April 18, 2012

Federal Appeals Court Temporarily Blocks New NLRB Posting Requirement

Just two weeks before the planned April 30, 2012 effective date, a federal appeals court has temporarily blocked the National Labor Relations Board’s (“NLRB”) controversial rule requiring employers subject to the National Labor Relations Act (“NLRA”) to post notices of employee rights under federal labor law, including the right to join or not join a union.  National Association of Manufacturers v. National Labor Relations Board, No. 12-5068 (D.C. Cir. Apr. 17, 2012).  The decision relieves employers from the posting requirement while the District of Columbia Circuit considers whether the NLRB exceeded its authority in promulgating the rule.

The injunction pending appeal follows the district court’s decision upholding the posting requirement.  A federal judge in the District of Columbia held that the posting rule was within the NLRB’s authority under Section 156 of the NLRA, which grants the Board the authority to make rules and regulations as may be necessary to carry out the provisions of the NLRA.  The district court agreed with the NLRB that the rule was necessary to inform employees of their rights under the NLRA.  Goodwin Procter’s March 7, 2012 Client Alert on the district court’s decision can be found here.

Casting doubt on the district court’s decision, the appeals court recognized as support for its decision to stay the posting rule’s effective date a recent federal district court decision in South Carolina that struck down the posting requirement.  See Chamber of Commerce v. National Labor Relations Board, No. 2:11-cv-02516 (D.S.C. Apr. 13, 2012).  The federal judge in that case held that in promulgating the posting requirement, the NLRB exceeded its authority under the Administrative Procedure Act.  Nothing in the NLRA, the court found, imposes a posting requirement on employers or authorizes the NLRB to issue such a requirement.

In staying the posting rule’s effective date, the appeals court also considered the NLRB’s willingness to postpone operation of the rule during the district court proceedings and the uncertainty surrounding how the posting rule may be enforced.  The appeals court recognized that while the district court upheld the posting rule, it invalidated the provisions that would have (i) rendered a failure to post the required notice an automatic unfair labor practice, and (ii) tolled the statute of limitations for asserting an unfair labor practice charge based on an employer’s failure to post.  The uncertainty surrounding whether the NLRB will cross appeal this decision counseled “further in favor of temporarily preserving the status quo.”

While employers may disregard the NLRB’s posting requirement for now, they should continue to monitor the appellate proceedings in National Association of Manufacturers.  Given that oral argument is currently scheduled for September 2012, the appellate decision on the validity of the posting rule and when, if ever, it should take effect is not expected until the fall.