D.C. Circuit Rules NLRB Notice-Posting Requirement Invalid

by Morgan Lewis
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Notice Rule remains inoperative as court holds that it conflicts with NLRA's statutory language.

On May 7, the U.S. Court of Appeals for the District of Columbia Circuit issued its opinion in National Association of Manufacturers v. National Labor Relations Board, striking down the National Labor Relations Board's (NLRB's or Board's) so-called "Notice Rule."[1] The Notice Rule was published by the NLRB on August 25, 2011, and would have required all employers subject to the National Labor Relations Act (NLRA) to post a notice informing employees of their rights under the NLRA.[2] The court's decision means employers will not have to post the notice for the foreseeable future—or perhaps ever—and raises substantial questions about the Board's ability to implement other rules, such as the new "quickie" election rules that it attempted to impose in 2012.

Notice Rule Requirements

If the Notice Rule had been upheld by the D.C. Circuit, it would have required all employers subject to the NLRA to post a specific workplace notice explaining to employees their right to, among other things, organize a union, discuss the terms and conditions of their employment, take action with co-workers to improve their working conditions, and go on strike. The rule also explained that it was illegal for an employer to take various actions, including questioning employees about their union support or disciplining employees because they support or join a union.

The Notice Rule also would have required an employer to post the required notice in the same place that it posted other notices, including the employer's intranet or Internet site, if the employer customarily communicates with its employees by such means. Finally, if 20% or more of an employer's workforce speaks a language other than English, the employer would have had to provide the required notice in the language that those employees speak.

Failure to post the required NLRA notice would have been considered an unfair labor practice, could have been considered evidence of an employer's unlawful motive, and could have tolled the six-month statute of limitations for filing unfair labor practices. The deadline for posting notices originally was November 14, 2011, a date that was twice pushed back by the Board.

Previous Challenges to the Notice Rule

Immediately after the 2011 publication of the Notice Rule, several employer groups challenged the Notice Rule in court, and, before the effective date, the Notice Rule was struck down. In March 2012, the U.S. District Court for the District of Columbia upheld the Board's authority to issue the notice obligation but rejected some of the proposed enforcement mechanisms.[3] In April 2012, the U.S. District Court for the District of South Carolina rejected the Notice Rule in its entirety.[4] The D.C. Circuit enjoined enforcement of the Notice Rule while it considered an appeal of the district court ruling that partially upheld the Notice Rule.[5] In its National Association of Manufacturers opinion, a three-judge panel of the D.C. Circuit unanimously rejected the Notice Rule as conflicting with NLRA statutory language, namely sections 8(c) and 10(b), and two judges went further to argue that the Board lacked any authority to issue the Notice Rule in the first place.[6]

D.C. Circuit's Rejection of the Notice Rule

In National Association of Manufacturers, the D.C. Circuit addressed a number of issues in reaching the conclusion that the entire Notice Rule is invalid and unenforceable.

First, the court held that the Notice Rule conflicted with section 8(c) of the NLRA. Section 8(c) generally is known as the employer "free speech" provision of the NLRA, and, when Congress added Section 8(c) in 1947, it broadly intended for employer free speech rights in the labor context to mirror First Amendment protections. The D.C. Circuit concluded that creating a new unfair labor practice or finding unlawful motivation in an unfair labor practice case, based on the failure to post the notice, amounted to an impermissible restriction on employer free speech. In its opinion, the court stated the following:

[T]he Board's rule requires employers to disseminate such information, upon pain of being held to have committed an unfair labor practice. But that difference hardly ends the matter. The right to disseminate another's speech necessarily includes the right to decide not to disseminate it.
     . . . .
Like the freedom of speech guaranteed in the First Amendment, [section] 8(c) necessarily protects—as against the Board . . .—the right of employers (and unions) not to speak.[7]

Second, the court found that the Notice Rule's tolling penalty for failure to post the notice conflicted with section 10(b)'s six-month statute of limitations for unfair labor practice charges. According to the D.C. Circuit, "the Board made no effort to demonstrate that when [section] 10(b) became law in 1947, Congress would have had any basis for assuming that the six-month limitations period might be modified by the sort of tolling rule the Board announced sixty-four years later."[8]

Based on the Court's unanimous findings, the opinion declined to address another basis for rejecting the Notice Rule, namely that the Board lacked authority under section 6 of the NLRA—the rulemaking provision—to issue the Notice Rule in the first place. Two of the three panel members, Judge Karen LeCraft Henderson and Judge Janice Rogers Brown, issued a concurring opinion in which they went on to explain why section 6 could not be interpreted to afford the Board the legal authority to issue the Notice Rule.

Practical Implications and Conclusion

The D.C. Circuit's decision in National Association of Manufacturers is the latest in a series of adverse federal court decisions, mainly emanating from the D.C. Circuit, that challenge the Board's authority to promulgate new rules. An appeal of a lower court ruling that invalidated the Board's new election rules, which were issued in late 2011, is also pending before the D.C. Circuit. Should the D.C. Circuit uphold that lower court ruling, both of the Board's recent rulemaking initiatives will have been struck down.

For the time being, the Notice Rule will remain inoperative, pending appeal to the full D.C. Circuit or potentially the U.S. Supreme Court. With another appeal relating to the Notice Rule currently being considered by the U.S. Court of Appeals for the Fourth Circuit, the possibility exists for a "split" in the courts of appeal should the Fourth Circuit agree to uphold part or all of the Notice Rule. Such a decision by the Fourth Circuit would increase the probability for ultimate review of the Notice Rule by the Supreme Court later in 2013 or 2014.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis attorneys:

Washington, D.C.
Charles I. Cohen
Joseph E. Santucci
Jonathan C. Fritts
John F. Ring

Chicago
Philip A. Miscimarra
Ross H. Friedman

Houston
A. John Harper II

Los Angeles
Clifford D. Sethness

New York
David A. McManus

Philadelphia
Steven R. Wall
Joseph C. Ragaglia

Boston
Lisa Stephanian Burton


[1]. Nat'l Assoc. of Mfrs. v. NLRB, No. 12-5068 (D.C. Cir. May 7, 2013), available here.

[2]. For more information on the NLRB's publication of the Notice Rule, see our August 25, 2011, LawFlash, "NLRB to Issue Final Rule Requiring All Employers (Even Nonunion Employers) to Post Notice of Employee Rights Under the NLRA," available here.

[3]. For more information on the D.C. district court's decision, see our March 6, 2010, LawFlash, "D.C. Court Issues Split Decision in NLRB Notice Case," available here.

[4]. For more information on the South Carolina district court's decision, see our April 16, 2012, LawFlash, "South Carolina Court Strikes Down NLRB Notice-Posting Rule," available here.

[5]. For more information on the D.C. Circuit's order, see our April 17, 2012, LawFlash, "NLRB Enjoined From Enforcing Notice-Posting Rule Pending Appeal," available here.

[6]. On behalf of 31 members of the U.S. House of Representatives, Morgan Lewis filed an amici brief on May 29, 2012, that urged the D.C. Circuit to hold the Notice Rule invalid.

[7]. Nat'l Assoc. of Mfrs., slip op. at 17–22.

[8]. Id. at 25.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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