May 14, 2013 Labor Relations

D.C. Circuit Court of Appeals Vacates the NLRB’s Posting Rule

The D.C. Circuit Court of Appeals, in National Association of Manufacturers v. NLRB (No. 12-5068), has vacated the National Labor Relations Board’s (“NLRB”) rule requiring covered employers to conspicuously display a poster informing employees of their rights under the National Labor Relations Act (the “NLRA”).

1. Background Regarding the NLRB’s Posting Rule.

The NLRB’s posting rule required nearly all private sector employers to conspicuously display a poster informing employees, among other things, of their rights under the NLRA to: form, join, or assist a union; bargain collectively through representatives of their choosing; discuss wages, benefits, and other terms and conditions of employment with fellow employees or a union; take action to improve working conditions; strike and picket; or choose not to engage in any of these activities.

The posting rule also included three enforcement mechanisms for the NLRB. If an employer failed to display the poster, in accordance with the rule: (1) the employer may be found liable for an unfair labor practice charge; (2) a knowing and willful failure to post may be considered evidence of anti-union animus in other unfair labor practice proceedings; and (3) the NLRB may toll (suspend) the six-month statute of limitations period for filing any unfair labor practice charge under § 10(b) of the NLRA, unless the employee has received actual or constructive notice that the conduct complained of is unlawful.

Many employers, trade associations and other organizations representing employers viewed the NLRB’s poster as one-sided and favoring unionization (e.g., the poster did not, among other things, inform employees of their rights to decertify a union, to refuse to pay union dues in a right-to-work state, and to object to payment of dues in excess of the amounts required for representational purposes). They also objected to being forced to display the poster, or risk unfair labor practice charges, and argued that the rule improperly expanded the NLRB’s authority. 

Lawsuits were filed in the federal district courts in the District of Columbia and South Carolina challenging the validity of the NLRB’s posting rule. In 2012, the District of Columbia and South Carolina district courts issued inconsistent opinions regarding the validity of the posting rule – the District of Columbia court struck down a portion of the rule, while the South Carolina court struck down the rule in its entirety. These decisions were appealed, respectively, to the D.C. Circuit Court of Appeals and the Fourth Circuit Court of Appeals (the federal appeals court for the South Carolina district court). The D.C. Circuit also granted a temporary injunction, staying the rule during the appeal. 

2. D.C. Circuit Court of Appeals Decision.

On May 7, 2013, the D.C. Circuit struck down the NLRB’s posting rule in its entirety.[1] The Court explained that, under the free speech protections of § 8(c) of the NLRA, an employer has certain rights to refrain from disseminating materials with which it disagrees – i.e., the NLRB’s poster, which the plaintiffs claimed was one-sided and pro-union. The NLRB therefore could not require the employers to display the poster, or face unfair labor practice charges or a finding of anti-union animus in other unfair labor practice cases – two of the posting rule’s three enforcement mechanisms.

The Court also invalidated the third enforcement mechanism in the rule – the tolling (suspension) of the statute of limitations under § 10(b) of the NLRA for filing an unfair labor practice charge. The Court explained that this tolling provision: (a) substantially amends the statute of limitations that Congress set out in the NLRA; and (b) the NLRB, as an administrative agency, exceeded its authority in creating this rule.

After finding the three enforcement mechanisms in the posting rule to be invalid, the Court vacated the entire posting rule, holding that the remaining provisions could not be severed from the invalid portions. Two of the three judges on the panel also found, in a concurrence, that the NLRB lacked authority under § 6 of the NLRA to promulgate this posting rule because the rule was not, as § 6 of the NLRA requires, “necessary” to carry out the express provisions of the NLRA. 

3. Next Steps and Impact on Employers.

For now, employers are not obligated to display the NLRB’s poster in their workplaces. This decision is also helpful for employers because it reinforces employers’ free speech rights under § 8(c) of the NLRA and the limits on the NLRB’s rulemaking authority. 

The NLRB’s appeal of the South Carolina district court’s decision invalidating the posting rule, however, is still pending in the Fourth Circuit Court of Appeals. It is also possible that the NLRB could appeal the D.C. Circuit’s May 7 decision. We will continue to monitor these developments.

Please do not hesitate to contact any of our attorneys if you have any questions.

[1] The D.C. Circuit also held that, because the NLRB’s posting rule was filed with the Office of the Federal Register during a time when three of the four members of the NLRB were confirmed by the Senate, the D.C. Circuit’s recent decision in Noel Canning v. NLRB, 705 F.3d. 490 (D.C. Cir. 2013), invaliding President Obama’s recess appointments to the NLRB, did not affect the posting rule.