On August 25, the National Labor Relations Board (NLRB or Board) announced that all private sector employers subject to the National Labor Relations Act (Act)—even those employers without unionized workforces—must post a notice informing employees of their rights under the Act.

Specifically, the notice informs employees that they have the right to act together to improve wages and working conditions; to form, join and assist a union; to bargain collectively with their employer; and to refrain from any of these activities.  It also provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints.

The Board will provide free copies of the notice and it must be posted where other workplace notices are typically posted.  In addition, an employer that usually posts notices regarding employee policies on a company internet or intranet site must post the notice on those sites as well.  Moreover, where 20 percent or more of the workforce is not proficient in English, the employer must provide a copy of the notice in the language the employees speak.

Failure to comply with the posting rule is considered an unfair labor practice and will result in an order from the NLRB to cease and desist from failing to post the notice and an order to post the notice.  Furthermore, the Board may extend the Act’s six-month statute of limitations for filing an unfair labor practice charge involving independent unfair labor practices against the employer due to its failure to post the notice.  In addition, the Board may consider a knowing and willful refusal to comply with the posting requirement as evidence of unlawful motive in a case in which motive is an issue.

The notice rule may seem innocuous, but it has far-reaching consequences that are not explained in the notice.  For example, the notice does not explain the costs associated with unionization, such as dues and the possibility of loss of income through strikes.  Furthermore, once a union is selected by the employees the union enjoys a presumption that the employees support it for at least a year, and if the employer and union agree to a labor contract the union’s support by the employees cannot be challenged until that contract expires or three years, which ever is sooner.  Thus, ending the union relationship can be extremely difficult and employees must be fully informed before any decision is made about unionization.

The notice is currently being challenged in federal courts on the basis that the NLRB exceeded its authority in creating the notice and requiring its posting.  The lawsuit has some “legs”, in my view, in that the NLRB has declared that a failure to post will be an unfair labor practice.  While the NLRB has not created a new section of the Act, it is declaring what it views will be an unfair labor practice without any defense.  It strips employers of basic due process rights and I feel the Courts will frown upon that.  Additionally, the NLRB has equated a knowing and willful refusal to post as evidence of unlawful motive.  This “evidence” has the potential to lead to a finding of unlawful motive, which can significantly affect an employer’s defense to an unfair labor practice charge.

Franchisors and franchises have a right to be concerned over the implementation of this notice.  The consequences can be alarming, and we expect that the IFA will continue to stay on top of the issue.  Of course, we here at Fox Rothschild are on top of the issue and urge our clients and non-clients to contact us to ensure compliance with this new rule so that any negative consequences can be avoided.