Federal Appeals Court Strikes Down NLRB Notice Rule

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In a major victory for employers on May 7th, the U.S. Court of Appeals for the District of Columbia struck down the National Labor Relations Board’s (“NLRB”) August 2011 regulation requiring private businesses to post an employee rights notice (“Notice”) informing workers of their rights under the National Labor Relations Act (“Act”). The Court held that the rule violates the free speech rights of employers under the Act, and unlawfully extends the statute of limitations period for filing an unfair labor practice charge. Nat’l Ass’n of Mfrs. v. NLRB, No. 12-5068, 2013 U.S. App. LEXIS 9231 (D.C. Cir. May 7, 2013). Although issued in August 2011, the rule has never gone into effect because of prior court challenges.

The rule contains three enforcement mechanisms for failing to post the Notice. The rule allows the NLRB to find that failure to post the Notice is an unfair labor practice, and also evidence of anti-union motive in cases where such unlawful motivation is required to be established. It also allows the NLRB to extend the sixmonth statute of limitations for filing an unfair labor practice charge where an employer has not posted the Notice.

In striking down the rule for violating the free speech rights of employers, the Court relied on § 8(c) of the Act. Section 8(c) states that an employer’s expression of “any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, 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 or reprisal or force or promise of benefit.” The Court found that this language embraces the free speech principles of the First Amendment, including the prohibition against the government compelling the expression of certain views. The Court then held that the rule constitutes government compelled speech because it penalizes employers who refuse to post the Notice by treating their conduct as an unfair labor practice, and as evidence of anti-union motivation in unfair labor practice cases in which anti-union motivation is an issue, such as firings or refusals to hire. The Court also held that the rule unlawfully extends the statute of limitations in § 10(b) of the Act for unfair labor practice as a penalty for failing to post the Notice. The Court did not decide whether the NLRB had the regulatory authority to issue the Notice, but struck down the Notice because it determined that the illegal penalties imposed on employers for not posting the Notice could not be separated from the Notice itself.

While the Court’s decision is good news for employers, the fight over the rule is likely not over. The NLRB stated that it is reviewing the decision and considering what further actions to take. The rule is also under review by  another Court of Appeals and a decision in that case may be issued soon. However, for the present and foreseeable future, employers need not post the Notice. The Court’s decision has no effect on the obligation of government contractors, subject to Executive Order 13496, to continue to post a notice informing employees of their rights under the Act as a condition of contracting with the federal government.

Additional Assistance

If you have any questions about the NLRB Notice, please contact any of the attorneys on our Labor & Employment Practice Team.

Labor & Employment Attorneys

James D. Donathen (716) 847-5476 jdonathen@phillipslytle.com
Marc H. Goldberg (518) 472-1224 Ext. 1229 mgoldberg@phillipslytle.com
James R. Grasso (716) 847-5422 jgrasso@phillipslytle.com
Christopher L. Hayes (716) 504-5725 chayes@phillipslytle.com
Amanda L. Lowe (716) 504-5747 alowe@phillipslytle.com
Michael R. Moravec (716) 847-7021 mmoravec@phillipslytle.com
Kevin J. Mulvehill (585) 238-2095 kmulvehill@phillipslytle.com
Linda T. Prestegaard (585) 238-2029; (212) 508-0425 lprestegaard@phillipslytle.com