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A Texas District Court judge granted a permanent injunction against the Labor Department’s new “persuader rule” Wednesday, handing a defeat to the administration on its labor policy agenda.

The rule would have required most attorneys who advise businesses on labor-related issues to reveal all of the financial details of those arrangements. The rule was widely expected to cause many lawyers to abandon providing that service.

Judge Sam Cummings granted the injunction Wednesday, saying he agreed with the reasoning in a July ruling against the department which said the rule was “defective to its core” because it was “far too broad.”

“Today a federal court judge delivered what could be the final nail in the coffin for the controversial persuader rule, which sought to force attorneys and their clients to report in open records the details of their confidential attorney-client relationships, and which would have complicated employers’ efforts to seek legal counsel in opposing and dealing with unions,” said Richard Meneghello, an attorney with the management-side law firm Fisher & Phillips.

The Labor Department’s new rule, announced in February, said that any lawyer who instructs a business on issues related to federal labor law, such as how to respond to a bid to unionize their workers, must publicly report the activity, including the financial details. That is a revision of the prior rule, which said the reporting only had to be done if the lawyers directly spoke to the workers on behalf of management.

The administration said the change was needed for transparency’s sake. Business groups denounced it, arguing it was little more than an attempt to aid union organizing efforts by making it harder for businesses to get legal advice.

A Labor Department spokesman could not be reached Wednesday.

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