•  Failure to post the NLRB Notice will NOT be an unfair labor practice.
• Failure to post the NLRB Notice will not toll the six-month statute of limitations for filing an unfair labor practice charge.

In a decision issued March 2, 2012, by United States District Court Judge Amy Berman Jackson, the District Court for the District of Columbia struck down the two principal remedy provisions of the National Labor Relations Board (NLRB or Board)’s posting requirement:

• That the failure of an employer to post the required notice will be found to be a violation of Section 8(a)(1) of the National Labor Relations Act.
• That the Board may excuse an individual from the six-month statute of limitations if the employer failed to post the required notice.

However, simultaneously, the court upheld the regulatory authority of the NLRB to require employers to post the notice.

The notice posting requirement is currently scheduled to take effect on April 30, 2012.

On September 10, 2011, the National Association of Manufacturers (NAM) commenced action against the NLRB contending that under the Administrative Procedure Act, the Board exceeded its authority in promulgating the final rule titled “Notification of Employee Rights Under the National Labor Relations Act.”  The NAM also claimed that the final rule violated the First Amendment.  The National Right to Work Legal Defense and Education Foundation similarly challenged this rule in the same court.  The D.C. District Court consolidated those two actions.  After considering written and oral argument on the issues, the court decided the case on summary judgment.

The court concluded that it could NOT find “that in enacting the NLRA, Congress unambiguously intended to preclude the Board from promulgating a rule that requires employers to post a notice informing employees of their rights under the Act.”  Similarly, the court declined to find the Board’s promulgation of the notice posting requirement to be arbitrary and capricious. The court also refused to overturn the notice posting rule on First Amendment grounds.  As a result, employers will still need to post the NLRB notice by April 30, 2012, unless:

•  The NLRB votes to delay implementation for a third time; or
• The U.S. Chamber of Commerce succeeds in its action against the NLRB over this requirement pending in the District Court of South Carolina; or
• The D.C. Circuit Court reverses that part of the decision prior to April 30, 2012.

The burden of this posting requirement is now lessened by the court striking down the two most significant remedial provisions of this rule.

Failure to Post Not an Unfair Labor Practice

The D.C. District Court ruled that the NLRB lacked the authority to deem a failure to post the required notice to be an unfair labor practice under the act.  The court found that the unfair labor practice provision of the rule, Section 104.210, is expressly limited by NLRA Sections 158(a) and 160(a), in which Congress specifically defined and limited the conduct that could constitute an unfair labor practice.  Thus, the court finds that Congress has expressed its unambiguous intent and that the Board exceeded its authority under the NLRA when it promulgated a rule that labels any failure to post the required notice to be an unfair labor practice.

Failure to Post Does Not Toll Six-Month Statute of Limitations

The court further ruled that the NLRA does not authorize the Board to enact a rule which permits it to toll the statute of limitations in any future unfair labor practice action involving a job site where the notice was not posted.  The challenged provision, Section 104.214(a) states:

When an employee files an unfair labor practice charge, the Board may find it appropriate to excuse the employee from the requirement that charges be filed within six months after the occurrence of the allegedly unlawful conduct if the employer has failed to post the required employee notice unless the employee has received actual or constructive notice that the conduct complained of is unlawful.

This section would not only extend the statute of limitations for unfair labor practice charge over a failure to post the notice, it would also apply to all unfair labor practice charges against the employer at the location where the notice was not posted.  The court concluded that Congress did not leave a gap for the agency to fill with respect to the statute of limitations. Instead, Congress plainly mandated a short time period during which an aggrieved person must file a charge. 29 U.S.C. § 160(b).  As congress left no ambiguity as to the appropriate statute of limitations under Section 160(b), the Board exceeded its statutory authority in adopting this remedy.

Rule History

This decision marks the latest development in the short, but eventful, history of this rule.  We originally alerted clients to the NLRB’s new posting requirement on September 2, 2011.  That alert, 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, we provided access to the form notice issued by the NLRB.  On November 11, 2011, we sent an update that due to a pending legal challenge (one of which was the case decided today) to the posting requirement, the NLRB had delayed the requirement to January 31, 2012.  More recently, because of the still-pending legal challenge, the NLRB has again delayed the compliance date, to April 30, 2012.

What to Expect Next

The NLRB has not yet issued a statement on this decision, but it will be no surprise if the Board appeals this decision.  Pending such an appeal, the NLRB may delay the implementation of the rule for a third time based upon the same reasoning it used to justify the deadline extension announced on October 5, 2011.

The U.S. Chamber of Commerce and NLRB both have motions for summary judgment pending in the District Court of South Carolina over the Chamber’s challenge to this Rule.  This decision on the NAM challenge may pave the way for a decision in the Chamber’s challenge.

Republicans in Congress, particularly Representative Darryl Issa of California, will renew their claims that the NLRB, as currently comprised, is acting well beyond its authority in a biased, partisan manner.  Unions, which are looking forward to new election rules taking effect on April 30, 2012, will rally to support the NLRB’s appeal of this decision.

Conclusion

The impact on employers is more uncertainty, as the future of this rule may be affected by so many different authorities.  Employers must remain vigilant to the ever-changing provisions of this rule and make preparations for union organizing efforts that are sure to increase on May 1, 2012. Once the rule takes effect, employers should anticipate years of litigation over its interpretation. While the failure to post the notice may not be an unfair labor practice in itself, expect the NLRB to find that the failure to post the required notice is evidence of anti-union animus. Similarly, although the section of the rule automatically tolling the six-month statute of limitations may have been struck down, do not be surprised to find the Board ruling that there has been an equitable tolling of the statute of limitations in cases where the charging party shows lack of knowledge of rights under the NLRA.

We will continue to monitor the progress of these legal challenges along with all other developments associated with this NLRB rule.

If you have questions about this new rule or about implementing preventative measures in your business to avoid unfair labor practice charges, please contact Sean P. Beiter (716.566.5409; sbeiter@goldbergsegalla.com), Julie P. Apter (716.566.5458; japter@goldbergsegalla.com), Richard A. Braden (716.566.5436; rbraden@goldbergsegalla.com); Seth L. Laver (267.519.6877; slaver@goldbergsegalla.com), Philip H. McIntyre (716.844.3422; pmcintyre@goldbergsegalla.com)  Matthew C. Van Vessem (716.566.5476; mvanvessem@goldbergsegalla.com), or another member of the Goldberg Segalla Labor and Employment Practice Group.