United States: D.C. Circuit Court Vacates The NLRB's Notice Posting Rule

On May 7, 2013, the U.S. Court of Appeals for the District of Columbia Circuit held in National Association of Manufacturers, et al. v. National Labor Relations Board, et al., No. 12-5068, that the National Labor Relations Board's (NLRB) August 2011 rule requiring most private-sector employers to post notices of worker rights violated the free-speech rights of employers under federal labor law—and is therefore invalid.

Background and Procedural History

The NLRB issued a rule in 2011 requiring all employers subject to the Board's jurisdiction to post a notice in the workplace and on their websites informing employees of their rights under federal labor law, including the right to join unions and engage in other forms of concerted activity. (Unsurprisingly, the NLRB did not issue a rule requiring that unions post any notice advising employees of their legal rights with respect to unions.) The NLRB invoked Section 6 of the National Labor Relations Act (NLRA) as authority for the notice posting rule.

As an enforcement mechanism, the rule provides that an employer's failure to post the notice is an "unfair labor practice"—that is, merely failing to post the notice may be found to interfere with, restrain or coerce employees in the exercise of their rights under the NLRA, in violation of Section 8(a)(1) of the NLRA.

The rule contains two additional enforcement devices: The NLRB may suspend the running of the six-month limitations period for filing any unfair labor practice charges, and the NLRB may consider an employer's knowing and willful failure to post the notice as evidence of unlawful motive in unfair labor practice cases.

Several employer associations challenged the notice posting rule by filing a lawsuit in federal court in the District of Columbia. The District Court issued a ruling invalidating certain aspects of the notice posting rule, but upholding other aspects of the rule. Both the employer associations and the NLRB appealed the District Court's ruling to the U.S. Court of Appeals for the District of Columbia Circuit.

U.S. Court of Appeals for the District of Columbia Circuit

Although the parties devoted large parts of their briefs to the question of whether Section 6 of the NLRA gives the NLRB authority to promulgate the notice posting rule, the court focused its analysis on Section 8(c) of the NLRA, which states that the expression or dissemination of any views cannot constitute an unfair labor practice provided that the expression contains no threat of reprisal or force or promise of benefit.

Writing for the court, Senior Circuit Judge Randolph opined that Section 8(c) of the NLRA "precludes the Board from finding noncoercive employer speech to be an unfair labor practice, or evidence of an unfair labor practice." Judge Randolph further opined that requiring employers to post an NLRB statement of employee rights "does both."

Analogizing Section 8(c) of the NLRA to the First Amendment, Judge Randolph concluded that: "Like the freedom of speech guaranteed in the First Amendment, § 8(c) necessarily protects . . . the right of employers (and unions) not to speak."

Accordingly, the court concluded that the NLRB's notice posting rule violates Section 8(c) because the rule makes an employer's failure to post the notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus.

The court also rejected the Board's alternate method of enforcing the notice posting rule—namely, the tolling provision. Judge Randolph concluded that the NLRB failed to show that Congress had intended to allow such tolling when it enacted in 1947 the six-month limitation on the filing of unfair labor practice charges.

Because the court determined that all of the means for enforcing the Board's notice posting requirement were invalid, it refrained from deciding whether the Board lacked the regulatory authority to require employers to post the notice in the first place. The court determined, however, that since the NLRB's requirement for the notice posting was not severable from its invalid enforcement provisions, it "must therefore fall along with the rest of the Board's posting rule."

In the concurring opinion, Judges Henderson and Brown held that the Board does not have authority to promulgate the posting rule under Section 6 of the NLRA.

What This Decision Means for Employers

The NLRB in 2011 suspended enforcement of the notice posting rule because of legal challenges. A federal court in South Carolina previously held that the NLRB lacked the authority to promulgate the rule. The appeal in that case is currently pending before the Fourth Circuit Court of Appeals.

The D.C. Circuit's ruling can be viewed as a triumph for employers. However, more litigation can be anticipated. For now, and for the foreseeable future, there is no obligation on the part of employers to post the notice.

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

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