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June 2013

Fourth Circuit Becomes Second Appeals Court to Reject NLRB's Posting Rule

On June 14, the Fourth U.S. Circuit Court of Appeals unanimously struck down the National Labor Relations Board’s posting rule – the second appeals court to do so in as many months.

In Chamber of Commerce of the United States, et al. v. National Labor Relations Board, et al., No. 12-1757, the Fourth Circuit found that the NLRB exceeded its authority under Section 6 of the National Labor Relations Act (NLRA or Act).

The posting rule, published in August 2011 (but stayed since April 2012), required private employers to post notices in the workplace, on posters at least 11x17 inches, for the purpose of informing employees of their rights under the Act. Failure by an employer to post the notice constituted an unfair labor practice and permitted 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 per se of union animus in any unfair labor practice in which motive was at issue – that is, almost all of them.     

As we noted in a prior advisory, in early May, the D.C. Circuit in National Association of Manufacturers, et al. v. National Labor Relations Board, et al., struck down the rule, focusing largely on the fact that the posting rule violated the free speech rights of employers as provided by the First Amendment and Section 8(c) of the Act. In other words, the unanimous D.C. Circuit panel based its decision on the substance of the rule, rather than the procedural question of the Board’s authority to engage in rule-making. However, a majority concurrence found that the NLRB exceeded its authority.

The Fourth Circuit, picking up where the concurrence in the D.C. Circuit decision left off, determined the rule was invalid on the grounds that Congress never intended to delegate proactive, rule-making authority to the Board. Applying the U.S. Supreme Court’s two-part framework set forth in Chevron, U.S.A. Inc. v. Natural Resources Defense Council (1984), the Fourth Circuit first examined whether Congress intended to grant the Board the authority to promulgate the “poster rule” requirement. Looking at the plain language of Section 6 of the NLRA, which grants the Board authority to issue rules “necessary to carry out” the provisions of the Act, the Fourth Circuit found that, examining the Act as a whole, there was no indication that Congress intended to grant the Board the authority to promulgate the posting rule requirement.

Explaining that the NLRB serves “expressly reactive roles: conducting representation elections and resolving ULP [unfair labor practice] charges,” the Fourth Circuit rejected the Board’s argument that the notice-posting rule was “necessary to carry out” the Board’s enforcement functions of the Act because “employee knowledge of NLRA rights and how to enforce them within statutory timeframes is crucial to effectuate” labor policy. In so doing, the Fourth Circuit held that “regardless of how laudable the NLRB’s goal of educating workers may be, ‘there is nothing in the text of the NLRA to suggest the burden of filling the ‘knowledge gap’ should fall on the employer’s shoulders.’ ”

Buttressing the conclusion that Congress never intended to bestow the Board with the power to enact the challenged regulation, the Fourth Circuit examined the history of the NLRA vis-à-vis congressional treatment of sister agencies with statutory authorization to require posting notices.  For instance, the Court noted that Congress considered but rejected a notice requirement in early versions of the NLRA. Yet Congress included notice provisions in various other statutes, including the Railway Labor Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Occupational Safety and Health Act, among others.  Consequently, the Court concluded, “[H]ad Congress intended to grant the NLRB the power to require the posting of employee rights notices, it could have amended the NLRA to do so.” 

At this point, unless the NLRB petitions the Supreme Court for review and the high court overturns the decisions of the D.C. and Fourth Circuit Courts – which seems highly unlikely – we can all presume that the NLRB’s posting requirement will remain unenforceable.

Employers are again reminded, however, that the Courts’ rulings are 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