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In August 2011, the National Labor Relations Board (Board) promulgated a controversial rule, now scheduled to become effective April 30, 2012, requiring employers to post notices informing employees of their rights under the National Labor Relations Act (NLRA) and providing for certain penalties if employers failed to comply. (Click here to read our original legal update concerning this rule). Last month, a Washington, D.C. federal court invalidated the penalty provisions in this rule. Now, in another significant development for employers, a different federal court has struck down the entire rule.
Shortly after the Board enacted this rule, multiple groups—including the United States Chamber of Commerce—filed lawsuits seeking an injunction to prevent the Board from enforcing it. In the U.S. Chamber's lawsuit, a federal court in South Carolina ruled that the Board does not have the authority to require employers to post a notice of employees' right to unionize, and it exceeded the authority granted to it by Congress by enacting the rule that requires employers to do so. Specifically, the court ruled that the Board lacks authority under the NLRA to mandate that employers post a notice about employees' right to unionize, as the NLRA does not impose on employers a duty to post a notice of employees' right to organize and gives the Board only a reactive role in dealing with employers covered by the NLRA. On this basis, the court enjoined the Board from implementing and enforcing the posting rule.
The Board will most likely appeal the court's ruling, but for the time being, the Board is precluded by law from implementing the rule to the extent it requires South Carolina employers to post this notice (and, based on last month's decision, it may not impose the rule's penalties on Washington, D.C. employers). Ultimately, a federal Circuit Court of Appeals or the Supreme Court will likely decide whether the Board may implement its posting rule and its penalty provisions. In the meantime, this ruling is another significant win for employers, giving employers reason to consider whether they might refuse to post the notice in anticipation of similar rulings in jurisdictions in which they do business. In the meantime, if you have questions about the proposed posting rule or how this development affects your business, contact any of Faegre Baker Daniels' labor lawyers.
