DOL Now 3-0 in Court Challenges to Fiduciary Rule

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jo-el J. Meyer

The Labor Department’s fiduciary rule has had quite a week, and the debate over the controversial rule that requires financial advisers to put their clients’ best interest first is only getting started.

A federal judge in Texas late Feb. 8 upheld the rule, ruling in favor of the DOL and against groups such as the U.S. Chamber of Commerce who challenged numerous aspects of the rule ( U.S. Chamber of Commerce v. Hugler , N.D. Tex., No. 3:16-cv-1476-M, 2/8/17 ).

The Department of Labor is now 3-0 in defending the rule in court. Late last year, federal judges in Washington, D.C., and Kansas upheld the rule.

The latest ruling comes just days after President Donald Trump issued a presidential memorandum instructing the DOL to review the rule. Although the White House floated a draft memorandum indicating that it would be delaying the rule, which is scheduled to be implemented April 10, the final memorandum didn’t delay it but only ordered review of the rule. There’s been speculation that the Labor Department may soon officially delay the rule to allow it to conduct the review.

Judge Barbara M.G. Lynn took note of the presidential memorandum in a footnote of her decision. She said the presidential memorandum and the DOL’s response that it will be considering its legal options for delaying the rule didn’t moot the U.S. Chamber of Commerce’s lawsuit.

To contact the reporter on this story: Jo-el J. Meyer in Washington at

To contact the editor responsible for this story: Karen Ertel at

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