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Wednesday, February 26, 2020

Attorneys for plaintiffs in lawsuit brought over DOL ‘persuader rule’ seek nearly $480,000 in fees

By Jessica Karmasek | Dec 5, 2016


LUBBOCK, Texas (Legal Newsline) - Attorneys for the plaintiffs in a lawsuit brought against the U.S. Department of Labor over its so-called “persuader rule” are seeking nearly $480,000 in attorneys’ fees, more than $5,700 in expenses and $12,000 in costs, according to a recent filing with a Texas federal court.

Attorneys for plaintiffs National Federation of Independent Business, Texas Association of Business, Lubbock Chamber of Commerce, National Association of Home Builders and Texas Association of Builders asked the court in a Nov. 30 filing to order the defendants -- U.S. Secretary of Labor Thomas Perez; Michael Hayes, director of the Office of Labor-Management Standards; and the Labor Department -- to pay $479,834.50 in attorneys’ fees, $5,727.31 in expenses and $12,133.69 in costs.

On Nov. 16, Senior Judge Sam R. Cummings for the U.S. District Court for the Northern District of Texas issued a nationwide permanent injunction against the DOL’s persuader rule, preventing its implementation.

The persuader rule, or Persuader Advice Exemption Rule, was meant to effectively eliminate the “advice exemption” under the Labor-Management Reporting Disclosure Act, or LMRDA.

Basically, LMRDA requires employers to report each time they engage a consultant to persuade employees on how to use their collective bargaining rights.

Employers and consultants tend to engage in persuader activities during union campaigns to persuade employees not to unionize.

The new rule would have required that employers and the consultants they hire file reports not only for direct persuader activities -- i.e. consultants talking to workers -- but also for indirect persuader activities -- consultants scripting what managers and supervisors say to workers.

On the same day he issued his order striking down the rule, Cummings ordered the parties to submit additional briefing regarding the prevailing parties’ entitlement, if any, to attorneys’ fees and costs.

Houston law firm Ogletree Deakins Nash Smoak & Steward PC, Lubbock firm Bustos Law Firm PC and El Paso firm Kemp Smith LLP filed a 16-page motion in response.

The firms are hoping to recover a maximum of $479,834.50 in fees, but said in their motion they also would accept $323,442.63 or $222,645, depending on the rate used by the court.

The attorneys argue in their motion that the Equal Access to Justice Act, or EAJA, authorizes the award of attorneys’ fees and expenses in a successful lawsuit against a federal agency.

According to their filing, the plaintiffs, at the time the lawsuit was filed, each had a net worth not exceeding $7 million and did not have more than 500 employees.

Accordingly, each is a “party” under the EAJA, eligible to recover its attorneys’ fees and other expenses, the plaintiffs’ firms wrote.

The firms also noted that because at least one plaintiff meets the criteria for an award of attorneys’ fees, there shall be no reduction in fees merely because two of the plaintiffs did not. All claims were prosecuted on behalf of all plaintiffs jointly and severally.

The attorneys also requested that the court “exercise its discretion” to approve an increase from the statutory rate of $125 per hour under the EAJA to $300 per hour, to account for an increase in the cost of living and “special factors.”

The EAJA statutory rate of $125, they noted, was adopted in 1996 and thus fails to reflect two decades of increased costs of living as measured by the DOL’s own Consumer Price Index.

Finding qualified attorneys for the proceedings also justifies a higher fee under the express language of the EAJA, the firms argue.

“The record in this case demonstrated the virtual absence of attorneys in the Lubbock, Texas, area who have experience handling proceedings under the National Labor Relations Act and familiarity with the National Labor Relations Board’s detailed new procedures under its accelerated election rules,” the plaintiffs attorneys wrote.

The firms contend the litigation also required “substantial resources” to undertake a case involving complex issues under the U.S. Constitution, attorney’s ethics requirements and administrative law, not to mention the short timeframe involved.

“Considering these additional factors, Plaintiffs’ counsel’s reimbursable rates should be enhanced to a maximum rate of $300 per hour,” they wrote. “Even with such an enhancement, Plaintiffs’ counsel will continue to bear a significant portion of the burden for bringing this case in the public interest.”

Some of the attorneys involved, as noted in the filing, maintain current standard hourly rates of $400 to $600.

Various state attorneys general, who intervened in the case, filed a separate motion regarding fees and costs; however, they are not seeking reimbursement for billable attorney hours at this time.

According to their four-page motion, also filed Nov. 30, the attorneys general of Alabama, Arkansas, Indiana, Michigan, Oklahoma, South Carolina, Texas, Utah, West Virginia and Wisconsin said they reserve the right to request compensation for such expenses, if necessary, at a later time.

“At present, Intervenors seek reimbursement only for their out-of-pocket expenses incurred in connection with their participation in the June 20, 2016 evidentiary hearing on Plaintiffs’ and Intervenors’ motions for preliminary injunction,” they wrote, noting the expenses total $3,457.25.

Cummings allowed the states to join the lawsuit, National Federation of Independent Business v. Perez, in May.

The attorneys general said they believed the rule would place undue burdens on small businesses, which would be singled out under the rule.

The defendants must submit their response with the federal court no later than Wednesday. Cummings said no reply will be considered and no extensions will be granted.

From Legal Newsline: Reach Jessica Karmasek by email at

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Organizations in this Story

National Federation of Independent BusinessU.S. Department of LaborU.S. District Court for the Northern District of Texas Lubbock Division