On May 7, 2013, a federal appellate court in Washington, D.C., struck down the National Labor Relations Board's (NLRB or Board) requirement that employers subject to its jurisdiction post on their properties and websites a notice advising employees of their rights under the National Labor Relations Act (NLRA). The decision, entitled National Ass'n of Mfrs. v. N.L.R.B., --- F.3d ---, 2013 WL 1876234 (C.A.D.C. May 7, 2013), is a significant decision for employers because it explicitly recognizes the limits on the NLRB's powers and authority, as well as employers' rights in expressing opinions on unionization in the workplace.
The NLRB's rule, originally slated to go into effect in November 2011, required a significant majority of employers to "post notices to employees, in conspicuous places, informing them of their NLRA rights, together with Board contact information and information concerning basic enforcement procedures, in the language set forth in the Appendix to Subpart A of this part." 29 C.F.R. § 104.202(a). Employers that customarily communicate with their employees electronically were also required to publish the notice on their intranet or Internet sites. Generally, the poster informed employees of their right to form, join or assist a union; to bargain collectively through representatives of their choosing; to discuss wages, benefits and other terms and conditions of employment with fellow employees or a union; to take action to improve working conditions; to strike and picket; or to choose not to engage in any of those activities. See 29 C.F.R. § pt. 104, subpt. A, app.
The regulation declared that an employer's failure to post the notice was an unfair labor practice, meaning that it violated Section 7 of the NLRA. The regulation also stated that the NLRB could toll the running of the statute of limitations period for an employee filing an unfair labor practice charge if the notice was not properly posted. In addition, where an employer was aware of the rule but failed to post the notice, the NLRB could find that the employer engaged in knowing and willful behavior for the purpose of adjudicating an unlawful labor practice charge under the NLRA.
Given the requirement's broad and severe implications to employers, it is no surprise that the rule's validity was challenged in two federal court actions -- one filed in South Carolina and the other filed in the District of Columbia. In the South Carolina-based action, the court concluded that the NLRB did not have the authority to promulgate the rule and was, in its entirety, unlawful. (Executive Alert 4/16/12). That decision was appealed and is currently before the Fourth Circuit Court of Appeals. Meanwhile, the DC court decided that, although the NLRB had authority to issue the rule and that, generally, it was lawful, the Board did not have the authority to issue regulations tolling the statute of limitations or making a blanket determination that a failure to post always constituted an unfair labor practice. That decision was appealed to the DC Circuit, which enjoined enforcement of the regulation pending its decision. (Executive Alert 4/17/12).
THE DC CIRCUIT'S DECISION
Writing the decision for a three-judge panel, Senior Circuit Judge A. Raymond Randolph determined that the posting requirement and the NLRB's stated enforcement mechanisms were in violation of the NLRA and, therefore, invalid. To start, the court analyzed Section 8(c) of the NLRA, which states what an employer can and cannot express concerning an employee's NLRA rights. Section 8(c) states:
The expressing of any views, argument, or opinion, or 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.
Recognizing that Section 8(c) of the NLRA precludes the NLRB from finding noncoercive employer speech to be an unfair labor practice, or evidence of an unfair labor practice, the Court concluded that the NLRB's poster rule did both. Moreover, the court concluded that, since Section 8(c) prevents the NLRB from charging an employer with an unfair labor practice for posting a notice advising employees of their right not to join a union, it cannot be an unfair labor practice for an employer to refuse to post a government notice information employees of their right to unionize (or to refuse to unionize). In essence, Section 8(c) protects the right of employers (and unions alike) not to speak about unionization rights, and the NLRB cannot require an employer to speak about those rights on the NLRB's behalf or otherwise. Thus, the court held that the NLRB's mandatory posting rule was invalid and that an employer's failure to post the notice could not be treated as an unfair labor practice or evidence of the same.
The court also concluded that the NLRB's regulation requiring mandatory tolling of the statute of limitations on the filing of unfair labor practice charges where an employer fails to post the notice was not within the NLRB's authority and was, therefore, invalid.
Finally, and as another nail in the rule's coffin, the other two judges on the panel stated in a concurring opinion that they also held that the NLRB did not have the authority under the NLRA to promulgate the rule in the first place because it was not "necessary" to carry out the express provisions of the NLRA.
HOW THIS DECISION AFFECTS EMPLOYERS
Although the DC Circuit's decision only affects employers located in the District of Columbia, the Court previously had stayed the implementation of the regulation pending the outcome of the litigation. Thus, this decision does not require any specific action on the part of any covered employers. Still, this decision is important for employers because it significantly checks the NLRB's rule-making authority and enforcement powers under the NLRA. With the push for advancement of union rights and activity under the Obama Administration, decisions like this illustrate that the NLRB's rulemaking in general will not go unnoticed or unrestrained. This is important not only for this posting rule, but also for the future interpretation of federal labor law and the NLRB's enforcement authority concerning the same.
Going forward, the impact and full effect of the DC Circuit's decision remains in flux, as the decision from the Fourth Circuit is still forthcoming. In addition, it is unclear whether the NLRB will seek review of the DC Circuit's decision by the Supreme Court. As a result of this uncertainty, final resolution may not be known for some time. In the meantime, employers should work closely with their labor counsel as to their rights and obligations while clarification of the poster regulation moves its way through the courts.