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The National Labor Relations Board has postponed its employee rights posting rule pending the resolution of court cases denying the agency's authority to issue and enforce the posting requirement. In an appeals court decision on May 7, 2013, the posting requirement is vacated because it violates employers’ free speech rights. On June 14, 2013, another appeals court invalidated the posting requirement, stating that the NLRB exceeded its authority.
Following a flurry of legal activity, the National Labor Relations Board’s (NLRB) requirement that employers display a notice of employee union rights in the workplace was first postponed and then thrown out. On April 17, 2012, the NLRB announced the postponement “until the legal issues are resolved,” after the D.C. Circuit Court of Appeals barred the agency from enforcing the requirement. Lower court decisions prohibiting the enforcement of the rule and rejecting the NRLB's authority to issue the requirement altogether contributed to the postponement decision.
Update: On June 14, 2013, a federal appeals court invalidated the posting requirement, stating that the NLRB exceeded its authority by issuing the rule. On May 7, 2013, a different appeals court had vacated the posting requirement because its enforcement violates employers’ free speech rights. (See discussion below.)
Brief History of the Posting Requirement
Previous to the postponement, a majority of employers were required to appropriately display a notice of employee rights under the National Labor Relations Act (NLRA) by April 30, 2012. The April 30 posting deadline was the NRLB's second postponement of the original effective date of the rule, which was November 14, 2011. The notice, required by the NLRB--the federal agency that investigates and resolves complaints under the NLRA--sets out the rights of employees as they relate to protected union activities, such as organizing and collectively bargaining with their employers as well as engaging in or refraining from other protected activities. The notice also includes information about employer and union obligations and prohibited behavior under the NLRA. Failure to post the notice is treated as an unfair labor practice under the NLRA.
The NLRB doesn't initiate enforcement action on its own, but it does investigate allegations of unfair labor practices made by employees, unions, employers or other persons. Therefore, the NLRB's authority to create or enforce a rule requiring the posting of a notice in the workplace is the subject of much controversy among employers, employees and unions, resulting in challenges filed in court.
The Courts Rule
In a challenge to the posting rule in the federal district court in South Carolina, the court invalidated the posting requirement in a summary judgment decision. The court’s basis for its ruling in Chamber of Commerce of the United States v NLRB on April 13, 2012, is that the NLRB exceeded its authority granted by Congress by dictating employer conduct rather than serving its reactive role.
Rejecting the NLRB's assertion that the posting rule is necessary to carry out NLRA provisions, the court held that Congress affirmatively chose to exclude a notice or posting requirement under the NRLA, therefore there's no provision to enforce through a rule.
In an earlier partial victory for the NLRB, on March 2, 2012, the federal district court for the District of Columbia in National Association of Manufacturers v NLRB, upheld the agency’s authority to issue the posting requirement. However, the court took the teeth out of the NLRB’s requirement by ruling that the agency lacked the authority under the NLRA to enforce its posting rule. The court struck down the enforcement piece of the rule that makes failing to post the notice an unfair labor practice.
The National Association of Manufacturers is appealing the district court’s decision.
Update: On May 7, 2013, the U.S. Court of Appeals for the DC Circuit dealt a blow to the NLRB when it decided in the plaintiff’s favor in National Association of Manufacturers v NLRB and vacated the posting requirement based on a violation of free speech.
The court held that the NLRA contains a free speech provision that prohibits the NLRB from charging employers with an unfair labor practice for not complying with the posting requirement. To allow the NLRB to make noncompliance an unfair labor practice violates the free speech provision by forcing employers to “speak” by displaying the notice—the right not to speak is protected as free speech. Therefore, because enforcement cannot be legally compelled, the court vacated the rule.
The NLRB Strikes Back
The NLRB filed an appeal on June 15, 2012, to reverse the decision in the South Carolina case denying the agency's authority to create the posting requirement.
"We continue to believe that requiring employers to post this notice is well within the Board's authority, and that it provides a genuine service to employees who may not otherwise know their rights under our law," NLRB Chairman Mark Gaston Pearce said of the court decisions.
Update: On June 14, 2013, the Fourth Circuit denied the NLRB's appeal to reverse the decision in the South Carolina case. The court of appeals invalidated the posting requirement, stating that the NLRB exceeded its authority by issuing the posting rule.
Why This Issue Matters to Employers
Employers are governed by a plethora of federal (and state) labor laws including many requiring them to inform employees of their rights through posting requirements. The federal district court in South Carolina decision is particularly important in that it effectively prohibits the NLRB from future rulemaking activity dictating employer conduct and cements the agency’s role as a purely reactive one. The court held that the NLRB’s role is to step in after the filing of an unfair labor practice charge: "There is not a single trace of statutory text that indicates Congress intended for the Board to proactively regulate employers in this manner."
What if the court’s ruling is overturned? A reversal could clear the path for future proactive requirements to be imposed on employers by an agency formerly held to an enforcement role.
Due to the controversy and court rulings regarding this issue, the ultimate decision could very well end up in the U.S. Supreme Court’s hands. Stay tuned!