Judge upholds Board's authority to issue the rule requiring notice, but strikes down penalty provisions.

In the first of two anticipated rulings on the issue, Judge Amy Jackson of the U.S. District Court for the District of Columbia issued a decision regarding the National Labor Relations Board's (the Board's) final rule (the Rule) requiring all employers subject to the Board's jurisdiction—the vast majority of employers doing business in the United States—to post a notice in the workplace informing employees of their right, among other things, (1) to"[o]rganize a union"; (2) to "take action . . . to improve [their] working conditions by, among other means, raising work-related complaints directly with [their] employer or with a government, and seeking help from a union"; and (3) to "strike and picket."

Morgan Lewis has been participating in the NLRB notice-posting litigation before Judge Jackson on behalf of 36 members of Congress, including John Kline, Chairman of the House Committee on Education and the Workforce, as amici curiae.

In her March 2 ruling in National Association of Manufacturers v. NLRB, Judge Jackson upheld the Board's right to issue the rule, but struck down two key proposed enforcement mechanisms for failure to post the notice—the tolling of the statute of limitations and making an employer's failure to post the notice an unfair labor practice.

Background

The National Labor Relations Act (NLRA) gives employees the right to "form, join, or assist" unions, to bargain collectively with their employers, or to refrain from engaging in such activities. Although less than 7% of private sector employees are represented by unions, the NLRA's protections extend to nonunion employees as well as union-represented employees.

Under the Rule, which is set to go into effect on April 30, 2012, the required notice must be posted in the same place where other notices are posted. The Rule also requires that the notice be posted on an employer's intranet or Internet site, if the employer customarily communicates with its employees by such means. The Rule states that failure to post the notice could have three adverse affects: (1) it could be considered an unfair labor practice under Section 8(a)(1) of the NLRA; (2) failure to post the required notice could toll the six-month statute of limitations for filing unfair labor practices; and (3) the NLRB could use the failure to post the notice as evidence of an employer's unlawful motive in unfair labor practice cases.

Judge Jackson's Decision

The court first addressed the Board's authority to issue the Rule, finding that although the NLRA does not—like many employment-related statutes-provide for such a notice posting, it "cannot find that . . . Congress intended to preclude the Board from promulgating a rule that requires employers to post a notice informing employees of their rights under the [NLRA]." The court held that the right to require the notice was within the NLRA's "broad, express grant of rulemaking authority."

However, Judge Jackson struck down the portion of the Rule making failure to post the notice a separate unfair labor practice, finding that such a blanket rule was impermissible. Judge Jackson held that while the Board could find that a failure to post the notice is in fact an unfair labor practice, it could only do so after looking at the facts of each case and determining whether the failure to post the notice interfered with employee rights in that particular case.

Judge Jackson also struck down the provision of the Rule that would have tolled the NLRA's six-month statute of limitations if an employer failed to post the notice. She found that Congress "did not leave a gap for the [Board] to fill with respect to the statute of limitations." However, Judge Jackson again left open the possibility of tolling in a particular case, stating that whether to toll the statute of limitations must be a "case specific" decision.

The court also upheld the portion of the Rule providing that failure to post the notice can be viewed as evidence of an employer's unlawful motive in cases in which motive is at issue. Judge Jackson found that provision of the rule "does not make a blanket finding that will govern future individual adjudications or create a presumption of anti-union animus wherever an employer fails to post the provision."

Impact: Not the Last Word

Judge Jackson's decision is the first decision issued regarding the Rule; another case challenging the Notice provision remains pending in the U.S. District Court for the District of South Carolina. Briefing and oral argument are complete in that case, and a decision is expected in advance of the Rule's April 30 implementation date. In addition, Judge Jackson's ruling has already been appealed to the U.S. Court of Appeals for the D.C. Circuit, and the plaintiffs are seeking injunctive relief to stop the Rule from becoming effective while the appeal is pending. For the time being, employers should plan to comply with the Rule and post the notice beginning on April 30, absent a stay or a contrary ruling in the South Carolina case.

As noted above, Morgan Lewis has been participating in the NLRB notice-posting litigation before Judge Jackson, representing 36 members of Congress including John Kline, Chairman of the House Committee on Education and the Workforce, as amici curiae. Morgan Lewis is also representing the same parties in the separate notice-posting lawsuit pending in South Carolina. Our amicus brief filed in the D.C. litigation is available here; our amicus brief filed in the South Carolina litigation is available here.