March 6, 2012Client Alert

Federal District Court Rules NLRB’s Poster Okay, But Proposed Penalties for Not Posting are an Overreach

Recently, the National Labor Relations NLRB (NLRB) promulgated a rule that required virtually all employers in the United States to post a Notice advising employees of their rights under the National Labor Relations Act (NLRA). The NLRB’s rule was challenged in court and the first court to hear the challenge, a district court in the District of Columbia, ruled on March 2 the poster can be required, but that the NLRB’s proposed penalties relating to failure to post were unlawful. The case may be appealed, and both sides of the dispute may be disappointed by aspects of the ruling. Also, the NLRB will need to issue a directive as to whether employers need to post the Notice by April 30, 2012, or postpone that mandate given the split decision and the likelihood of appeal. We predict the NLRB will mandate that the Notice goes up by April 30.


There were two central legal challenges. The first legal challenge questioned the NLRB’s authority to issue the Rule which required the Notice and penalties. The district court found the NLRB was within its authority to mandate employers to post the Notice that advises employees of their rights under the NLRA. The Congress did not prohibit such an action within the NLRA and the NLRB was essentially engaging in an educational exercise, according to the court. However, when it came to whether the NLRB could deem an employer’s failure to post to be an automatic unfair labor practice (ULP) (as the NLRB’s rule stated), the court held this punitive measure exceeded the NLRB’s authority. The court noted that the NLRA allows an employer to express its “views, argument, or opinion” as long as there is no “threat of reprisal or force or promise of benefit.” As the court reasoned, since the Congress allows the employer to proactively express its views on NLRA subjects, it follows that Congress wouldn’t intend to punish an employer with an automatic ULP by its mere failure to supply information about the NLRA.


In addition, the court held that the NLRB’s attempt to impose an equitable tolling provision on any employer who failed to post was another overreach. “Equitable tolling” is the extension of a statute of limitations period. Here, the NLRB wanted to forgive employees from having to file a complaint with the NLRB within six (6) months of the alleged wrongdoing (the usual statute of limitations period) if the employer failed to post. This court ruled the NLRB lacked authority under the NLRA to impose unilaterally this tolling provision.  However, the court noted that the NLRB, in individual cases, could decide on whether equitable tolling is appropriate.


The second legal challenge concerned whether the mandated Notice violated an employer’s free speech rights (namely, that it compels employers to speak against their will). The court rejected this argument and found the Notice was entirely speech by the NLRB, and not the employer. Since the Notice is labeled as from the NLRB and so states, the court was comfortable that employees would understand the Notice was from the government and government speech, and not from the employer or its speech. Also, the court noted that employers are free to provide their own communication to their employees on the same subjects in the Notice.


So what’s next? The NLRB and the business groups involved in this case will decide whether to appeal,  and that is very likely. The NLRB will have to decide and provide notice whether the Notice of Rights poster must be posted in work places by April 30, 2012 as the NLRB previously announced. We expect the NLRB to continue its mandate that the Notice be in place by April 30.  As we noted in our e-alerts on this same subject in August and October, 2011, employers should consult with their legal counsel about a communication plan with their employees ahead of or simultaneous with the placement of the NLRB mandated Notice. Click here for our prior e-alerts [8/29/2011] [10/6/2011]. This is strongly recommended given the media attention surrounding this issue and given the relative lack of knowledge on rights and responsibilities on union issues these days in most work places.

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