On May 7, 2013, the United States Court of Appeals for the District of Columbia Circuit struck down the National Labor Relations Board's controversial notice posting rule (see Nat'l Assn. of Mfrs. v. Nat'l Labor Relations Bd.). This development is the latest in the legal saga chronicled in our past Alerts (see here, here and here).

Notice Posting Rule

On August 30, 2011, the NLRB published a regulation requiring that employers notify employees of certain rights under the National Labor Relations Act. 76 Fed. Reg. 54006. The regulation purports to require employers to post a detailed notice conspicuously in the workplace and electronically. The mandated notice informs employees of their rights to organize, form, join or assist a union, bargain collectively, strike and picket, and discuss terms and conditions of employment.

The notice also provides examples of employer conduct that unlawfully infringes NLRA rights and offers information about enforcement and contacting the NLRB. Importantly, the regulation provides that employers who fail to post the notice may be found to have committed an unfair labor practice. Further, the regulation permits tolling of the limitations period for filing unfair labor practice charges if the notice is not posted, and provides that the NLRB may consider an employer's "knowing and willful refusal to comply with the requirement to post the employee notice as evidence of unlawful motive in a case in which motive is an issue."

The regulation—which would affect six million employers nationwide—was promptly challenged by a number of employer representatives. In March 2012, the U.S. District Court for the District of Columbia held that the NLRB could require employers to post the notice, but that the enforcement and tolling provisions exceeded the NLRB's authority delegated by Congress. Although scheduled to go into effect on April 30, 2012, the regulation was temporarily enjoined pending the appeal of the district court's decision to the D.C. Circuit (see previous Alert here).

D.C. Circuit Decision

On May 7, 2013, the D.C. Circuit held that the regulation was invalid. The court first reasoned that Section 8(c) of the NLRA states that the "expressing of any views, argument, or opinion, or the dissemination thereof . . . shall not constitute or be evidence of an unfair labor practice under any of the provisions of [the NLRA], if such expression contains no threat of reprisal or force or promise of benefit." This provision "manifested a congressional intent to encourage free debate on issues dividing labor and management." Also, the court recognized that employers have the First Amendment right "to engage in noncoercive speech about unionization." The court reasoned, "Although § 8(c) precludes the Board from finding noncoercive employer speech to be an unfair labor practice, or evidence of an unfair labor practice, the Board's rule does both."

The court rejected the NLRB's argument that the poster was "government speech," rather than the employer's speech, explaining that the right to free speech includes the right to choose not to speak. In other words "the right to disseminate another's speech necessarily includes the right to decide not to disseminate it." The court further held that the regulation's tolling of the limitations period impermissibly expanded the limitations period established by statute. Concluding that all three means for enforcing the posting requirement were invalid, the court held that the regulation, as a whole, could not stand. The court declined to decide whether the NLRB lacked the authority to issue the posting requirement of the rule. However, two concurring judges—a majority of the court—also concluded that the rule exceeded the Board's rulemaking authority under the NLRA.

Notably, the court found that the regulation was not affected by the NLRB quorum issue recently addressed by the D.C. Circuit, because the NLRB had at least three validly appointed members at the time the notice posting rule was filed with the Office of the Federal Register (see Noel Canning v. Nat'l Labor Relations Bd. ).

Conclusion

The D.C. Circuit's decision establishes that the NLRB posting rule is without force or effect, and, therefore, employers are not required to comply. It remains to be seen whether the NLRB will seek review by the U.S. Supreme Court. The decision could also lead to challenges of other legally mandated postings. Further, the decision may be used to challenge tolling arguments in other contexts, such as where courts have equitably tolled limitations periods when employers failed to post notices required under Title VII or the Age Discrimination in Employment Act.

Note that, in April 2012, the U.S. District Court for the District of South Carolina held that the NLRB lacked authority to promulgate the notice posting rule. The appeal of that case is pending before the Fourth Circuit.