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Federal Court Partially Strikes Down Controversial NLRB Posting Rule

The United States District Court for the District of Columbia issued an important ruling on Friday (March 2, 2012) in a lawsuit challenging the National Labor Relations Board’s (“NLRB”) recent issuance of certain posting rules.  The Case is National Association of Manufacturers v. National Labor Relations Board. 

The Background

In 2011, the NLRB issued a Final Rule entitled “Notification of Employee Rights under the National Labor Relations Act.”  The Final Rule was originally planned to be effective as of November 14, 2011, but the effective date was later postponed to April 30, 2012.  Under the Final Rule, employers are required to post a large (11” x 17”) notice informing employees of their rights to organize under the National Labor Relations Act (“NLRA”).  Federal contractors already have posting requirements for this notice.

The Final Rule

The Final Rule contains two major parts.  As noted above, Part A requires all employers to post a notice informing employees of their rights to organize under the NLRA and outlining illegal conduct by employers.  Part B provides that the failure to post the notice could lead to the NLRB expanding the statute of limitations for a violation by an employer. Normally six months, the statute of limitations could, at the NLRB’s discretion, be tolled (i.e., lengthened) potentially without limitation.  In addition, the Final Rule provides that the failure to post the notice could be considered by the NLRB as “evidence of unlawful motive.”  Thus, the NLRB could use the failure to post the notice as evidence that the employer planned to violate the NLRB on any complaint brought to the NLRB.  Not surprisingly, employers did not look kindly on Part B.

The Litigation

Several employer and industry groups filed suit and argued that the NLRB did not have the authority to issue the Final Rule.  In the case addressed on Friday, the court faced two primary issues in the litigation:  (i) whether the NLRB had the authority to issue the Final Rule; and (ii) whether the NLRB has the authority to put Part B – the enforcement provisions – in the Final Rule. 

The Ruling

Friday’s opinion, on the surface, is a split decision.  The court held the NLRB did have the authority to require employers to post the notice but concluded the NLRB did not have the authority to make “a blanket advance determination that a failure to post will always constitute an unfair labor practice.”  As the court noted, “Since Congress prohibited the [NLRB] from considering an employer’s express statement of its views to be an unfair labor practice, it follows that it did not intend that an employer’s mere failure to supply information would be designated as one.”  The court also struck down the NLRB’s right to expand the statute of limitations for an employer who fails to post the poster.  “[T]he NLRA does not authorize the Board to enact a rule which permits it to toll the statute of limitations in any future unfair labor practice….”  Accordingly, in a victory for employers, the court essentially eliminated the enforcement provisions in Part B of the Final Rule. 

The Next Steps

The requirement to post the notice remains an obligation for employers, and employers would be wise to comply with this requirement.  However, employers can – for the moment – rest assured that the failure to post the notice will not automatically mean that the time for complaints by employees will exceed six months.  Employers can also be assured that there will not be an automatic finding by the NLRB that they have committed an unfair labor practice merely by failing to post the notice. 

Employers should be aware, however, that the court did not prevent the NLRB from concluding in an individual case that the failure to provide the notice may not be considered.  Indeed, it is possible that the NLRB may seek to find an unfair labor practice charge in every case it can.  Thus, employers should not assume that the failure to post the notice will have no impact. 

While today’s decision is significant, the decision will almost surely be appealed and may end up before the United States Supreme Court, especially because a similar lawsuit challenging the Final Rule remains pending in a federal court in South Carolina.  Whatever happens, we’ll be watching.  Stay tuned.