Federal District Court Strikes Down NLRB’s Posting Rule

On April 13, 2012, a federal district court in South Carolina invalidated the National Labor Relations Board’s (NLRB) notice posting rule, which would have required most employers to post a notice regarding the rights of employees to organize and join a union. The court held that the NLRB “exceeded its authority in violation of the Administrative Procedures Act.” What remains to be seen is whether the NLRB will now voluntarily delay implementation of the notice posting rule until the resolution of all appeals, or whether the plaintiffs will be forced to apply to the court for a permanent injunction to prohibit enforcement of the rule on a nationwide basis. Chamber of Commerce of the United States v. NLRB, No. 2:11-cv-02516-DCN, U.S. District Court for the District of South Carolina (April 13, 2012).

Ogletree Deakins brought the lawsuit on behalf of the U.S. Chamber of Commerce and the South Carolina Chamber of Commerce. According to Gray Geddie, Ogletree Deakins’ former chairman and the attorney who argued the case, the decision both vindicates the rights of employers and constrains the power of the NLRB. “In striking down the rule, the court preserved the role of the NLRB as a quasi-judicial arbiter of employee rights, rather than an advocate for unions and unionization,” he said.

In its opinion, the court determined that Congress had limited its grant of authority to the NLRB. The court stressed that the National Labor Relations Act (NLRA) does not expressly authorize the NLRB to promulgate a posting rule, in light of multiple congressional amendments to the NLRB and in contrast to cases in which Congress has expressly authorized other agencies to require the posting of employee notices. Accordingly, the court held that the Board lacked the authority to promulgate the rule under the NLRA’s plain language, structure, and legislative history.

The court’s opinion conflicts with a decision issued in March by a federal district court in Washington, D.C. that upheld the NLRB’s authority to issue the notice posting rule, but limited the remedies available to the Board under the rule for failure to post. The trade associations and the NLRB have appealed that decision to the D.C. Circuit, where the business groups have requested a stay of enforcement pending appeal.