The National Retail Federation (NRF) welcomed a permanent injunction issued today by a federal judge declaring the Labor Department’s “persuader rule,” limiting employers’ use of outside legal counsel or consultants to fight union organizing to be unlawful. The regulations would have dramatically expanded employers’ disclosure requirements for any communications that could even indirectly persuade workers regarding collective bargaining.

“The court rightly came down on the side of protecting free speech and attorney-client privilege,” NRF Senior Vice President of Government Relations David French said. “Smaller retailers would have been the first to suffer from the chilling effect the persuader rules would have had on simple legal advice regarding collective bargaining issues. Retailers are pleased that the courts have put a stop to this unnecessary and harmful overreach of power by the Labor Department.”

NRF and other business groups expressed concern that the rules would discourage employers from seeking advice of counsel in a broad swath of areas that had nothing to do with traditional “persuader” activities. U.S. District Judge Sam R. Cummings agreed, saying some law firms had already decided to refuse to provide advice that they feared might trigger reporting requirements to the federal government under the new standards.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries.