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Court Upholds NLRB Poster Rule, But Finds Fault with Penalty Provisions

03.08.12

The U.S. District Court for the District of Columbia has taken the teeth out of the so-called "Poster Rule." On Mar. 2, 2012, Judge Amy Berman Jackson ruled that the National Labor Relations Board has the authority to promulgate a rule requiring employers to post a notice to employees about their rights under the National Labor Relations Act. However, the Court ruled the penalties associated with failure to post are invalid and violate the NLRA.

The National Association of Manufacturers and the National Right to Work Legal Defense and Education Foundation filed a lawsuit seeking to enjoin the enforcement of the NLRB's "Notification of Employee Rights Under the National Labor Relations Act," which mandates that as of Apr. 30, 2012, private sector employers must post a notice informing employees of their NLRA rights in a "conspicuous place" readily seen by employees and penalizing employers for non-compliance. The rule also proposed that employers found to be out of compliance would be faced with:

  • An unfair labor practice charge in its own right for failure to post; and
  • Tolling of the six month statute of limitations for all ULPs against an employer, not just those ULPs arising from the failure to post the notice.

The lawsuit challenged not only whether the NLRB has the authority under the NLRA to promulgate the rule at issue, but whether the NLRB's action was arbitrary and capricious and whether the rule violated the employer's rights under the First Amendment.

Judge Jackson upheld the NLRB's right to require employers to post the notice, but not the imposition of the rule's strict penalties. In upholding the NLRB's right to promulgate the rule, Judge Jackson stated:

The Board is not attempting to regulate entities or individuals other than those that Congress expressly authorized it to regulate, and it is not extending its reach to cover activities that do not fall within the ambit of the Act. The stated purpose of the Rule is directly related to the policy behind the NLRA.

.....

Therefore, the Court 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. Neither the text of the statute nor any binding precedent supports plaintiffs' narrow reading of a broad, express grant of rulemaking authority.

The Court, however, found fault with the rule's penalty provisions. In essence, the Court concluded that the NLRB exceeded its authority in declaring that an employer's failure to adhere to the posting rule equates to "interference" with an employee's Section 7 rights, and is therefore a ULP. According to the Court, the NLRB must:

... make a specific finding based on the facts and circumstances in the individual case before it that the failure to post interfered with the employee's exercise of his or her rights. The Court is not making an absolute statement that inaction can never be interference; rather this memorandum opinion simply holds that the Board cannot make a blanket advance determination that a failure to post will always constitute an unfair labor practice.

The Court similarly found that the NLRA "does not authorize the NLRB to enact a rule which permits it to toll the statute of limitations in any future ULP involving a job site where the notice was not posted." The decision explains that this rule effectively "establishes tolling as the standard practice unless the employer can prove to the Board that it should not be applied," a standard that "turns the burden of proof on its head. The plaintiff generally bears the burden of proving that equitable tolling should apply in an individual case, but the rule demands that the employer prove that across the board, unlimited extension should not apply." Thus, the Court held, imposition of this remedy is impermissible.

The Court denied outright that the rule violates an employer's free speech rights under the First Amendment. Further, the Court held that the invalid portions of the rule are severable from the legitimate portions, and therefore the rule, as a whole, may stand.

Practically, without the rule's enforcement teeth, it would appear that the NLRB cannot find an independent ULP against an employer for failure to post the notice. That said, failure to post the notice could be considered as part of the facts and circumstances on which the NLRB relies to determine whether certain ULPs have occurred, such as interference with an employee's Section 7 rights.

A separate piece of litigation on this issue remains pending in federal court in South Carolina, and it is unclear what impact, if any, the ruling in this case will have on that proceeding. The deadline to post the notice remains Apr. 30, 2012.

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