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NAW Legal Advisory

DC Appeals Court Nullifies NLRB's Employer "Notice Posting" Rule

Updated May 2013

On May 7, 2013, the federal appeals court in Washington, D.C. struck down the National Labor Relations Board notice posting rule that would require nearly 6 million employers, the great majority of which are small businesses, to post a workplace notice informing employees of their labor law rights—including the right to form or join a union. The employer’s failure to post the notice would be an unfair labor practice and expose the company to other sanctions. Several business organizations, including the Coalition for a Democratic Workplace (CDW), which NAW helps manage, challenged the rule and its enforcement provisions in the DC federal courts. The rule was issued on August 25, 2011 and has never gone into effect due to the DC appeals court grant of an emergency injunction to delay the enforcement date until this appeal is decided. With the issuance of its May 7th decision, the NLRB notice posting rule and related enforcement provisions are nullified, absent any further NLRB appeals or a request for review by the U.S. Supreme Court. (National Association of Manufacturers, et al. v. NLRB, No. 12-5068).


Rule Violates Employers’ First Amendment Rights

The three judge panel unanimously declared that the NLRB rule violates the First Amendment rights of employers against government compelled speech, by requiring employers to post the NLRB-mandated notice in the workplace. The U.S. Supreme Court’s “leading First Amendment precedents have established the principle that freedom of speech prohibits the government from telling people what to say,” the court noted. The rule also violates section 8(c) of the National Labor Relations Act which expressly precludes regulation of speech about unionization so long as the communication does not contain a threat of reprisal or force, or promise of benefit.

In this case, the business associations clearly objected to the message the NLRB has ordered them to publish in the workplace. The poster is one-sided, favoring unionization, because for example it fails to notify employees of their rights to decertify a union, to refuse to pay dues to a union in a right-to-work state, and to object to payment of dues in excess of the amounts required for representational purposes. Employers do have a right not to speak, the court held, noting that for example:

          “…a company official giving a noncoercive speech to employees describing the
          disadvantages of unionization does not commit an unfair labor practice if, in his speech,
          the official neglects to mention the advantages of having a union.”

The court did not decide whether the Board lacked statutory authority to issue the notice posting rule—another legal argument advanced by the business associations. Since the rule was nullified in its entirety on First Amendment grounds, the decision did not reach this argument. However, two justices in a concurring opinion held that the rule was not a valid exercise of the Board’s statutory authority to issue regulations that are “necessary” to carry out the provisions of the National Labor Relations Act.


Noel Canning Decision Cited

In its opinion the court also raised the issue as to whether the NLRB had a constitutionally appointed quorum of at least three members when the Board’s notice posting rule was finalized. In Noel Canning v. NLRB, decided on January 25, 2013, the same appeals court held that a recess appointment to the NLRB is constitutionally valid only if the appointment is made by the President during an intercession recess of the Senate, to fill a vacancy that arose during the same intercession recess. Although the NLRB lost its validly-appointed quorum on August 27, 2011 when the chairman’s term expired, the court noted the Board did have a valid quorum on August 25, 2011, the date the rule was officially finalized with its filing in the Federal Register Office. (On April 25, 2013, the NLRB asked the U.S. Supreme Court to review the DC appeals court decision in the Noel Canning case. That petition is pending.)


Appeal Pending in South Carolina Case

A second notice posting case is pending on appeal in the Fourth Circuit federal court of appeals. In that case the South Carolina district court struck down the NLRB rule, declaring “There is not a single trace of statutory text [in the National Labor Relations Act] that indicates Congress intended for the Board to proactively regulate employers in this manner.” (Chamber of Commerce of the United States v. NLRB).


Conclusion

In the DC notice posting case the NLRB may pursue further review in the appeals court (rehearing before the full court) or ask the U.S. Supreme Court to accept the case for review. In the meantime, the NLRB’s notice posting rule is a nullity and employers are not required to post such notices in the workplace.