The divergence of opinion between the National Labor Relations Board (NLRB) and the United States Court of Appeals for the District of Columbia Circuit has just widened considerably. Three months after the D.C. Circuit ruled that certain board actions were invalid due to constitutionally invalid appointments by President Barack Obama (Noel Canning v. NLRB), the court, in National Association of Manufacturers v. NLRB, has invalidated a 2012 board rule providing that: 1) any employers subject to the board’s jurisdiction would be liable for an unfair labor practice if they did not post on their properties and on their websites a “Notification of Employee Rights under the National Labor Relations Act;” 2) the failure to post would toll the six-month statute of limitations for filing an unfair labor practice charge; and 3) the board may consider an employer’s knowing and willing refusal to comply with the posting requirement as “evidence of unlawful motive in a case in which motive is an issue.”

The poster rule came under fire almost immediately. Many employers claimed that the required posting is one-sided and favors unionization. For example, the poster mandates a list of rights the employee possessed under the National Labor Relations Act (NLRA) concerning organizing or joining a union, but fails to notify employees of their rights to decertify a union. The National Association of Manufacturers challenged the poster rule in the District Court for the District of Columbia. The district court ruled that the board had the authority to promulgate the posting rule, but invalidated the provision holding that the failure to comply  was a per se unfair labor practice as well as the tolling provision. The district court upheld the portion of the rule which allowed an employer’s failure to post to be evidence of an improper motive, finding the rule to be severable, and upheld the poster requirement, even though the various means of enforcement of the requirement had been struck down.

On appeal, the D.C. Circuit invalidated the poster rule in its entirety. After determining that the board did have a quorum at the time that the regulation was filed with the office of the Federal Register, the court analyzed whether the rule was contrary to Section 8(c) of the act, which provides:

[T]he expressing of any views, argument, or opinion, of the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this [act] if such expression contains no threat of reprisal or force or promise of benefit.

The circuit court found that the provisions of the rule which provided that the failure of an employer to post constituted an unfair labor practice ran afoul of this provision. Borrowing extensively from First Amendment cases, the court noted that free speech operates not only to restrict the government’s ability to interfere with certain speech, but also to prohibit the government from requiring certain types of speech: “The right to disseminate another’s speech necessarily includes the right to decide not to disseminate it.”

Because the rule punished employers for the refusal to engage in board-mandated speech, it violated Section 8(c) of the act. Using similar reasoning, the court also found that the provision of the rule which treated the failure of an employer to post as evidence of anti-union animus was similarly unenforceable. Concerning the remaining mechanism for enforcement of the poster requirement, the tolling provision, the circuit court agreed with the district court that the tolling provision exceeded the authority of the board. The court found that the provision substantially amended the six-month statute of limitations set by Congress in the act, noting that the addition of the statutory time limit in 1947 evidenced no intent to allow tolling in the manner promulgated by the board.

Surprisingly, the D.C. Circuit never reached the issue of whether the board had the authority under the NLRA to promulgate the poster requirement in the first place. Rather, the court held that because all of the enforcement methods by which the board could enforce the requirement were invalid, the poster requirement could not be severed and must be struck down as well. As the court noted: “the board would not have issued a posting rule that depended solely on voluntary compliance.” Thus, the court vacated the posting rule in its entirety.

Judge Karen LeCraft Henderson wrote a concurrence that was joined by Judge Janice Rogers Brown in which she opines that she would have struck down the poster requirement as being outside the authority of the rule making authority conferred by the NLRA.

National Association of Manufacturers represents the most recent in a string of defeats to the NLRB. In the event the NLRB wishes to seek further review, it may seek rehearing by the entire banc of the D.C. Circuit or certiorari review by the U.S. Supreme Court.

This decision marks the latest development in the long and eventful history of this rule.  Goldberg Segalla LLP has followed this issue from the outset: 

• We originally alerted clients to the NLRB’s new posting requirement on September 2, 2011.  That alert, accessible here, contained a thorough discussion of the required poster and which employers are required to post it. At that time, employers were required to begin compliance by November 14, 2011.
• In our September 15, 2011 alert, accessible here, we provided access to the form notice issued by the NLRB.
• On November 11, 2011, we sent an update (accessible here) that due to pending legal challenge to the posting requirement, the NLRB delayed the requirement to January 31, 2012.  The NLRB again delayed the compliance date, to April 30, 2012 due to the still-pending legal challenges.
• On March 2, 2012 we reported on the decision in the ruling of the court below in this case in the District Court of the District of Columbia (available here).
• Again on March 5, 2012, we reported on the reaction to that lower court decision (available here).
• On April 16, 2012, the firm reported on the decision by United States District Court Judge David C. Norton, the District Court for South Carolina, ruling that the National Labor Relations Board (NLRB) lacks the authority to promulgate the notice-posting rule (available here).
• In our April 17, 2012 alert (available here), we reported on the Order issued in National Association of Manufacturers v. NLRB, the U.S. Circuit Court of Appeals for the District of Columbia Circuit issuing an emergency injunction pending court review blocking the April 30, 2012 effective date of the Notification Rule.

For assistance in understanding the current state of the law, contact:

• Sean P. Beiter (716.566.5409; sbeiter@goldbergsegalla.com)
• Caroline J. Berdzik (609.986.1314; cberdzik@goldbergsegalla.com)
• Matthew C. Van Vessem (716.566.5476; mvanvessem@goldbergsegalla.com)
• Or another member of the Goldberg Segalla Labor and Employment Practice Group.