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May 2013

D.C. Appeals Court Strikes Down NLRB Posting Rule

On May 7, the U.S. Court of Appeals for the D.C. Circuit struck down a National Labor Relations Board rule requiring the roughly 6 million NLRB-covered private employers to post a notice alerting employees of their rights under the National Labor Relations Act. National Association of Manufacturers, et al. v. National Labor Relations Board, et al., No. 12-5068.

The rule, published in August 2011 (but stayed since April 2012), required employers to “post notices to employees, in conspicuous places, informing them of their NLRB rights.”  The required poster – specifically prescribed by the Board to be “at least 11 inches by 17 inches” – mandated that employers inform employees of their right to form, join, or assist a union, to collectively bargain, discuss wages, benefits, and other terms and conditions of employment, and to take action to improve working conditions, including but not limited to the right to strike and picket.  Failure by an employer to post the notice requirement constituted an unfair labor practice.  Moreover, the rule stated that failure to post the notice would permit the Board to (a) toll the six-month limitations period for filing any unfair labor practice charge, and (b) find that the failure was evidence of union animus in any unfair labor practice in which motive was an issue – that is, almost all of them.

Relying on the First Amendment and Section 8(c) of the Act, which states the expression of “any view, argument or opinion, or dissemination thereof, whether in written, printed, graphic or visual form, shall not constitute or be evidence of unfair labor practice … if such expression contains no threat of reprisal,” the Court found that the Board’s posting rule – specifically, that failure to do so would constitute an unfair labor practice – violated its own rule and First Amendment principles upon which Section 8(c) of the Act is grounded.  Section 8(c) serves an essential labor function of allowing employers and employees to present alternative views.  The Board’s posting requirement violated the free speech principles guaranteed in Section 8(c) by coercing employers, through the threat of sanctions, to disseminate a viewpoint (the Board’s) employers may not necessarily support.  In striking down this compelled speech provision of the Board’s rule, the Court noted that “[t]he right to disseminate another’s speech necessarily includes the right to decide not to disseminate speech.”

The Court also rejected the Board’s six-month tolling rule.  Although the NLRB argued that it was merely providing for “equitable tolling” (a legal concept that extends a statute of limitations when a plaintiff could not have discovered the violation within the limitations period allotted, usually because of fraudulent concealment of facts by the defendant), the Court rejected that rationale. It stated that the Board failed to present any authority that Congress intended an equitable extension to apply to the Act.  Additionally, the equitable tolling provision proposed by the Board rested not on the fraudulent concealment of facts, but on an alleged fraudulent concealment of the law, i.e., that the employer’s failure to post the Board’s notice would deprive employees of knowledge of their rights under the Act.  The D.C. Circuit rejected this construction, explaining that the courts do not generally recognize lack of knowledge of the law as a basis for equitable tolling.

Having invalidated all three means of enforcing the NLRB’s posting requirement, the Court vacated the Board’s posting rule in its entirety.  Moreover, in a “concurring” opinion (which was supported by a majority of two of the three judges on the panel, making it binding precedent), the Court also held that the Board exceeded its authority by engaging in the rulemaking at issue here.  Section 6 of the Act permits the Board to engage in rulemaking “as may be necessary to carry out the provisions of this subchapter.”  The majority concurrence held that the posting rule was not “ ‘necessary’ to carry out the express provisions of the Act” and thus was invalid, regardless of the specific components of the rule’s enforcement provisions.

Unless another circuit court upholds the Board’s posting requirement, the D.C. Circuit’s ruling should apply to private employers nationwide.  Nevertheless, although employers won this battle, the war likely is not over yet.  An appeal regarding the same issue is pending in the Fourth Circuit, though this decision may render that appeal moot.  In addition, the NLRB is almost certain to petition the U.S. Supreme Court for review, and there is a chance the high court will grant it.  We will keep you updated.

Employers should note that the D.C. Circuit’s ruling is limited to the Board’s rule requiring employers to notify workers of a right to unionize, collectively bargain and take other actions to improve working conditions.  Employers are still subject to other NLRB-mandated workplace postings, such as notices about union elections, as well as posting requirements mandated by other agencies, including the Equal Employment Opportunity Commission, the Department of Labor, and the Occupational Safety and Health Administration. 

For additional information on this decision, on an employer’s posting obligations, or on any other employment issue, please do not hesitate to contact any member of Gordon & Rees’s Employment or Labor Practice Groups.

To read the opinion, please click here.


Employment Law