• One Court Rejects Union Rights Poster and Another Stops the April 30 Posting Deadline
  • April 18, 2012 | Authors: Katherine Birmingham; Richard Gerakitis; Evan H. Pontz
  • Law Firm: Troutman Sanders LLP - Atlanta Office
  • Last Friday, the U.S. Chamber of Commerce scored a victory in its challenge of the National Labor Relations Board’s rule requiring employers to post union rights posters. This is the opposite result of another court that upheld part of the rule last month. Further, yesterday the D.C. Court of Appeals effectively ended the existing April 30, 2012 deadline for employers to put up the poster by issuing an injunction from it going into effect until the appeal of that earlier court ruling can be heard. Let’s explain.

    In a federal court in South Carolina, the U.S. Chamber of Commerce has argued that the NLRB lacks the authority to implement its rule requiring employers to post notices informing employees of their rights under the National Labor Relations Act (the “Act”). Last Friday, the court agreed, ruling that the NLRB overstepped its bounds by implementing the posting requirement. The court relied upon the plain language of Section 6 of the Act, which permits the NLRB to promulgate rules that are “necessary” to carry out provisions of the Act.

    The court ruled that the word “necessary” limits the NLRB’s rule-making authority, and so any rule it implements must be more than merely useful. The court also pointed out that the Act itself does not include any notice-posting requirements. The NLRB’s rule is therefore not necessary, as it seeks to carry out a non-existent provision of the Act.

    The court rejected the NLRB’s argument that it is permitted to promulgate rules that “reasonably relate” to the purposes of the Act, stating that this standard would give the NLRB “unlimited power to write new law, without any regard for the language or legislative history of the governing statute, so long as it arguably fits within the purposes of the statutory scheme.”

    Additionally, the South Carolina federal court considered the limited authority of the NLRB to initiate an action against an employer. The court noted that the NLRB is, by legislative design, a purely reactive entity, with its processes invoked when a party files an unfair labor practice charge or a representation petition. The court held that the NLRB’s notice-posting rule is a proactive regulation placing an affirmative obligation on employers prior to the filing of a charge or petition, making it inconsistent with the NLRB’s reactive role under the Act.

    Finally, in reviewing the legislative history of the Act, the court found no evidence to suggest that Congress intended to give the NLRB the authority to impose notice-posting requirements, or to impose universal notice-posting requirements on employers. The court noted that Congress expressly included notice-posting requirements in numerous other federal labor laws, but has never inserted a notice-posting provision in the Act, despite making other revisions. For these reasons, the court held that the NLRB lacks the authority to promulgate the notice-posting rule, and that the rule is therefore unlawful.

    While this holding is certainly a loss for the NLRB, it does not entirely resolve the matter. As discussed in our previous advisory, a federal judge in the District of Columbia issued an order last month holding that the Board does have the authority to promulgate the posting rule. When these cases were pending before their respective courts, the NLRB postponed the effective date for the rule, setting April 30, 2012 as the date on which employers would be required to comply.

    However, the District of Columbia decision has been appealed, and yesterday the Court of Appeals for the D.C. Circuit issued an ordered enjoining the rule while the appeal is conducted. The Court of Appeals has scheduled oral arguments in the case for September 2012. So, the April 30 deadline is now stopped, and no rule will go into effect until after the Court of Appeals rules, sometime in or after September 2012.

    Even with this temporary reprieve from the April 30 effective date of the rule, employers need to stay alert for more developments in this on-going battle. The last shot has yet to be fired, and this could end up in the U.S. Supreme Court before it is all over.