Judge Amy Berman Jackson of the United States District Court for the District of Columbia upheld the key provision of a National Labor Relations Board ("NLRB" or "Board") rule that requires employers to post notices of employee rights under the National Labor Relations Act ("NLRA" or "Act") in the workplace by April 30, 2012, but also found that the rule's enforcement provisions exceeded the Board's authority and were, therefore, struck down. Nat'l Ass'n of Mfrs. v. NLRB, Civil Action No. 11-1629 (D.C.C. Mar. 3, 2012).
The rule at issue ("Rule") requires all employers subject to the NLRA to post notices, in conspicuous places, informing employees of their rights under the NLRA, as well as providing contact information for the Board. 76 Fed. Reg. 54006 (Aug. 30, 2011). The notice is an eleven-by-seventeen-inch poster that employers can download from the NLRB website or obtain in hard-copy from one of the Board's offices. Click here for details.
In addition to the posting requirement, the Rule provides that an employer's failure to post the notice amounts to a per se unfair labor practice, in violation of employees' rights under the NLRA. It also states that if an employer fails to post the notice, the Board may extend, or "toll," the normally-applicable six-month statute of limitations for employees to file a charge with the Board.
While the court upheld the posting requirement, it found that the Board had exceeded its authority in passing the unfair labor practice and "tolling" provisions.
The Notice Posting Requirement
The plaintiffs in National Association of Manufacturers argued that the Board had exceeded its authority in passing "general rules for the workplace," and that its power to act took effect only once an unfair labor practice charge or union election petition was filed. They also argued that the posting requirement violated their constitutional rights under the First Amendment, because it forced them to "speak" against their will.
The Court disagreed, and cited to the language of the NLRA extending the Board's rulemaking authority as may be necessary to carry out the provisions of a broad section of the Act – not just the specific provisions pertaining to unfair labor practices and election petitions. It reasoned that if Congress had wished to limit the Board's power in accordance with the plaintiffs' views, it could have expressly noted which provisions fell within the Board's rulemaking authority.
The court also rejected the plaintiffs' argument that the fact that the Board had never issued a similar rule before was evidence that it lacked the authority to do so. Rather, the court observed that the NLRA places the Board "squarely at the heart of labor-management relations," and consequently, the dissemination of information about employee rights was well within its purview.
The court then examined whether the Rule itself was a reasonable exercise of the Board's rulemaking authority. To that end, it noted that the Board conducted thorough research and cited ample evidence that many employees were unaware of their rights under the NLRA, and therefore could not effectively exercise them. It then determined that the notice posting requirement was a reasonable means of addressing employees' lack of knowledge.
In response to the plaintiffs' argument that the posting requirement compelled them to "speak" against their will and in violation of their First Amendment rights, the court countered that the posting requirement does not compel employers to say anything. Rather, the posters are a message from the government and therefore constitute government speech, and therefore the Rule did not violate employers' First Amendment rights.
In support of its conclusion, the court noted that the posters bear a large NLRB logo at the top and bold text across the bottom that states "This is an official Government Notice." It contains the contact information for the NLRB and directs employees to contact the Board with questions about their rights. Further, the notice is simply a recitation of the law; it does not suggest that employers favor collective bargaining activities, and nothing in the regulation restricts what employers may say about the Board's policies.
The "Unfair Labor Practices" Provision
The second provision that the court addressed holds that failure to post the notice constitutes an unfair labor practice under the NLRA. Specifically, it states that "Failure to post the employee notice may be found to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed by [the Act]."
In striking down this provision, the court found that the Board had acted unreasonably in deeming a failure to post notice a form of "interference" with employees' rights. It concluded that the term "interfere," as used in the Act, refers to an active impediment to an employee's exercise of his rights. In other words, the Act prohibits conduct by which an employer hampers an employee's ability to exercise his rights. It does not prohibit "a mere failure to facilitate the exercise of those rights."
Notably, the Court affirmed that nothing in its decision prevents the Board from finding that a failure to post notice constitutes an unfair labor practice in any individual case brought before it. It simply requires that the Board make a specific finding, based on the facts of a given case, before determining that a failure to post interferes with the employee's exercise of his or her rights.
The "Equitable Tolling" Provision
The final provision that the court addressed states that if an employer fails to comply with the notice posting requirement, and if one of its employees files an unfair labor practice charge, the Board may excuse the requirement that the charge be filed within six months of the allegedly unlawful action. Note, however, that the Board may not excuse the statute of limitations in cases in which the employee has received actual notice that the conduct complained of is unlawful. The court found that the Board was unauthorized to permit this suspension of the limitations period, known as "equitable tolling," and struck down the provision that allowed for it.
First, the court held that the provision extends the statute of limitations not just for unfair labor practices arising out of the employer's failure to post the notice, but for all unfair labor practices against offending employers. The court explained that equitable tolling is meant to operate as a defense to the argument that a plaintiff's claim was untimely, and it should only be granted in "extraordinary and carefully circumscribed instances." If the Board's equitable tolling provision remained in effect, it would represent a complete nullification of the limitations period for certain employers.
The court distinguished the Board's equitable tolling provision from a series of cases brought under federal anti-discrimination statutes, in which the courts tolled statutes of limitations based on employers' failures to post notices of employee rights. In those cases, Congress had expressly mandated the notice posting under the employment discrimination statutes at issue; here, the posting requirement was effectuated by the Board. Therefore, the justification that Congress recognized the importance of informing employees of their rights did not apply to the Board's Rule. More significantly, in the cases brought under the anti-discrimination statutes, equitable tolling was granted on a case-by-case basis, whereas the Board's provision turned it into the rule, rather than the exception.
Other Features and Implications of the Decision
Though the complaint in the National Association of Manufacturers case challenged only the provisions dictating notice posting, the failure to post as an unfair labor practice, and equitable tolling, the court still took notice of a separate provision that stated that an employer's knowing and willful refusal to comply with the posting requirement could be used as evidence of unlawful motive in a case in which motive is an issue.
The court distinguished the "unlawful motive" provision from the two others it invalidated, reasoning that the "unlawful motive" provision did not create a presumption of anti-union animus whenever an employer failed to post notice. Rather, the Rule made clear that in order to be considered evidence of an unlawful motive, the employer's failure to post must have been the result of an affirmative decision, made with actual knowledge of the Rule's existence, and carried out notwithstanding that knowledge. This stood in contrast to the unfair labor practice and tolling provisions because it required a case-by-case determination, rather than creating a blanket presumption. Therefore, though the court did not have to render a formal decision, it opined that the Board had authority to enact the provision.
Although it is possible that both sides will appeal the court's decision, the Rule's posting requirement is slated to take effect on April 30, 2012, as noted above, and employers should be prepared to comply on that date. It is likely another court will soon rule on these issues in a separate litigation in South Carolina, so we will continue to keep you posted on these important developments as they occur.
If you have any questions or concerns regarding the new posting requirement or related issues, please contact the lawyers at Proskauer.
