Today a three-member panel of the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion vacating the National Labor Relations Board’s notice-posting rule issued by the Board in August 2011. Under the NLRB’s notice-posting rule, all private-sector employers subject to the National Labor Relations Act would be required to post a notice to employees informing them of their rights under the Act. The court struck the rule because it found that two of the rule’s enforcement mechanisms violated employers’ free speech under Section 8(c) of the National Labor Relations Act, and that the third enforcement mechanism violated the Act’s limitations period in Section 10(b) for filing unfair labor practice charges. 

Shortly after the rule was promulgated, employer groups filed suit challenging it, and the Board initially postponed implementation until April 30, 2012. On Friday, March 2, 2012, in National Association of Manufacturers v. NLRB, Case No. 11-CV-1629 (D.D.C. Mar. 2, 2012), the District Court struck down certain elements of the rule, but held that the NLRB did have the authority to require private-sector employers to post these notices, and that the NLRB could consider an employer’s "knowing and willful" failure to post the notice as evidence of an unlawful motive. The plaintiffs challenging the rule appealed that decision to the D.C. Circuit Court of Appeals.

Then, on April 13, 2012, in Chamber of Commerce of the United States v. NLRB, Case No. 2:11-CV-02516-DCN (D.S.C.), a separate District Court ruled that the Board did not have the authority to issue the notice-posting rule. Following that decision, the D.C. Court of Appeals granted an injunction, staying implementation of the rule pending the appeals process. Soon after the issuance of the injunction in April 2012, the Board announced that it would again delay implementation of the rule "pending resolution of the issues before the court. 

In the decision issued today in National Association of Manufacturers v. NLRB, the D.C. Circuit found it unnecessary to decide the issue of whether "§ 6 of the Act gave the Board authority to promulgate its posting rule." Instead, the court began its analysis with § 8(c) of the Act, which states:

The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this [Act], if such expression contains no threat of reprisal or force or promise of benefit.

Relying on Supreme Court decisions analyzing the scope of § 8(c), the D.C. Circuit noted:

"From one vantage,” the Court in Chamber of Commerce explained, “§ 8(c) ‘merely implements the First Amendment,’ in that it responded to particular constitutional rulings of the NLRB.” Id. at 67 (quoting Gissel Packing, 395 U.S. at 617). “But,” the Court added, § 8(c)’s “enactment also manifested a ‘congressional intent to encourage free debate on issues dividing labor and management.’” Id. (quoting Linn v. Plant Guard Workers, 383 U.S. 53, 62 (1966)). And it has been suggested that § 8(c) not only protects the right of free speech under the First Amendment, but also “serves a labor law function of allowing employers to present an alternative view and information that a union would not present.” Healthcare Ass’n of N.Y. State v. Pataki, 471 F.3d 87, 98 (2d Cir. 2006).

Although § 8(c) precludes the Board from finding noncoercive employer speech to be an unfair labor practice, or evidence of an unfair labor practice, the Board’s rule does both.

The D.C. Circuit found unpersuasive the Board’s argument that the notice-posting rule does not violate "§ 8(c) because the poster is the Board’s speech, not the speech of any employer."

The language of § 8(c) explicitly covers more than just the “expressing” of the speaker’s views. It covers as well the “dissemination” of “any views, argument, or opinion,” as long as the “written, printed, graphic, or visual” material disseminated is not coercive. 29 U.S.C. § 158(c).

The right to disseminate another’s speech necessarily includes the right to decide not to disseminate it. First Amendment law acknowledges this apparent truth: “all speech inherently involves choices of what to say and what to leave unsaid.”

The Board attempted to distinguish its poster from other decisions holding that the government cannot compel individuals to express certain views by claiming that the Board’s message is "non-ideological" because it "merely recites the employee rights set forth in the National Labor Relations Act (and in court and Board interpretations of the Act)." Again, the the court disagreed: "The right against compelled speech is not, and cannot be, restricted to ideological messages."

Plaintiffs here, like those in other compelled-speech cases, object to the message the government has ordered them to publish on their premises. They see the poster as one-sided, as favoring unionization, because it “fails to notify employees, inter alia, of their rights to decertify a union, to refuse to pay dues to a union in a right-to-work state, and to object to payment of dues in excess of the amounts required for representational purposes.” Nat’l Ass’n of Mfrs. Br. 38; see also 76 Fed. Reg. at 54,022 (discussing comments). The Board responds that it was entitled to make “editorial judgments” about what to put in and what to leave out, NLRB Br. 68, and that “if an employer is concerned that employees will get the wrong impression, it may legally express its opinion regarding unionization as long as it does so in a noncoercive manner,” 76 Fed. Reg. at 54,022. Yet even in cases in which the message was other than one the government had devised, a “compelled-speech violation” occurred when “the complaining speaker’s own message was affected by the speech it was forced to accommodate.” Forum for Academic & Institutional Rights, 547 U.S. at 63."

As such, the court concludes that the Board’s rule violates § 8(c) because it makes an employer’s failure to post the Board’s notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus–i.e., evidence of an unfair labor practice.

The D.C. Circuit also found that the rule violated the Act because the Board’s third method of enforcing the rule by tolling the Act’s limitations period for filing unfair labor practice charges is unsupported by "any authority suggesting that the 1947 Congress intended to allow § 10(b) to be modified in the manner of the Board’s tolling rule." Accordingly, the court rejected the Board’s argument that it could equitably toll the limitations period.

Because all of the enforcement mechanisms for the notice-posting rule are invalid, the court struck down the entire rule finding that the Board would not have issued a posting rule that depended solely on voluntary compliance. As such, the D.C. Circuit found it unnecessary to decide whether the Board lacked the regulatory authority to issue a notice-posting rule. However, two judges issued a concurring opinion stating that they would also hold that the Board is without authority to promulgate the posting rule under Section 6 of the Act.

Of further note, the court did assess whether the Board had a quorum to Act under New Process Steel, L.P. v. NLRB, 130 S.Ct. 2635, 2640 (2010), when it issued the notice-posting rule given the D.C. Circuit’s recent decision in Noel Canning v. NLRB, 705 F.3d 490 (D.C. Cir. 2013). Although Member Becker participated in promulgating the rule, the court found that the Board had authority to act even if Member Becker’s appointment was constitutionally invalid because the other three members at the time–Wilma Liebman, Mark Pearce, and Brian Hayes–had been confirmed by the Senate when the NLRB sent the rule to the Office of the Federal Register.

Although the D.C. Circuit invalidated the notice-posting rule, employers should continue to monitor it because the issue is not yet settled. The NLRB appealed the decision in Chamber of Commerce of the United States v. NLRB to the Fourth Circuit, and the decision in that case is still pending. 

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.