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The Fourth Circuit Invalidates the NLRB’s Posting Requirement While Limiting the Scope of its Rulemaking Authority

Posted in NLRB

On Friday, June 14, 2013, the National Labor Relations Board (NLRB) lost yet another challenge to its proposed rule in September 2011 requiring employers to display a poster informing employees of their rights to organize and to be free from employer interference with such rights.  As we wrote about here, the D.C. Circuit Court of Appeals enjoined the enforcement of this rule prior to its initial effective date of April 30, 2012.

In May of this year, the D.C. Circuit (opinion here) invalidated the posting rule, holding that it violated Section 8(c) of the NLRA, which permits an employer to express its opinions regarding unionization issues as long as the employer’s statements do not constitute threats of reprisals or promises of benefits to employees. The court reasoned if an employer has the right to speak regarding representative bargaining, it must have the concomitant right to be silent on the same issues, a right that would be thwarted by the required posting.

Although the D.C. Circuit invalidated the NLRB’s posting rule based on its inconsistency with Section 8(c), the majority opinion did not address a very important issue – whether the Board’s rulemaking authority permitted it to enact the rule at all.

In U.S. Chamber of Commerce v. NLRB, the Fourth Circuit panel took head-on the issue ducked by the D.C. Circuit, finding that the NLRB exceeded its rulemaking authority by enacting the posting rule.  The court initially noted that Section 6 – the NLRA provision granting rulemaking authority to the Board – permitted the Board to promulgate such rules “necessary to carry out” the provisions of the NLRA.  The court then noted that the Act established two primary duties for the Board: 1) to conduct representative elections, and 2) resolve unfair labor practice charges.  Both roles are reactive as they require affirmative action by others before the Board can act.  In contrast, the court held that proposed posting rule constituted proactive action by the Board and, therefore, the Board had exceeded its legislative mandate.

Although the concurrent cases in the D.C. and Fourth Circuits netted the same results – the invalidation of the posting rule – the Fourth Circuit’s reasoning could have a more sweeping impact on the Board and its increased use of its rulemaking powers to further its apparent agenda to make certain employees of union and non-union employers are informed of their rights under the NLRA.   The Board has not yet announced whether it intends to seek Supreme Court review of the Fourth Circuit’s decision.  We’ll keep you posted.