Once again, federal courts have halted efforts by the current National Labor Relations Board ("the Board") to expand its regulatory reach. Earlier this week, in National Association of Manufacturers v. NLRB, the Court of Appeals for the District of Columbia Circuit struck down the Board’s controversial attempt to require virtually all employers to post a notice advising employees about the requirements of the National Labor Relations Act ("the Act") and the sixty years of interpretations of the federal labor laws.
The Board’s notice-posting rule has had a long and contentious history. The original petition was filed in 1993, but it was not until 2010 when the Board, by then with a majority of members appointed by President Obama, issued a proposed rule. The final rule was published in August, 2011, and litigation challenging the Board’s authority began almost immediately. As we have reported before, the Board had only mixed success. One district court upheld the rule only in part, and another struck down the rule completely. While those cases were on appeal, the posting requirement was stayed pending completion of judicial review.
In this week's opinion the D.C. Circuit court rejected the rule in its entirety. The unanimous ruling concluded that the rule interfered with employers’ free speech rights, by requiring them to offer a Board-mandated message with which they might not agree. Section 8(c) of the Act bars the Board from considering non-coercive employer speech as evidence of an unfair labor practice, but the Board’s rule would treat the failure to post its notice as an unfair labor practice.
Two of the panel’s three judges would have gone further, specifically rejecting the claim that the notice posting rule – never required in the previous sixty-four years of the Act – was authorized by Section 6 of the Act, which permits the Board to carry out the Act. The court readily concluded that while the notice-posting rule may be seen as “prophylactic,” there was nothing about it that was necessary to carry out the Act’s substantive provisions.
The Board has not yet reacted to this defeat, and what its next steps are remain unclear. Given the breadth of the Circuit court’s ruling, it appears doubtful that the Board could revise its rule to comply with the court’s analysis. Equally unknown is whether the Board will seek review by the United States Supreme Court.
For employers, at least one reaction does seem clear: it is unlikely that employers will be required to post the NLRB’s notice any time soon, if ever. The court vacated the rule, so rule is simply without effect unless the court’s decision is reversed. (Federal contractors should remember, however, that they face an independent obligation to post a similar notice, as we reported. That obligation remains in full force. Moreover, the implications of the court’s opinion are potentially far-reaching, and the court’s analysis may call into question numerous posting requirements under other federal statutes.