Oral arguments are scheduled today in National Association of Manufacturers et al. v. National Labor Relations Board et al., case number 12-5068, in the U.S. Court of Appeals for District of Columbia Circuit. The National Labor Relations Board will ask the Court to reverse a lower court decision striking down significant parts of its rule requiring all employers to hang posters in the workplace about employees' rights to unionize. Likewise, employer groups will ask the Court to follow the rationale of a South Carolina court decision which would invalidate the rule in its entirety.
In a March 2, 2012 order, District Court Judge Amy Berman Jackson ruled both that the NLRB had the authority to issue a rule requiring private-sector employers to post notices informing employees of their rights under the Act, and that the NLRB could consider an employer's "knowing and willful" failure to post the notice as evidence of an unlawful motive. However, she struck down the portions of the NLRB's rule that would automatically deem an employer's failure to post the notice an unfair labor practice and that would toll the statute of limitations for unfair labor practice charges filed against employers that failed to post the notice. Subsequently, the District Court for the District of South Carolina issued a decision ruling the Board lacked the authority to promulgate the rule. On April 17, 2012, the D.C. Appeals court enjoined implementation of the rule pending resolution of this appeal.
Law360 ran a piece today including some of my thoughts that the long-term significance of these cases will be the extent to which they clarify the Board's ability to engage in broad rulemaking without legislative action:
"Certainly if the board's notice posting rule is upheld, there will be new obligations that employers will have to comply with, but it will be also be a court endorsement of fairly broad rulemaking authority on the part of the board," Seth Borden of McKenna Long & Aldridge LLP said.
The piece included similar sentiments from others. Amanda Wood, of the National Association of Manufacturers, a litigant in the case:
argued the case could have broad implications for employers, saying, "If the board is permitted to issue a rule that requires a poster, what will come out of the board next in terms of rulemaking? If this is overstepping and they're permitted to do it, where will they go next?"
Harold R. Weinrich of Jackson Lewis LLP explained some of the "political" and practical impact thus:
"This rulemaking initiative is very important to the NLRB, and they invested a lot of time, energy, money and resources in it, so obviously if it is not successful, it is going to be a big blow to them," Weinrich said. "If it is successful, we shall see more of it, and if it is not, then the NLRB will go back to its more typical adjudication of issues on a case by case basis."
Short term, of course, the rule remains enjoined. The November elections will play an intervening role as well. If Governor Romney wins the White House, it is almost certain the Board he appoints would rescind this rule; and, if President Obama is re-elected, this matter will continue to wind through the courts for final determination.
In the meantime, federal contractors should be aware that these developments have no impact on their obligation to post a similar notice as required by Executive Order 13496.