyseekingapreliminaryinjunctionneednotshowthatit
ismorelikelythannottosucceed;instead,apartyneedshowonlyafairchanceof
prevailingonthemerits.SeePlannedParenthoodMinn.,N.D.,S.D.v.Rounds,530F.3d
724,733(8thCir.2008)(enbanc);DataphaseSys.Inc.,640F.2dat11314.Whenaparty
seekstoenjoinastatuteorregulation,however,thepartymustestablishalikelihoodof
successonthemeritsthatis,agreaterthanfiftypercentchanceofprevailing.See
3

Asplaintiffsnote,whenapartychallengesaregulationunderthe
AdministrativeProcedureAct,theappropriatereliefisnotapreliminaryinjunctionbut
ratherastay.See5U.S.C.705.Thepartiesagreethattherelevantfactorsandanalysis
arethesameineithercase.
-11-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 12 of 34

Rounds,530F.3dat73233&n.6.Thisstricterstandardreflectstheideathat
governmentalpoliciesimplementedthroughlegislationorregulationsdeveloped
throughpresumptivelyreasoneddemocraticprocessesareentitledtoahigherdegreeof
deferenceandshouldnotbeenjoinedlightly.Id.at732(quotingAblev.UnitedStates,
44F.3d128,131(2dCir.1995)).
B.LikelihoodofSuccess
1.CountI:ContrarytoStatute
PlaintiffschallengethenewruleundertheAdministrativeProcedureAct
(APA),5U.S.C.706,allegingthatthenewruleiscontrarytotheplainmeaningof
203(c)oftheLMRDA.DOLhastheauthoritytoissue,amend,andrescindrulesand
regulationsthatprescribetheformandpublicationofreportsrequiredbytheLMRDA
andthatarenecessarytopreventtheevasionofthereportingrequirements.29U.S.C.
438.Thepartiesagreethat,becauseDOLpromulgatedthenewruleunderthis
rulemakingauthority,itsinterpretationofthestatutemustbeexaminedunderChevron,
U.S.A.,Inc.v.NaturalResourcesDefenseCouncil,Inc.,467U.S.837(1984).
ThefirststepunderChevronistodeterminewhetherthestatutorylanguage
clearlyresolvestheissue.Id.at842.IfCongresssintentisclear,thentheinquiryends.
Id.at84243.Ifthestatuteissilentorambiguous,however,thenthecourtmust

-12-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 13 of 34

determinewhethertheagencysanswerisbasedonapermissibleconstructionofthe
statute.Id.at843.
Asageneralmatter,theCourtagreeswithDOLthatitspreviousinterpretation
of203(b)and203(c)wasunderinclusive.Inotherwords,theCourtagreesthatanact
canconstitutepersuaderactivityandnotconstituteadviceeventhoughtheactdoes
notinvolvedirectcontactwithemployees.UnderDOLslongstandinginterpretationof
theLMRDA,somepersuaderactivitythatwasreportableunder203(b),andnot
exemptunder203(c),neverthelesswentunreported.Thus,theCourtrejectsany
suggestionthatDOLcannotchangeitsinterpretationoftheLMRDAtorequire
reportingofpersuaderactivitythatdoesnotinvolvedirectcontactwithemployees.
TheCourtagreeswithplaintiffs,however,thatDOLsnewruleconflictswith
203(c)atleastinsomeofitsapplicationsbecauseitrequiresaconsultanttofilea
reportcoveringtheservicesofsuchpersonbyreasonofhisgivingoragreeingtogive
adviceto[an]employer....TheproblemisnotwiththemannerinwhichDOL
formallydefinesadvice.Again,DOLnowdefinesadvicetomeananoralor
writtenrecommendationregardingadecisionoracourseofconduct,whichisa
perfectlyreasonablewaytodefinetheterm.81Fed.Reg.15,939.Theproblemisthat
DOLdoesnotapplyitsowndefinitionofadvice.Instead,DOLrequiresreportingof

-13-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 14 of 34

activitythatisadviceunderanyreasonableinterpretationofthatwordincluding
DOLs.
AttherootofDOLsproblemisitsinsistencethatpersuaderactivityandadvice
aremutuallyexclusivecategories.Asalreadynoted,thisisnotwhattheEighthCircuit
believes,andthisCourthasdifficultyunderstandinghowthiscouldbetrue.Giving
adviceisunquestionablyanactivity,andthatactivitycanunquestionablybe
performedwiththeintenttoindirectlypersuadeemployeestoexerciseornotto
exercise,orpersuadeemployeesastothemannerofexercising,therighttoorganize
andbargaincollectivelythroughrepresentativesoftheirownchoosing....29U.S.C.
433(b)(1).
Inreversingapositionthatithasmaintainedforoverahalfcenturyandin
denyingtheveryexistenceofwhattheD.C.Circuitdescribedastheoverlaparea,
InternationalUnion,869F.2dat618DOLhaspainteditselfintoacorner.Bystarting
withthepremisethat,ifsomethingispersuaderactivity,itcannotpossiblybeadvice,
DOLendsupstrugglingmightilytodefineasnonadviceactivitythatanyreasonable
personwoulddefineasadvice.Andinthecourseofthatstruggle,DOLendsup
drawinglinesthataresimplyincoherent.
Take,forexample,ahypotheticalthattheCourtposedtoDOLatthehearingon
plaintiffsmotion:Alawyerwritesthefollowinglettertoaclient:Iadviseyouto

-14-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 15 of 34

adoptamoregenerouspolicyregardinglunchbreaksinordertopersuadeyour
employeesnottounionize.SeeHrgTr.5455,May26,2016[ECFNo.59].Writingand
sendingthisletterisclearlypersuaderactivity:Thelawyerhasengagedinan
activity,andthelawyersobjectistoindirectlypersuadeemployees...notto
exercise...therighttoorganizeandbargaincollectivelythroughrepresentativesof
theirownchoosing....Nevertheless,DOLsaysthatthisisnonreportableadvice.
HrgTr.5455.Inotherwords,DOLagreesthatthispersuaderactivityisadvice,even
thoughDOLalsoinsiststhatpersuaderactivitycannotbeadvice.
Alterthehypotheticaljustabit:Alawyerwritesthefollowinglettertoaclient:
Iadviseyoutoadopttheattachedpolicyregardinglunchbreaksinordertopersuade
youremployeesnottounionize.Attachedtotheletterisadraftofamoregenerous
policyregardinglunchbreaks.Writingandsendingthisletterclearlyinvolvesthe
givingofadvice:Thelawyerhasadvisedtheclienttoadoptaparticularpolicy.Yet
this,saysDOL,isnotadvice,butinsteadpersuaderactivity.HrgTr.55.
Thereisnomeaningfuldistinctionbetweenthesetwoscenarios.Indeed,when
DOLsattorneywaspressedatoralargumenttoidentifyameaningfuldistinction,she
couldnotdoso,evenaftersilentlycontemplatingthequestionforalengthyperiodof
time.Thisfailuredidnotrepresentanyshortcomingonthepartofcounsel,butthe

-15-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 16 of 34

incoherenceofthepositionthatshewassenttodefend.Itisdifficulttounderstand
whyitwouldmatterwhether,inalettertoanemployer,aconsultantsays:
!

Iadviseyoutogiveyouremployeesaonehourpaidlunchbreakin
ordertopersuadethemnottounionize.

Iadviseyoutoadoptthefollowingpolicyinordertopersuadeyour
employeesnottounionize:Effectiveimmediately,employeeswillbe
givenaonehourpaidlunchbreak.

Iadviseyoutoadopttheattachedpolicyinordertopersuadeyour
employeesnottounionize.(Theattachmentisasheetofpaperthat
reads:Effectiveimmediately,employeeswillbegivenaonehourpaid
lunchbreak.)

Inallthreecases,thelawyerisbothgivingadvice(asanyreasonableperson
woulddefinethatterm)andengaginginpersuaderactivity.YetDOLwoulddeemthe
firstlettertoconstitute(only)nonreportableadviceandthethirdlettertoconstitute
(only)reportablepersuaderactivityandtheCourtdoesnotknowwhatDOLwould
thinkofthesecondletter.
TheCourtandDOLsattorneyhadsimilardifficultyfiguringouthowDOLs
newinterpretationof203(c)wouldapplyinothercontexts.Forexample,DOLs
attorneysuggested(withoutbeingquitesure)thatitwouldbereportablepersuader
activityandthereforenotadvicetoadviseaclienttodistributeaflyertoemployees
statingthattheclientsindustryiscurrentlyinarecessionandthatunionizedfirmstend
tofailatafasterratethannonunionizedfirms.HrgTr.52.TheCourtcannot

-16-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 17 of 34

understandhowthisscenarioisdistinguishableinanymaterialwayfromadvisinga
clienttoadoptamoregenerouslunchpolicy,whichDOLadmitsisnonreportable
advice.
Likewise,DOLhadtroubleexplainingwhenandwhyrevisinganemployer
drafteddocumentisreportableunderitsinterpretationof203(c).HrgTr.5759.
Supposethatanemployerasksitsattorneytoeditadraftofamemorandumthatthe
employerintendstosendtoitsemployeestopersuadethemnotunionize.Ifthe
attorneycorrectsspellingerrors,hastheattorneyengagedinreportablepersuader
activity?Whatiftheattorneycorrectsgrammaticalmistakes?Suggestsreplacing
passiveverbswithactiveverbs,sothatthedocumentwillbemorepersuasive?
Suggestsafontthatiseasierontheeyes,sothatemployeeswillbemorelikelytoread
thedocument?Suggestsinsertingonewordinonesentence?Suggestsinsertingafew
wordsinafewsentences?Suggestsinsertingafewsentences?Itseemsprettyclearthat
DOLconsiderscorrectingspellingerrorstobenonreportableadvice,andadding
wordsorsentencestobereportablepersuaderactivity,butitisnotatallclearhowDOL
comestothisconclusion.
DOLcontendsthatitsinterpretationof203(c)issoundnotwithstandingthefact
thatithasdifficultyapplyingthatinterpretationtocertainhypotheticalscenarios.But
theCourtsquestionsdidnotinvolveexoticscenariosoroutliercases;theCourtasked

-17-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 18 of 34

DOLaboutthesortofbreadandbutterworkthatlawyersperformforclientsevery
singleday.DOLsdifficultyansweringtheCourtsquestionsreflectsnottheinevitable
ambiguitiesthatarisewhenapplyingareasonablyclearprincipletomarginalcases,but
rathertheuntenabilityofDOLscentralpositionthatpersuaderactivitycanneverbe
advice,andadvicecanneverbepersuaderactivity.
Proceedingfromthatflawedpremise,DOLcategorizesconductthatclearly
constitutesadviceasreportablepersuaderactivity.Forexample,alawyerwhomerely
advisesaclienttoadoptanewpolicyormerelyadvisesaclienttoaddasentencetoa
memorandumtoitsemployeeshasdoneonethingandonethingonly:giventhe
clientadvice.Under203(c),thegivingofadvicetoanemployercannot,byitself,
triggerthereportingrequirement.ButunderDOLsnewinterpretation,thegivingof
whatanyreasonablepersonwoulddefineasadvicedoes,byitself,triggerthe
reportingrequirement.TheCourtthereforeconcludesthatplaintiffshaveastrong
likelihoodofsuccessontheirclaimthatthenewruleconflictswiththeplainlanguage
ofthestatute.4

Plaintiffsalsocontendthatthenewrulerequiresattorneystodisclose
confidentialinformationandthereforeconflictswith29U.S.C.434.Forthereasons
explainedatthehearing,however,theCourtinterprets434toapplyonlyto
informationprotectedbytheattorneyclientprivilege(ratherthantoallinformation
thatcouldbeconsideredconfidential),andtheCourtdoesnotagreethatthenewrule
requiresthedisclosureofprivilegedinformation.HrgTr.1424.
-18-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 19 of 34

TheCourtemphasizesthatitdoesnotholdthatthewordadvicein203(c)is
clearinallofitsapplicationsandthusthatthereisnoroomforDOLtoengagein
interpretation.Rather,theCourtholdsthatthewordadviceisclearinsomeofits
applicationsi.e.,thattherearecertainactivities(suchasadvisingaclienttoadda
sentencetoamemorandum)thatinvolvethegivingofadviceunderanyreasonable
interpretationofthewordandthatDOLsnewregulationconflictswith203(c)
becauseitrequiressomeofthoseactivitiestobereported.
2.CountII:FirstAmendment
Plaintiffsnextcontendthatthenewruletargetsantiunionspeechandtherefore
unconstitutionallydiscriminatesonthebasisofviewpointandcontent.SeeReedv.Town
ofGilbert,Ariz.,135S.Ct.2218,222930(2015)(describingthedistinctionbetween
contentandviewpointdiscrimination).TheCourtdisagrees.
Theruledoesnotdiscriminatebasedonviewpoint;instead,theruleappliesto
bothproandantiunionspeech,asdoestheLMRDAitself.LiketheLMRDA,therule
requiresreportingofactivitiesthathaveasanobjecttopersuadeemployeestoexercise
ornottoexercise,orpersuadeemployeesastothemannerofexercising,therightto
organizeandbargaincollectivelythroughrepresentativesoftheirownchoosing....
29U.S.C.433(b)(1);81Fed.Reg.16,038(LM10trackingstatutorylanguage);81Fed.
Reg.16,051(LM20trackingstatutorylanguage).IftheLMRDAitselfdoesnot

-19-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 20 of 34

unconstitutionallydiscriminateonthebasisofviewpointandplaintiffscomplaint
doesnotallegethatitdoesthenplaintiffsareunlikelytobeabletoestablishthatthe
newruleunconstitutionallydiscriminatesonthebasisofviewpoint.
Plaintiffspointtothediscussionofantiunionactivitiesinthepreambletothe
ruleasproofthattherulediscriminatesonthebasisofviewpoint.Butthecontention
thatastatuteisviewpointbasedsimplybecauseitsenactmentwasmotivatedbythe
conductofthepartisansononesideofadebateiswithoutsupport.Hillv.Colorado,
530U.S.703,724(2000);seealsoPhelpsRoperv.Nixon,545F.3d685,691(8thCir.2008)
(Theplainmeaningofthetextcontrols,andthelegislaturesspecificmotivationfor
passingalawisnotrelevant,solongastheprovisionisneutralonitsface.),overruled
onothergroundsbyPhelpsRoperv.CityofManchester,Mo.,697F.3d678(8thCir.2012)(en
banc).Thenewruledoesnot,therefore,regulateonthebasisofviewpoint.
Plaintiffsarecorrect,however,thatthenewruleliketheLMRDA
itselfregulatesonthebasisofcontent.SeeReed,135S.Ct.at2230(aspeech
regulationtargetedatspecificsubjectmatteriscontentbasedevenifitdoesnot
discriminateamongviewpointswithinthatsubjectmatter).Butitdoesnotfollowthat
thenewrule(ortheLMRDA5)mustwithstandstrictscrutiny.Instead,becausethenew

PlaintiffshavenotallegedthattheLMRDAisunconstitutional.IftheLMRDAis
aconstitutionalcontentbasedstatute,thenthenewruleislikelyaconstitutional
contentbasedregulation.
-20-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 21 of 34

ruleimposesdisclosureobligations,itissubjecttotheexactingscrutinystandard.See
CitizensUnitedv.Fed.Elec.Commn,558U.S.310,36667(2010)(applyingexacting
scrutinytodisclosurerules);Minn.CitizensConcernedforLife,Inc.v.Swanson,692F.3d
864,87475(8thCir.2012)(enbanc)(althoughlawsthatburdenpoliticalspeechare
ordinarilysubjecttostrictscrutiny,disclosurelawsareinsteadsubjecttoexacting
scrutiny).6Underthisstandard,theremustbeasubstantialrelationbetweenthe
disclosurerequirementandasufficientlyimportantgovernmentalinterest.Citizens
United,558U.S.at36667.
Applyingexactingscrutiny,courtshaveuphelddisclosurerequirements
imposedonelectionrelatedcontributionsandexpenditures.Id.;Buckleyv.Valeo,424
U.S.1,6061(1976).Plaintiffscontendthatthiscaseisdistinguishablefromelection
casesbecausethegovernmentalinteresthereisweaker.Inelectioncases,thereisa
stronginterestinknowingwhohascontributedtoacandidate,becausethecandidate
maybebeholdentothosecontributors.Andthereisastronginterestinknowingwho
isbehindanadvertisementorotherdirectcontactwithvoters.Inthiscase,plaintiffs
say,thereisnosimilarinterestindisclosingtheidentityofconsultants.Employerspay
consultantsfortheirservices,andthusarenotbeholdentotheminthewaythatelected
6

Plaintiffsargumentthatstrictscrutinyappliestodisclosurerequirementsthat
arecontentbasedisplainlyincorrect;theSupremeCourthasappliedexactingscrutiny
todisclosurelawsthatareexplicitlycontentbased.SeeCitizensUnited,558U.S.at366
67(upholdingdisclosurelawaimedatelectioneeringcommunications).
-21-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 22 of 34

officialsarebeholdentocontributors.Andconsultantshavenodirectcontactwith
employees;anemployerwhospeakstoitsemployeesisspeakingonitsownbehalf
(evenifaconsultantdraftedthespeech),justasacandidateforofficeisspeakingonhis
orherownbehalf(evenifacampaignaidedraftedthespeech).
Inupholdingdisclosurerequirementsregardingelections,however,theSupreme
Courthasnottakensuchalimitedviewofthegovernmentinterestsatstake.In
additiontorecognizingthevalueofdeterringcorruptionandprovidingvoterswith
informationaboutthirdpartiestowhomacandidatemightbebeholden,theSupreme
Courthasalsorecognizedthatidentifyingthesourceoffundsallowsvoterstoplace
eachcandidateinthepoliticalspectrummorepreciselythanisoftenpossiblesolelyon
thebasisofpartylabelsandcampaignspeeches.Buckley,424U.S.at67;seealsoid.at81
(Thecorruptionpotentialofthese[independent]expendituresmaybesignificantly
different,buttheinformationalinterestcanbeasstrongasitisincoordinatedspending,
fordisclosurehelpsvoterstodefinemoreofthecandidatesconstituencies.).Beyond
that,theSupremeCourthasrecognizedtheinterestofshareholdersinevaluating
whethertheircorporationspoliticalspeechadvancesthecorporationsinterestin
makingprofits....CitizensUnited,558U.S.at370.
Inotherwords,disclosureisvaluablenotsimplybecauseitdeterscorruption,
butalsobecauseitprovidesinformationabouttheviewsofcandidatessupporters,

-22-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 23 of 34

whichinturnprovidesafullercontextforunderstandingtheviewsofthecandidates
themselves.Further,thegovernmentalinterestindisclosureextendsbeyondthe
politicalarena;disclosureisalsovaluableinenablingshareholderstoexercisetheir
rightsasstakeholdersinabusinessthatmakespoliticalcontributions.
Theinterestshereareanalogous.Asthegovernmentargues,employeesare
betterequippedtoassessanemployersunionrelatedmessageiftheyknowthatthe
messagehasbeenscriptedbyathirdparty.Forexample,employerscommonlyargue
thataunionisathirdpartythatemployeesdonotneedtofurthertheirinterests,81
Fed.Reg.15,932,andthattheemployerlacksthefinancialresourcestodealwitha
union,81Fed.Reg.15,92627.Knowingthatmessagesfromanemployeroriginated
withathirdpartywhowaspaidbytheemployertohelpinfluencetheemployeesgives
thoseemployeesafullercontextinwhichtoevaluatetheemployersarguments.Such
transparencyenablestheelectoratetomakeinformeddecisionsandgiveproper
weighttodifferentspeakersandmessages.CitizensUnited,558U.S.at371;cf.
Humphreys,Hutcheson&Moseleyv.Donovan,755F.2d1211,1215(6thCir.1985)(rejecting
argumentthatdisclosureofdirectcontactpersuaderactivitywasnotrequiredwhere
identityofpersuaderwasalreadymadeknowntoemployees).
Forthesereasons,plaintiffshavefailedtoestablishthattheyarelikelytosucceed
ontheirFirstAmendmentclaims.

-23-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 24 of 34

3.CountIII:VoidforVagueness
Plaintiffsnextcontendthatthenewruleisvoidforvagueness.SeeFCCv.Fox
TelevisionStations,132S.Ct.2307,2317(2012)(lawsmustbesufficientlyclearsoasto
provideregulatedpartiesnoticeoftheirobligationsandpreventarbitraryand
discriminatoryenforcement).Again,theCourtdisagrees.
TheCourthasfoundthataspectsofthenewrulearelikelyinvalidbecausethey
requirethereportingofadvicethatisexemptfromdisclosureunder203(c).TheCourt
hasalsoquestionedthemannerinwhichDOLhasconstruedthetermadvice,
pointingoutthatDOLmakesdistinctionsbetweenactivitiesthatarematerially
indistinguishableandstrugglestoplacecertaincommonactivitiesononesideorthe
otheroftheuntenabledividethatithascreatedbetweenpersuaderactivitiesand
advice.ButtheCourtscriticismshouldnotbeconfusedwithafindingthattherule
itselfisimpermissiblyvague.
Tothecontrary,theapplicationofthenewruleappearsratherstraightforward.
Asexplainedabove,theruleisessentiallyembodiedintherevisedLM10andLM20
formsandtheircorrespondinginstructions.Theformsaskfilerstoindicatewhether
anyactivitieswereundertakenwiththerequisiteintent,andthenprovideadetailedlist
ofthirteendifferentactivitiesfromwhichtochoose.Thedescriptionsoftheactivities
arefairlyconcreteandeasytounderstand.Fillingouttheformissimplyamatterof

-24-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 25 of 34

checkingtheboxnexttotheactivityoractivitiesthatthefilerperformed(or,ifthefiler
isanemployer,contractedfor)withtherequisiteintent.
PlaintiffscontendthattheruleisneverthelessvaguebecauseDOLprovideslittle
guidanceindeterminingwhenanactivityisperformedwiththerequisiteintentto
persuade.Butaregulationisnotvaguebecauseitmayattimesbedifficulttoprovean
incriminatingfact;rather,aregulationisvaguewhenitisunclearastowhatfactmust
beproved.Id.Here,itisclearwhatfactmustbeproved:thefilersmentalstate.Cf.
MasterPrintersofAm.v.Donovan,751F.2d700,711(4thCir.1984)(rejectingvagueness
challengetoLMRDAbecausethewordpersuadeissufficientlyclear).
PlaintiffsfaultDOLforsayingthatwhethersuchanintentionwillbefound
dependsonallofthesurroundingfactsandcircumstances.Thatis,however,simply
anotherwayofsayingthatitmayattimesbedifficulttoproveanincriminating
fact....Legalconsequencesoftenturnonsubjectiveintent,anddecidingwhetherthe
requisiteintentwaspresentalmostalwaysturnsonananalysisofthesurroundingfacts
andcircumstances.Forexample,manycriminallawsrequireproofofamentalstate
that,intheabstract,soundsquitevague.See,e.g.,21U.S.C.841(a)(1)(proscribing
possessionofcontrolledsubstanceswithintenttodistribute);seealsoUnitedStatesv.
Williams,553U.S.285,304306(2008)(rejectingvaguenesschallengetolawproscribing
thepanderingofmaterialinamannerthatreflectsthebelief,orthatisintendedto

-25-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 26 of 34

causeanothertobelievethatitischildpornography).Thisdoesnotmeanthatthose
lawsarevoidforvagueness.SeeWilliams,553U.S.at304(perfectclarityandprecise
guidancehaveneverbeenrequiredevenofregulationsthatrestrictexpressiveactivity
(citationandquotationsomitted)).
Insum,theCourtfindsthatplaintiffsareunlikelytosucceedininvalidatingthe
newruleonvaguenessgrounds.
4.CountIV:ArbitraryandCapricious
Plaintiffsnextchallengethenewruleasarbitraryandcapricious.See5U.S.C.
706(2)(A).Inparticular,plaintiffscontendthatDOLdidnotconsiderallrelevantdata
becausetheagencydidnotconductanyofitsownresearchbeforeadoptingthenew
rule.Instead,DOLreliedontheresearchofthirdparties,andDOLconsidered
approximately9,000commentsontheproposedrule.81Fed.Reg.15,931,15,945,
15,962.
Plaintiffsdonotciteanyauthorityforthepropositionthatagenciesarerequired
toconducttheirownresearchratherthanrelyonthirdpartyresearch.Instead,
plaintiffsmerelydisagreewiththeweightthatDOLchosetogivetothirdparty
research.TheAPAdoesnotauthorizeaCourttosubstituteitsjudgmentforthatofthe
agency,however.SeeFCCv.FoxTelevisionStations,Inc.,556U.S.502,51314(2009).

-26-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 27 of 34

Plaintiffsarenotlikelytosucceedinestablishingthatthenewruleisarbitraryor
capricious.
5.CountV:Overbroad
Plaintiffsnextchallengeasoverbroadtheannualreportingobligationestablished
bytheLM21.UnliketheLM20,theLM21goesbeyondrequiringdisclosures
concerningpersuaderactivities;itrequiresconsultantstoreportallreceiptsfromall
clientsinconnectionwithalllaborrelationsadviceandservices,regardlessofwhether
theadviceorserviceswereforthepurposeofpersuadingemployees.Inotherwords,if
aconsultantengagesinpersuaderactivitiesforoneclient,theLM21requiresthe
consultanttoreportonallclientsforwhomitprovidedanytypeoflaborrelations
adviceorservicesevenclientsforwhomitdidnotperformanypersuaderactivities.
InDonovanv.RoseLawFirm,768F.2d964(8thCir.1985),theEighthCircuit
rejectedDOLsattempttoenforcecompliancewiththesebroadreportingrequirements,
findingitextraordinarilyunlikelythatCongressintendedconsultantstohaveto
reportactivitiesonbehalfofemployerswhowerenotthemselvesrequiredtomakeany
reportundertheLMRDA.Id.at975.AstheEighthCircuitnoted,however,fourother
circuitshadpreviouslyupheldDOLsbroadviewoftheLM21reportingrequirements.
Id.at967.SofarastheCourtisaware,thiscircuitsplitpersiststothisday.

-27-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 28 of 34

RelyingonRoseLawFirm,plaintiffsarguethat,eveniftheyarerequiredto
complywiththerestofthenewrule,theyshouldnotberequiredtocomplywiththe
expansiveLM21reportingrequirements.TheCourtneednotaddressplaintiffsclaim
atthistime,however.Asnotedabove,DOLhasissuedaSpecialEnforcementPolicy
underwhichitwillnotrequirecompliancewiththoseportionsoftheLM21that
requirereportingofinformationregardingemployersforwhomtheconsultantdidnot
engageinanypersuaderactivity.Asaresult,evenifplaintiffseventuallysucceedon
theirclaim(whichseemslikelyinlightofRoseLawFirm),plaintiffsarenotcurrently
facinganythreatofirreparableharm.
6.CountVI:RegulatoryFlexibilityAct
Finally,plaintiffsallegethatDOLviolatedtheRegulatoryFlexibilityAct
(RFA),5U.S.C.601etseq.TheRFArequiresagenciestoprepareaninitialandthen
afinalregulatoryflexibilityanalysisdescribingtheimpactofaproposedruleonsmall
entities.5U.S.C.603,604.Iftheagencycertifiesthattherulewillnothavea
significantimpactonasubstantialnumberofsmallentities,theagencyneednot
performthisanalysis.5U.S.C.605(b).Asmallentitythatisadverselyaffectedbya
rulemaybringanactionundertheAPAforjudicialreviewoftheagencyscompliance
withtheRFA.5U.S.C.611(a)(1).

-28-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 29 of 34

DOLcertifiedthatthenewrulewillnothaveasignificanteconomicimpactona
substantialnumberofsmallentities.81Fed.Reg.16,015.Plaintiffs(whoallegethat
theyaresmallentitieswithinthemeaningoftheRFA)contendthatDOLscertification
isarbitraryandcapriciousbecauseDOLsfindingconflictswiththepublishedanalysis
ofathirdpartyandbecauseDOLfailedtoaccountforthecostoffilingtheLM21.
TheD.C.CircuitrecentlyexplainedtheinteractionbetweentheAPAsarbitrary
andcapriciousstandardandtheRFA:
TheAPAsarbitraryandcapriciousstandardrequiresthat
agencyrulesbereasonableandreasonablyexplained.
UnderStateFarm,wemustassess,amongotherthings,
whethertheagencydecisionwasbasedonconsiderationof
therelevantfactors.MotorVehicleMfrs.Assn,Inc.v.State
FarmMut.Auto.Ins.Co.,463U.S.29,43,103S.Ct.2856,77L.
Ed.2d443(1983)(internalquotationmarksomitted).The
RegulatoryFlexibilityActmakestheinterestsofsmall
businessesarelevantfactorforcertainrules.Therefore,
theAPAtogetherwiththeRegulatoryFlexibilityActrequire
thatarulesimpactonsmallbusinessesbereasonableand
reasonablyexplained.Aregulatoryflexibilityanalysisis,for
APApurposes,partofanagencysexplanationforitsrule.
SeeSmallRefinerLeadPhaseDownTaskForcev.EPA,705F.2d
506,539(D.C.Cir.1983)(areviewingcourtshouldconsider
theregulatoryflexibilityanalysisaspartofitsoverall
judgmentwhetheraruleisreasonable);seealsoThompsonv.
Clark,741F.2d401,405(D.C.Cir.1984)(Thus,ifdatainthe
regulatoryflexibilityanalysisordataanywhereelseinthe
rulemakingrecorddemonstratesthattheruleconstitutes
suchanunreasonableassessmentofsocialcostsandbenefits
astobearbitraryandcapricious,therulecannotstand.)
(citationomitted).

-29-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 30 of 34

NatlTel.CoopAssnv.FCC,563F.3d536,54041(D.C.Cir.2009).Judicialreviewunder
thisstandardisnarrowandhighlydeferential.Id.at541.
Underthisdeferentialstandard,theCourtcannotfindthatplaintiffsarelikelyto
succeedindemonstratingthattheruleissuchanunreasonableassessmentofsocial
costsandbenefitsastobearbitraryandcapricious....Plaintiffsrelyalmostentirely
onanarticleinwhichtheauthorDianaFurchtgottRoth,theformerchiefeconomistof
DOLcontendsthatthecostofcomplyingwiththenewrulecouldreach$7.5to
$10.6billioninthefirstyearand$4.3to$6.5billionperyearthereafter.
TheCourtisnotinapositiontoengageinadetailedanalysisoftheassumptions
behindtheseconclusions,butsufficeittosaythatmanyofthoseassumptionsseem
problematic.Forexample,FurchtgottRothmakesassumptionsaboutthenumberof
employerswhoreceiveatleast$2,500worthoflegaladvice(apparentlyofanykind)
andthenassumesthateveryoneofthoseemployerswillincurcompliancecostsatan
hourlyrateof$104.33everyyearwhetherornottheyfaceaunionizationdrive.
Assumingthateveryemployerwhoreceivesanykindoflegaladvicewillincur
LMRDAcompliancecostsappearsatoddswiththelimitedscopeoftheLMRDA,which
appliesonlytoemployerswhoengageconsultantstohelppersuadeemployees
regardingtheirunionizationrights.FurchtgottRothalsoassumesthatlawfirmsand
consultingfirmswilleachspendatotalof200hoursfamiliarizingthemselveswith

-30-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 31 of 34

LM20andLM21inthefirstyearand50hoursperyearthereafter.Theseestimates
striketheCourtashighlyinflated.Inshort,theanalysisinthearticledoesnotconvince
theCourtthatplaintiffsarelikelytosucceedinshowingthatDOLsRFAanalysiswas
arbitraryandcapricious.
Finally,totheextentthatplaintiffsarefaultingDOLforfailingtoaccountforthe
costoffilingtheLM21,theirchallengeisprematurebecausetheLM21willbethe
subjectofaseparaterulemaking.81Fed.Reg.16,000;seeNatlTel.CoopAssn,563F.3d
at54142(agencycouldpermissiblypostponeconsiderationofcertaincoststhatwould
beassociatedwithaseparaterulemaking).
C.IrreparableHarm
Plaintiffshaveshownalikelihoodofsuccessononeoftheirclaimsspecifically,
theirclaimthatthenewrulerequiresthereportingofsomeactivitiesthatareexempt
fromdisclosureunder203(c).Plaintiffsonlyclaimofirreparableharm,however,is
thattheywillbeforcedtoguessaboutwhatactivityisrequiredtobereported,withan
incorrectguesscarryingcriminalpenalties.See29U.S.C.439.ButtheCourthas
foundthatplaintiffsareunlikelytosucceedinestablishingthattheruleisvoidfor
vagueness.Moreover,criminalpenaltiesdonotattachunlesstheviolationiswillful,
meaningthatitwascommittedinknowingorrecklessdisregardofthelaw.29U.S.C.
439(a);UnitedStatesv.Briscoe,65F.3d576,587(7thCir.1995).Theexistenceofa

-31-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 32 of 34

scienterrequirementhelpstomitigateanyproblemswithvagueness.Hillv.Colorado,
530U.S.703,732(2000).
Evenifplaintiffshadmadeastrongershowingofvagueness,theyhaveoffered
littleinthewayofevidencethattheyarelikelytosufferirreparableharm.Essentially,
theirevidenceislimitedtoastatementintheircomplaintsupportedbyanaffidavit
attestingthatthestatementistruethattheyintendtocontinueadvisingtheirclientsin
waysthatarelikelytotriggerthereportingrequirement.Compl.36.TheCourt
assumes,forthesakeofargument,thatthisisanassertionthatplaintiffsplantoengage
inactivitiesthatwillhavetobereportedunderthenewruleeventhoughthose
activitiesconstituteadvicethatisexemptedfromdisclosureunder203(c).
Nevertheless,plaintiffshavenotmadeaparticularlycompellingshowingofirreparable
harm.TheyhavenotshownthattheirFirstAmendmentrightswillbeviolated,northat
theywillbeforcedtoviolatetheattorneyclientprivilege,northattheywillbeforcedto
violatetherulesofprofessionalconduct.Theyalsohavenotshownthattheywillhave
toidentifyclientsforwhomtheyhavenotengagedinanypersuaderactivities;DOLhas
suspendedtheenforcementofthatportionoftheLM21.
Atworst,plaintiffsarefacedwiththeprospectoffillingoutsomeformsthatthey
shouldbeexemptfromhavingtofilloutunder203(c).Eventhatharmisuncertain,
however,giventhatplaintiffshavenotdescribedwithanyspecificitytheactivitiesin

-32-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 33 of 34

whichtheyintendtoengage.Inshort,plaintiffsshowingofirreparableharmisboth
minimalandspeculative.
D.BalanceofHarmsandthePublicInterest
Thereisinherentharminenjoininganagencyfromenforcingaregulationthat
hasbeenpromulgatedpursuanttoauthoritydelegatedfromCongress.Althoughthe
Courthasfoundthatthenewruleislikelyinvalidinsomerespects,plaintiffsminimal
showingofathreatofirreparableharmisnotsufficienttowarranttheextraordinary
reliefofapreliminaryinjunction.Thisisespeciallytruebecausetheruleplainlyhas
multiplevalidapplications;asnoted,DOLhasidentifiedthirteentypesofconductto
whichtheruleapplies,onlysomeofwhichseemtorequirethereportingofadvicethat
isexemptunder203(c).Anorderstayingenforcementoftheentirerulewould
thereforepreventDOLfromrequiringdisclosureofinformationthatithastheright
(indeed,astatutorymandate)toobtain.
Underthecircumstanceswhenplaintiffshavelaunchedafacialchallengetoa
newregulation,whenitappearsthattheregulationspotentiallyvalidapplicationsmay
outnumberitspotentiallyinvalidones,andwhenthereisonlyaminimalthreatof
irreparableharmtheCourtconcludesthatitispreferabletolettheregulationtake
effectandleaveplaintiffstoraisetheirargumentsinthecontextofactualenforcement

-33-

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 34 of 34

actions.TheCourtthereforedeniesplaintiffsmotionforapreliminaryinjunctionor
stay.
ORDER
Basedontheforegoing,andonallofthefiles,records,andproceedingsherein,
ITISHEREBYORDEREDTHATplaintiffsmotionforatemporaryrestrainingorder,
or,inthealternative,forapreliminaryinjunctionorstay[ECFNo.13]isDENIED.
LETJUDGMENTBEENTEREDACCORDINGLY.
Dated:June22,2016

s/PatrickJ.Schiltz
PatrickJ.Schiltz
UnitedStatesDistrictJudge

-34-