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NLRB Notice Posting Rule Invalidated by Fourth Circuit

On June 14, 2013 by Schnader in Labor and Employment

By Scott J. Wenner

The United States Court of Appeals for the Fourth Circuit has delivered the latest in a series of judicial roundhouse blows to the National Labor Relations Board. In Chamber of Commerce of the United States v. National Labor Relations Board, the Court held that the NLRB exceeded its rulemaking authority in requiring employers to post an official Board notice informing employees of their rights under the Act exceeded the agency’s rulemaking authority, rarely exercised until Obama administration appointees took control of the NLRB.

The U.S. Chamber of Commerce challenged the rule, codified at 29 C.F.R. pt. 104, as being exclusively concerned with informing employees of unionized and non-unionized employers alike of their collective rights, making no mention of their individual rights to refrain from engaging in collective activities and from paying union dues. Failure to post the required notice subjected an employer to (i) a finding that it committed an unfair labor practice; (ii) a tolling of statutes of limitation for charges of any other unfair labor practices; and (iii) a finding of anti-union animus that would weigh against it in any proceedings before the Board. The District Court in South Carolina granted the chamber’s motion for  summary judgment, holding that the NLRB lacked statutory authority to  promulgate the notice posting rule.

The Fourth Circuit  affirmed,  finding that the NLRB’s  authority to promulgate rules is far more limited than the authority the Board attempted to exercise.  The Court stated:

“We agree with the district court that the rulemaking function provided for in the NLRA, by its express terms, only empowers the Board to carry out its statutorily defined reactive roles in addressing unfair labor practice charges and conducting representation elections upon request. Indeed, there is no function or responsibility of the Board not predicated upon the filing of an unfair labor practice charge or a representation petition. We further note that Congress, despite having enacted and amended the NLRA at the same time it was enabling sister agencies to promulgate notice requirements, never granted the Board the statutory authority to do so. We therefore hold that the Board exceeded its authority in promulgating the challenged rule, and affirm.”

The NLRB recently has been on the losing end of two appellate decisions holding that actions taken with participation by the President’s recess appointments of members were without effect because the recess appointments were invalid. In late 2011 a district court invalidated the Board’s rule promulgated in 2010 that expedited the union election process after it found that the agency’s vote to adopt the rule was improper. In addition, a highly controversial NLRB decision  that mandatory arbitration policies unlawfully violate Section 7 of the National Labor Relations Act because they  inhibit collective activity has been argued and is awaiting decision by the Court of Appeals for the Fifth Circuit.