Notice Posting Decision Disappoints Employers

On March 2, 2012, a federal trial judge in the District of Columbia issued a highly-anticipated ruling on the National Labor Relations Board’s (NLRB) controversial notice posting rule. The court held that the NLRB did not exceed its statutory authority by requiring employers to post its “Notification of Employee Rights under the National Labor Relations Act.” In language that seems at first favorable to employers, the court ruled that a failure to post is not automatically an unfair labor practice and does not automatically toll the statute of limitations in unfair labor practice actions. A closer reading, however, reveals that the court opened the door for the NLRB to find, on a case-by-case basis, violations and tolling for failure to post, thus allowing the Board to accomplish by decision what it cannot do by rulemaking. National Association of  Manufacturers v. NLRB, No. 11-1629 (ABJ), U.S. District Court for the District of Columbia (March 2, 2012).

Factual Background

On August 30, 2011, the NLRB promulgated its Final Rule, “Notification of Employee Rights under the National Labor Relations Act,” in the Federal Register. The National Association of Manufacturers (NAM) and National Right to Work Legal Defense and Education Foundation (NRTW) brought separate actions to invalidate the Rule, against the NLRB and its members and General Counsel. These actions were later consolidated. They alleged that the NLRB lacked the authority: (1) to promulgate and enforce the notice posting rule under Section 6 of the National Labor Relations Act (NLRA); (2) to require employers to post a notice absent the filing of a charge or petition; (3) to deem the failure to post to be an unfair labor practice; and (4) to toll the statute of limitations for filing an unfair labor practice charge. They also argued that the Rule violates their First Amendment rights.

Legal Analysis

The court first considered whether the Board had the authority under the NLRA to promulgate a rule that requires all employers to post a notice of employee rights.  The court concluded that it “cannot find that in enacting the NLRA, Congress unambiguously intended to preclude the Board from promulgating a rule that requires employers to post a notice informing employees of their rights under the Act.” The court also declined to find the NLRB’s promulgation of the notice posting provision to be arbitrary and capricious.

The court next considered whether the Board had the authority to promulgate Section 104.210 of the Final Rule, which deems a failure to post to be an unfair labor practice under the NLRA. The court held that it did not. The court concluded that “the Board cannot make a blanket advance determination that a failure to post will always constitute an unfair labor practice,” but determined that the Board could make this determination on a case-by-case basis. Thus, the court held that the Board exceeded its authority under the NLRA when it promulgated a rule that failure to post the required notice would automatically be an unfair labor practice.

The court came to a similar conclusion with regard to Section 104.214(a) of the Rule, which extends the statute of limitations for unfair labor practice proceedings arising out of the failure to post and which applies to all unfair labor practice actions against employers where the notice was not posted. The court found that the NLRA does not authorize the Board to enact a rule that permits it to automatically toll the statute of limitations in any future unfair labor practice action involving a job site where the notice was not posted. Again, however, the court opened the door for the NLRB to find that tolling is appropriate on a case-by-case basis where the notice is not posted.

Finally, the court refused to overturn the notice posting rule on First Amendment grounds.

Practical Impact

According to Ben Glass, a shareholder in Ogletree Deakins’ Charleston, South Carolina office: “While it is a step in the right direction, the court’s decision leaves employers little to celebrate. The notice posting requirement still stands. While failure to post is not an automatic unfair labor practice and does not automatically toll the statute of limitations, the decision would allow those penalties on a case-by-case basis. It seems likely that the NLRB will take that as a green light to impose the remedies by case law, if not by rulemaking.” It should be noted, however, that another challenge to the Rule, which was filed by the U.S. and South Carolina Chambers of Commerce, is still pending in U.S. District Court in Charleston.