• D.C. Circuit Rejects Union Rights Poster Rule
  • May 10, 2013 | Authors: Richard Gerakitis; Michael D. Kaufman; Gary D. Knopf; Evan H. Pontz
  • Law Firm: Troutman Sanders LLP - Atlanta Office
  • Yesterday, a court of appeals sitting in Washington D.C. vacated the National Labor Relations Board’s (the Board) rule requiring employers to post union rights posters.

    As you may remember, in August 2011, the NLRB issued a Final Rule requiring employers to post notices informing employees of their rights under the National Labor Relations Act (the Act). The rule also contained various enforcement mechanisms that (i) specified that the failure to post the notice requirement may be treated as an unfair labor practice under the Act, (ii) allowed the Board to extend the six-month statute of limitations for filing a charge involving any other unfair labor practice allegations against the employer who fails to post the notice, and (iii) allowed the Board to consider the employer’s knowing and willful refusal to comply with the requirement as evidence of unlawful motive in another alleged violation.

    The National Association of Manufacturers sued the Board in a federal district court sitting in D.C. challenging the posting requirement, arguing that Congress did not expressly authorize the Board to issue the posting rule as it has with other mandatory workplace notices. The lower court rejected that challenge in early 2012 and largely upheld the posting requirement finding that the Board was authorized to issue the rule under its rule-making authority to effectuate the purposes of the Act.

    The Court of Appeals disagreed. It first reviewed the Board’s enforcement mechanisms, finding that they violated Sections 8(c) and 10(b) of the Act. In particular, the Court found that Section 8(c) prohibits the Board from finding an unfair labor practice where an employer fails to hang the poster. Additionally, it prohibited the Board from using the failure as evidence of unlawful motive in another alleged violation. The Court reasoned that Section 8(c), which states that an employer’s expression or dissemination of views “shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit,” not only gives employers the right to speech, but also allows employers to stay silent. Thus, the Court explained that if “8(c) prevents the Board from charging an employer with an unfair labor practice for posting a notice advising employees of their right not to join a union . . . [h]ow then can it be an unfair labor practice for an employer to refuse to post a government notice informing employees of their right to unionize (or to refuse to)?”

    In striking down the third enforcement mechanism -the tolling of the statute of limitations period—the Court pointed to a lack of evidence of any congressional intent to allow the Board to modify Section 10(b) of the Act in this manner.

    Because all three enforcement mechanisms violated the Act, the Court held that the Board would not have issued a posting rule that depended solely on voluntary compliance, sidestepping the question of whether the Board lacked authority to issue the rule in the first place.

    Ultimately, this decision is a win for employers. While the D.C. Circuit had previously issued an injunction preventing the rule from going into effect until the appeal of the lower court’s ruling had been heard and decided, the Court of Appeal’s ruling yesterday confirms that employers are not required to put up the notice—at least for the time being.

    Indeed, a month after the district court in D.C. issued its opinion, a district court sitting in South Carolina held that the Board lacked authority to promulgate the rule. The appeal in that case is now pending in the Fourth Circuit. While we expect the Fourth Circuit to follow suit with the D.C. Circuit and strike down the posting rule, employers need to stay alert for more developments in this battle, as this could ultimately end up in the U.S. Supreme Court for a final determination.