New England Biz Law Update
Employers and business groups won a partial victory in federal court earlier this month with a ruling that invalidated the portion of a controversial National Labor Relations Board rule that makes failure to post notice of employees’ rights under the NLRA an automatic unfair labor practice.
But the issue is far from settled. The case is being appealed, and employers and their attorneys are still scrambling to make sure businesses are in full compliance with the rule, which is set to go into effect April 30.
“It doesn’t mean that the rule doesn’t have any teeth anymore,” said Subhash Viswanathan, an attorney from the Syracuse, N.Y. office of Bond, Schoeneck & King who represents employers. “The District Court still leaves it up the board. The board has the discretion to determine” whether an unfair labor practice has taken place.
The jury is still out as to whether the ruling signals any judicial backlash against recent NLRB rulings that employer-side attorneys have called heavy-handed.
“This is only one District Court’s view of it,” said Laurence M. Goodman, a partner in the Philadelphia office of Willig, Williams & Davidson who represents unions.
11-by-17 notice
The rule at issue in the case requires employers covered by the act, including companies whose workers are not unionized, to post an 11-by-17-inch notice in their workplaces stating that employees have the right to act together to improve wages and working conditions, to unionize, to bargain collectively with their employer and to refrain from any of those activities.
Willful failure to post the notice is deemed an unfair labor practice under the rule, and such a failure tolls the statute of limitations for unfair labor practice actions.
The decision in National Association of Manufacturers v. NLRB stems from two separate actions against the NLRB brought by the National Association of Manufacturers and the National Right to Work Legal Defense and Education Foundation. The actions allege that the rule exceeded the board’s authority under the National Labor Relations Act.
All parties sought summary judgment.
Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia first ruled that the board had the authority to implement Subpart A of the rule — the provision requiring employers to post the notice of employees’ rights.
But the judge held that Subpart B of the rule, deeming a failure to post to be an unfair labor practice, and the provision tolling the statute of limitations in unfair labor practice actions against employers who fail to post, violated the NLRA and were invalid as a matter of law.
“[T]he Board cannot make a blanket advance determination that a failure to post will always constitute an unfair labor practice,” the judge wrote.
The failure to post a notice may be used as a factor in determining whether an unfair labor practice has taken place, Jackson found.
But, the judge continued, “the Board must make a specific finding based on the facts and circumstances in the individual case before it that the failure to post interfered with the employee’s exercise of his or her rights.”
Rule still has teeth
Employer-side lawyers said the ruling reinforces the notion that unfair labor practices are determined under the NLRA, not the board’s rulemaking.
“The NLRA outlines exactly what unfair labor practices are for both employers and unions,” Viswanathan said. “Congress has already spoken to the issue of what unfair labor practices are.”
Likewise, he said, “the statute of limitations is part of the statute” and cannot be changed by the board’s rulemaking process.
But employers should realize that failing to post the required notice by the April 30 enforcement date could still have consequences.
“The District Court did say that [it is] still left up to the discretion of the board to determine on a case-by-case basis whether the failure to post the notice could be deemed evidence of an employer’s intent, where intent is an issue,” Viswanathan said.
Lawyers disagree as to whether the ruling is the first sign of a judicial backlash against recent controversial rulemaking by the board.
According to Viswanathan, it is too early to tell.
Goodman downplayed the entire controversy.
“I viewed the original rule as a commonsense exercise of the board’s regulatory authority,” he said.
Goodman said such notice rules have been part of labor law for a long time and they are second-nature for most employers and workers.
“Have you ever been in a break room of a workplace where there are 15 posters advising employees of their rights?” he asked. “That is what this rule was. It was just one more poster to advise employees of their rights under the NLRA.”
Goodman brushed aside claims by business groups that the posting rule encourages litigation against employers. In cases based solely on the failure to post, without other allegations, he said that the remedy for a violation will only be modest enforcement actions.
Even if the rule remains in its original form, he said, “if an employer fails to post a notice, the [regional NLRB office] will tell them to post a notice. If they don’t, the NLRB will find that they violated the law, and the remedy will be to post the notice.”
