What you need to know:

A federal appellate court has struck down a National Labor Relations Board rule that required employers to post workplace notices informing employees of their rights under the National Labor Relations Act.

What you need to do:

Subject to possible further appeals, employers are now free to disregard the posting rule.  However, employers should note that the court’s decision does not relieve them of the requirement to post other government-mandated notices, such as those mandated by the Department of Labor.   

The Decision

In August 2011 the National Labor Relations Board, an agency that has historically not been active in rulemaking, issued a rule requiring employers to post a notice informing workers of their rights under the National Labor Relations Act.  The decidedly pro-union notice described the rights of workers to, among other things, form a union and bargain collectively for higher wages.  In addition, the notice listed many employer actions prohibited under the Act.  The rule further provided that failure to post the notice would be considered an “unfair labor practice,” would toll the statute of limitations for employee actions under the Act, and could be construed as evidence of improper motive by the Board in cases in which motive is an issue. 

Several trade organizations challenged the Board’s authority to issue the rule.  The appeals court has now invalidated the rule in its entirety.  See National Association of Manufacturers v. NLRB.  The court concluded that the posting requirement violated employers’ free speech rights and exceeded the Board’s authority.  The decision is widely seen as a major rebuke to a Board that many view as increasingly aggressive. 

What the Decision Means to Employers

Following the court’s decision, the Board has announced that the rule will not take effect “until the legal issues are resolved.”  Practically speaking, this means that employers need not post the Board notice unless and until further appeals, possibly to the Supreme Court, have been pursued.  More generally, the decision may open the door for employers to challenge other recent Board rules and/or other workplace posting regulations.  It remains to be seen whether the decision will temper the Board’s recent activism.

Employers should not overestimate the scope of the ruling.  Depending on the jurisdiction in which an employer does business and the size of its workforce, employers must still post a number of workplace notices related to employee rights, very few of which will be placed in question by the court’s decision.