The Fourth Circuit has agreed with the D.C. Circuit that the National Labor Relations Board exceeded its authority by promulgating a 2011 regulation that required employers to post a notice on worker rights in its recent decision in Chamber of Commerce v. NLRB, 2013 U.S. App. LEXIS 12034 (4th Cir. June 14, 2013). This decision affirmed the district court’s opinion that the National Labor Relations Act does not authorize or empower the Board to promulgate such a notice posting requirement.
In reaching this decision, Judge Duncan (joined by Judges Floyd and Thacker) stressed that the NLRA’s rulemaking provision “only empowers the Board to carry out its statutorily defined reactive roles in addressing unfair labor practice charges and conducting representation elections upon request.” As a result, the court rejected the Board’s argument that the notice rule was “necessary” to enforce Federal labor law. If Congress intended to grant the NLRB such power, said Judge Duncan, “it could have amended the NLRA to do so.” This is a second hit punch for the NLRB. In May, the D.C. Circuit reached the same conclusion in National Assn. of Mfgrs. v. NLRB, 2013 U.S. App. LEXIS 9231 (D.C. Cir. May 7, 2013), reversing a district court decision in that case.
The issue is a sticky one and one that, among other things, demonstrates how things work (or do not work) at the Board. In 1993, Labor Law professor Charles Morris filed a petition for rulemaking that would require all employers to post notices about workers’ rights under the NLRA. Historically, the Board only requires that a notice be posted if an employer is found to have committed an unfair labor practice. As any employer is well aware, however, there are a host of laws – Title VII, the ADA, ADEA, FMLA, OSHA, and FLSA among them – that require a notice posting.
In December 2010, a short 17 years after now Professor Emeritus Morris’s petition was filed, the Board published a proposed rule requiring notice posting. The Board published the final rule in August 2011, with a 3-1 vote (the lone Republican Board member dissenting).
The final rule said that employer who failed or refused to post the required notice would constitute interference with employee rights and violate Section 8(a)(1) of the Act. Further, a “knowing and willful refusal to comply” with the posting requirement could be considered by the NLRB as “evidence of unlawful motive in a case in which motive is an issue.” The rule also permitted tolling of the usual six month statute of limitations for ULP charges if an employer “failed to post the required employee notice unless the employee has received actual or constructive notice that the conduct complained of is unlawful.”
Immediately, two lawsuits were filed: one in D.C. and one in South Carolina, and the rule did not take effect pending review. At the heart of the matter is the NLRB’s role as defined by Congress: Can it take “proactive” steps to address labor issues, or is it a “reactive” agency that can only address an employer’s or union’s actions after they occur? In passing the rule, the Board majority claimed that Section 6 of the NLRA, 29 U.S.C. § 156, provided the Board with authority to adopt “such rules and regulations as may be necessary to carry out the provisions of this Act.” Adoption of the regulation, said Members Liebman, Becker, and Pearce, was necessary to address a “knowledge gap” that left many Americans unfamiliar with the provisions of the federal labor law.
Neither the D.C. Circuit nor the Fourth Circuit agreed with that assessment, however. In her opinion, the Fourth Circuit’s Judge Duncan wrote that “the substantive provisions of the [NLRA] make clear that the Board is a reactive entity, and thus do not imply that Congress intended to allow proactive rulemaking of the sort challenged here through the general rulemaking provision of Section 6.” The D.C. Circuit rejected the rule for this reason, as well because requiring businesses to post notices of worker rights would violate the free speech rights of employers under federal labor law. The Fourth Circuit decided not to address the free speech argument.
In a continuing search for relevancy, the NLRB has tried for the past few years to expand the protection it offers U.S. workers. At least in this area, it appears the Board overreached.