The U.S. Court of Appeals for the District of Columbia Circuit has struck down the National Labor Relations Board's poster requirement. In National Association of Manufacturers v. NLRB, the Court ruled this week that the NLRB lacked authority to require employers to post a notice informing employees of certain rights that they have under the National Labor Relations Act.

The poster rule applied to all employers within the NLRB's jurisdiction, which meant most U.S. employers*. According to the rule, failure to post the notice was (1) an unfair labor practice, (2) evidence of anti-union bias in NLRB proceedings, and (3) a basis for tolling of the six-month limitations period for filing unfair labor practice charges.

* Federal contractors were exempted from the NLRB poster rule, but only because they were already required to post a similar notice.

NLRB poster rule: A long and tortuous road

Constangy has extensively covered the tortuous path of the NLRB poster rule here, here, here, and here. The NLRB issued the poster rule in 2011, to take effect in November 2011. However, the effective date was delayed several times by the Board, with the last effective date set for April 30, 2012. But the rule never actually took effect because, in the meantime, federal district courts in the District of Columbia and South Carolina had found the rule invalid. In April 2012, the D.C. Circuit enjoined the rule while it considered the appeal from the D.C. district court decision that resulted in this week's ruling.

(The South Carolina decision is currently on appeal to the U.S. Court of Appeals for the Fourth Circuit, which hears appeals from federal courts in the states of Maryland, North Carolina, South Carolina, Virginia, and West Virginia.)

The D.C. Circuit: Rule violates employers' right to free speech under NLRA

In addressing the challenge to the poster rule brought by the National Association of Manufacturers and others, the D.C. Circuit's three-judge panel first held that the rule was promulgated when the NLRB had a quorum of not less than the required three members – in other words, there was not a Noel Canning problem. That did not save the rule, however, because the Court found that the rule violated employers' free speech rights under Section 8(c) of the NLRA.

Section 8(c) protects employers' rights to speak non-coercively with respect to union matters, providing as follows:

The expressing of any views, argument, or opinion, or the non-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.

The Court analyzed the case as presenting an issue of "compelled speech," familiar under First Amendment case law. It essentially found that the NLRB was compelling speech that the NLRB wanted, thus violating an employer's right to speak as it wanted, including the right to refrain from expressing the NLRB's view. The Court noted, "the Board's rule requires employers to disseminate such information, upon pain of being held to have committed an unfair labor practice.... The right to disseminate...speech necessarily includes the right to decide not to disseminate it." The poster rule violated employer rights because it made the failure to speak the way the NLRB wanted and required (that is, the failure to post the notice) both (1) an unfair labor practice and (2) evidence of anti-union motivation in an unfair labor practice proceeding. In so holding the Court said, "Like the freedom of speech guaranteed in the First Amendment, § 8(c) necessarily protects - as against the Board - the right of employers (and unions) not to speak."

Finally, the Court found invalid the part of the rule providing that failure to post the notice would be a basis for tolling (stopping) the running of the six-month limitations period for filing unfair labor practice charges. The Court found that the tolling provision violated Section 10(b) of the NLRA (which has the limitations period) and noted that the "Board has not invoked any authority suggesting that...Congress intended to allow § 10(b) to be modified in the manner of the Board's tolling rule."

After finding that each of the three mechanisms chosen by the NLRB for enforcing the rule violated the NLRA, the Court vacated the entire poster rule.

Two of the three judges on the panel – Karen LeCraft Henderson and Janice Rogers Brown – went further in a concurring opinion written by Judge Henderson. Henderson said that she would have ruled that the NLRB could not lawfully require any posting of a notice of rights under the NLRA under the general authority granted by Section 6 of the NLRA to make rules and regulations as "necessary" to carry out the NLRA. In her opinion, such a rule was not "necessary" to carry out the express provisions of the NLRA. She noted that the Act's "language and structure are manifestly remedial" and that Congress did not intend "to authorize a regulation so aggressively prophylactic as the posting rule."

A Big Blow

The D.C. Circuit decision is clearly a big victory for employers and a big blow to the NLRB. It is hoped that the decision will give new vigor to employer rights of free speech under Section 8(c), which the NLRB has aggressively whittled down to a fraction of its express scope. At this point, it is unknown whether the NLRB will seek en banc review (review by all of the judges on the D.C. Circuit) or petition for a writ of certiorari to the U.S. Supreme Court – and the Fourth Circuit still has the South Carolina case to decide.

For now, the posters are not going up.