The federal courts have dealt the NLRB’s notice posting rule another setback. In a ruling Tuesday, the court of appeals in Washington, D.C., the same court that earlier this year held President Obama’s recess appointments to the NLRB unconstitutional, vacated the NLRB’s notice posting rule. The court concluded that the rule violated an employer’s right to freedom of speech.

For those readers who may have forgotten what the controversy is about, a brief refresher. In 2011, just before former Chairman Liebman’s (D) term was to expire, the NLRB approved, by a vote of 3-1, a rule that required employers covered by the NLRA to post a notice in the workplace advising employees of various rights. Never before in the history of the NLRB has such a notice been required, and no provision of the NLRA explicitly requires a notice posting. 

The final rule enforced the notice posting requirement using three different remedies. First, it declared that an employer’s failure to post the notice would be an unfair labor practice. Second, it provided that the failure to post the notice could be used as evidence of an employer’s anti-union motivation. Finally, it purported to suspend the running of the applicable statute of limitations for filing an unfair labor practice charge for the period of time during which the notice was not posted. 

District courts in Washington, D.C. and South Carolina came to differing conclusions on the validity of the rule.

The court of appeals, in a unanimous 3-0 decision (pdf), found the NLRB’s notice posting rule violated an employer’s right to freedom of speech. The NLRA contains a provision, known as Section 8(c), that guarantees the right to express and disseminate views, arguments and opinions about unions so long as such expression contains no threat of reprisal or force, or promise of any benefit.

Relying upon Supreme Court precedent interpreting the First Amendment, the court held that the first two remedies in the NLRB’s regulation violated Section 8(c). Although this section “precludes the [NLRB] from finding noncoercive speech to be an unfair labor practice, or evidence of an unfair labor practice, the [NLRB’s] rule does both.” The notice posting rule required the employer to speak on the issue of unions, and purported to control the content of that message, under the threat of an unfair labor practice charge, in contravention of the right to freedom of speech contained in the NLRA.

The court found that the third remedy for failing to post the notice was also invalid. Tolling of the statute of limitations was not permissible because the NLRB failed to demonstrate that Congress intended such an exception when it adopted the NLRA over 60 years ago. Because all three enforcement tools were invalid, and because the notice requirement could not be separated from these remedies, the entire notice requirement was struck down.

Two of the three judges on the court would have gone even further. In a concurring opinion, these judges explained that the rule was invalid because the NLRB had no statutory authority to issue it.

In an interesting side note, the court also held that the recess appointment of former Member Becker (D), which has since expired, was not permissible under Noel Canning. But, there were still three, Senate-confirmed appointees who voted on the final rule, a majority of those members voted in favor, and all three of them were serving under valid appointments at the time the final rule was filed. Thus, the regulation did not fail for lack of a valid quorum on the NLRB.

For the labor professional, three significant items should be noted:

  • Since the litigation surrounding the rule began, the NLRB has declined to enforce the rule pending conclusion of that litigation. Given the court’s holding that the rule was “vacated,” it would be quite surprising if this position changed. At the time of this post, however, the NLRB has not formally announced its reaction to the ruling.
  • No court has sustained all parts of the NLRB’s rule. The rule has either been invalidated in its entirety, as the Washington, D.C. court of appeals and the district court in South Carolina did, or some of the enforcement provisions have been invalidated, like the district court in Washington, D.C. did. Thus, the rule doesn’t have a good track record so far.
  • The decision in the South Carolina case is still on appeal to a different court of appeals. Assuming the NLRB continues to fight for its rule, this ruling should come later this year. If that ruling comes out differently, the likelihood increases that the Supreme Court will ultimately decide this issue.