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Court Agrees with CDW, Strikes Down NLRB Posting Rule

May 9, 2013
In another victory for the AGC-supported Coalition for a Democratic Workplace (CDW), the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit) has invalidated a regulation by the National Labor Relations Board (NLRB) that required most private-sector employers to post designated notices informing employees of certain rights under the National Labor Relations Act (NLRA), including the right to organize.  As previously reported, the Board published the controversial final rule in August 2011 but put implementation on hold after the DC Circuit issued a temporary injunction on the rule.  The court has now permanently enjoined the rule.  The CDW was a co-plaintiff in the case, the National Association of Manufacturers v. NLRB (D.C. Cir., 5/7/13). The court chose not to address the plaintiffs’ argument that the Board lacked the authority to issue the main part of the rule – the part requiring employers to post the notice.  Instead, the court focused on the plaintiffs’ arguments challenging the enforcement provisions of the rule.  The rule contains three means of enforcement for failure to post:  (1) the NLRB may deem the employer to have committed an unfair labor practice; (2) the NLRB may toll the statute of limitation for an employee’s filing of an unfair labor practice charge concerning other employer conduct; and, (3) if the NLRB finds that the failure to post was “knowing and willful,” then it will deem the employer to have an unlawful motive in an unfair labor practice case. The court found the first and third means of enforcement violated employers’ free speech rights reflected in NLRA § 8(c).  Section 8(c) essentially provides that the expression or dissemination of any views may not constitute an unfair labor practice, or evidence of an unfair labor practice, absent a threat, force, or promise.  This right to free speech includes the right not to speak, the court explained, as well as the right not to disseminate another’s speech.  Section 8(c) clearly 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.  “How 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)?” asked the court.  “Like the freedom of speech guaranteed in the First Amendment, § 8(c) necessarily protects – as against the Board… – the right of employers (and unions) not to speak.” The court further found that the third means of enforcement was contrary to NLRA § 10(b).  Section 10(b) establishes a six-month limitations period for filing unfair labor practice charges.  The NLRB failed to proffer adequate authority to support its attempt to shorten that period as a consequence of an employer’s failure to post a notice. Having found all three means of enforcement invalid, the court vacated the entire rule.  It concluded that the NLRB would not have wanted to retain the posting requirement portion of the rule without the enforcement provisions, because it rejected the option of relying solely on voluntary compliance in the preamble to the final rule. The final fate of the NLRB rule looks bleak but remains uncertain.  Another case challenging the rule is on appeal in the U.S. Court of Appeals for the Fourth Circuit. AGC will continue to follow developments and keep members informed.  The NLRB has not yet announced how it will respond to the DC Circuit decision, but its earlier decision to put the rule on hold remains in effect.  Accordingly, employers do not need to comply with the Board’s posting rule at this time.  However, covered federal contractors must still comply with similar rules issued by the Department of Labor and FAR Council that also require the posting of NLRA-rights notices. For more information, contact AGC Associate General Counsel Denise Gold at goldd@agc.org.
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