Since the National Labor Relations Board (“NLRB”) issued its highly controversial new rule requiring private employers to inform employees of their right to form and support a union under the National Labor Relations Act (“NLRA”), employers and employer-friendly organizations have filed multiple lawsuits challenging the rule. One federal court has now weighed in on the rule’s legality. On March 2, 2012, in National Association of Manufacturers v. NLRB, a Washington D.C. district court held that the NLRB had statutory authority to promulgate the rule, but struck down the unfair labor practice and equitable tolling provisions of the rule as violative of the NLRA. Despite the somewhat favorable ruling, employers must still comply with the new notice posting rule by April 30, 2012.

New Notice Posting Rule

The new notice posting rule requires that employers subject to the NLRA, which covers virtually every private employer, post an 11-by-17-inch notice to employees describing their rights under the NLRA. The detailed notice explains to employees their rights under the NLRA to organize and bargain collectively with their employer, to engage in other protected concerted activity or to refrain from engaging in such activity. The notice also provides a comprehensive list of conduct by employers and unions that the NLRA prohibits. In addition to physically posting the notice, employers who regularly communicate notices to employees through their Internet or intranet pages must publish the new notice to employees through those means. Further, the notice requires employers whose workforce includes 20 percent or more workers who are not proficient in English and speak another language to also post the notice to employees in the employees’ other language.

Most significantly, the rule imposes three distinct and severe penalties on employers that do not comply with its mandates. First, the rule makes it an independent, actionable unfair labor practice for an employer to fail to comply with its posting requirements. Second, the rule authorizes the NLRB to make an untimely unfair labor practice charge timelywhen the employer has failed to post the requisite notice. Third, the rule encourages the NLRB to consider an employer’s knowing and willful refusal to comply with the posting requirement to be evidence of unlawful anti-union animus in adjudicating unfair labor practice charges.

Court Challenge to Notice Posting Rule

In National Association of Manufacturers v. NLRB, No. 11-cv-1629, plaintiff-employers that would have been required to post the new notice filed a lawsuit against the NLRB seeking to prevent enforcement of the rule. The court first considered whether the NLRB has the authority under the NLRA to promulgate the notice posting rule and whether the NLRB’s rulemaking was arbitrary and capricious.

The court held the NLRB had authority to promulgate the rule, reasoning that the NLRA expressly grants the NLRB broad rulemaking authority to implement the statute. The court rejected the plaintiffs’ arguments that the language of the NLRA and the cases cited supported a narrow reading of the NLRB’s rulemaking authority. Additionally, the court refused to find the NLRB’s promulgation of the rule to be arbitrary and capricious, agreeing with the NLRB’s argument that many employees are unaware of their NLRA rights and the notice posting requirement is a reasonable means of raising awareness of such rights.

After establishing the NLRB’s authority to promulgate the rule, the court considered the enforceability of two of the rule’s failure to post provisions. The court invalidated the provision, which made failure to post the notice a per se unfair labor practice, holding that the NLRB lacked the authority to promulgate such a rule. The court reasoned that the rule did not differentiate between the situation where an employer failed to post the notice with the purpose of influencing employee organizing and the situation where an employer simply declined or failed to post the notice. The court clarified that the NLRB could find that failure to post the notice constitutes an unfair labor practice but only after making a specific finding based on the facts and circumstances of the individual case that failure to post the notice interfered with employees’ exercise of their NLRA rights.

Additionally, the court struck down the provision that allowed an employer’s failure to post the notice to automatically toll the statute of limitations for the filing of any unfair labor practice charge. The court reasoned that Congress mandated a six-month statute of limitations for the filing of an unfair labor practice charge and the NLRB did not have authority to substantially amend the NLRA’s statute of limitations through the rule’s tolling provision.

Unfortunately for employers, the court specifically noted that the provision that allows the NLRB to consider an employer’s knowing and willful refusal to comply with the posting requirement to be evidence of unlawful anti-union animus in adjudicating any unfair labor practice charge was lawful. The court reasoned that the provision is valid because it neither creates an unfair presumption, nor does it relieve the NLRB of making a case-by-case determination.

Impact of Decision for Employers

While this decision is somewhat favorable for employers, its impact remains to be seen. An appeal of the decision has already been threatened and additional court challenges are pending in other jurisdictions. Employers should stay informed of similar court decisions and should expect for the NLRB to respond in some way, possibly by modifying the rule consistent with the court’s recent decision. Of course, once posted, the new notice will likely result in increased union organizing activity. Accordingly, employers should ensure their union-related and general employment policies are up-to-date and lawful. Employers should also invest time in re-training Human Resources and management-level employees to make sure they are familiar with the NLRA, other key employment laws and the employer’s various employment policies. Employers should continue to communicate with employees to reinforce their right to oppose unionization. Most importantly, however, employers must act now to not only comply with the new rule before it goes into effect April 30, 2012, but to also prepare their workplace for increased union activity and to offset the potential impact of the new notice.