rounded corners

NLRB Workers’ Rights Posting Requirement is Unlawful, Federal Judge in SC Holds

Date: 4.16.2012

The National Labor Relations Board does not have the authority to require that all employers covered by the National Labor Relations Act conspicuously post a notice informing employees of their right to organize, providing contact information for the NLRB, and conveying information about enforcement procedures, a federal district court judge in South Carolina has ruled in Chamber of Commerce v. NLRB, No. 11-cv-2516 (D.S.C. Apr. 13, 2012).  Granting summary judgment to the Chamber of Commerce of the United States and the South Carolina Chamber of Commerce, Chief Judge David C. Norton found the Board, in promulgating its final rule, exceeded its authority, in violation of the Administrative Procedure Act.
 
This is the second federal court ruling on the NLRB’s notice posting requirement.  In the first, Judge Amy Berman Jackson, in National Association of Manufacturers v. NLRB, No. 11-1629 (D.D.C. Mar. 2, 2012), held the NLRB had the authority to promulgate the posting rule, though she found some remedial provisions exceeded the Board’s authority.  (For more information on that decision, see our article, Judge Finds NLRB Workers’ Rights Posting Requirement Lawful, But Strikes ULP and Tolling Provisions.)  This decision has been appealed to the U.S. Court of Appeals for the District of Columbia Circuit.

Background

The Board issued its final rule on “Notification of Employee Rights under the National Labor Relations Act” on August 25, 2011. The rule, effective April 30, 2012, requires all employers covered by the NLRA to conspicuously post the new NLRB notice where other employment notices are customarily posted.  Failure to post the notice may, for example, be considered evidence of unlawful motive in certain proceedings before the NLRB.  (For more information about the new rule, see our article, New Posting Required: Labor Board Rule on Notification of Employee Rights under Labor Act.)

Authority

The plaintiffs in the South Carolina case argued the NLRB’s final rule violates the Administrative Procedure Act (“APA”) because the Board lacks authority to issue the rule either under Section 6 of the NLRA or the “gap” left by the absence of a notice-posting provision in the Act. 

Section 6 confers rulemaking authority on the Board. It states:

The Board shall have authority from time to time to make, amend, and rescind, in the manner prescribed by the Administrative Procedure Act, such rules and regulations as may be necessary to carry out the provisions of this Act.

Judge Norton agreed with the plaintiffs and ruled that the Board had no authority to promulgate and effectuate the final rule based on the plain language and structure of the Act.  He said, “[T]he structure of the Act places the Board in a reactive role in relation to employers covered by the Act. Finding that the challenged rule is ‘necessary’ to carry out other provisions of the Act would require the court to ignore ‘the statutory language as a whole, … and allow the Board to create rules in any area in which Congress did not specifically withhold the Board’s power.”
 
Moreover, Judge Norton found that Congress, while leaving the NLRA silent on the issue, has inserted at least eight additional notice requirements in federal labor laws since 1934.  Because Congress clearly knows how to include a notice-posting requirement in a federal labor statute when it so desires, the Judge stressed, “[w]here Congress has consistently made express its delegation of a particular power, its silence is strong evidence that it did not intend to grant the power.”

The South Carolina Court has not yet enjoined the enforcement of the NLRB rule.  If an injunction is issued, it remains unclear whether it will be limited to South Carolina.  It is possible that the Board will seek to stay the South Carolina judgment or other action will be taken by the parties either with respect to that judgment or the case in the District of Columbia. As of this writing, the Board has not commented.  Given the confusion created by the conflicting decisions, it is possible that the Board might stay or postpone enforcement of the posting rule on its own pending further court action.

* * *

This is only a brief summary of the order in Chamber of Commerce v. NLRB.  The conflicting district court decisions likely will drive the NLRB to clarify employers’ legal obligations before April 30.  Meanwhile, employers should consider proceeding with management training on NLRA employer and employee rights and other preventive and compliance strategies while monitoring whether the requirement’s April 30th effective date changes based on further Board or court action.  If you have questions about the NLRB notice posting, the legal challenges, the effective date, what is required to comply with the law if implemented or a broader legal compliance program, please do not hesitate to contact the Jackson Lewis attorney with whom you regularly work.