The National Labor Relations Board (NLRB) suffered a major court defeat this week. On May 7, 2013, the District of Columbia Court of Appeals struck down the NLRB's rule that required employers subject to its jurisdiction to post a “Notification of Employee Rights under the National Labor Relations Act.” National Association of Manufacturers v. National Labor Relations Board, Nos. 12-5068, 12-5138, 2013 U.S. App. LEXIS 9231 (May 7, 2013).

The required posting contained NLRB-created language informing employees of their rights under the National Labor Relations Act (NLRA). The rule contained three enforcement mechanisms to ensure compliance by employers. Under the rule, an employer's failure to post the notice: (1) is an unfair labor practice; (2) is evidence of union animus that could support an unfair labor practice; and (3) suspends the six month limitation period for filing an unfair labor practice charge.

The Circuit Court vacated the rule due to its enforcement mechanisms. The Court found the first two enforcement mechanisms violated § 8(c) of the NLRA, the employer’s free speech provision. Section 8(c) protects employer speech that does not contain threats or promises of benefits. Because the rule makes an employer’s failure to post the NLRB’s notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus, the Court concluded that the rule unlawfully punishes an employer for refusing to speak, in violation of § 8(c) and the employer’s freedom not to speak under the First Amendment.

As to the third enforcement mechanism — tolling the limitation period for filing a charge — the Court found that an employer's failure to post the notice did not meet the legal standard necessary to permit tolling of the limitation period.

The court found that the part of the rule containing the enforcement mechanisms was not severable from the rest of the rule because the NLRB had rejected the option of voluntary compliance. As a result, the entire rule was declared invalid and vacated.

The NLRB may seek to have this case reconsidered by the Court of Appeals or appeal to the U.S. Supreme Court. Alternatively, the NLRB may attempt to re-issue the notice requirement but without the problematic enforcement mechanisms. Notably, in another case challenging the same rule, the United District Court for the District of South Carolina held that the NLRB lacked the authority to promulgate the rule. See Chamber of Commerce of the U.S. v. NLRB, 856 F. Supp. 2d 778 (D.S.C. 2012). That decision is currently pending before the Fourth Circuit.

This decision is an important reminder of the statutory right of an employer to express its views on the role of unions in its workplace. Employers should consider including a carefully crafted policy statement in their handbook and include a discussion of the employer’s policy in new employee orientation programs.