DC Circuit Court Enjoins NLRB Rule Requiring Posting of Employee Rights Notice and U.S. District Court in South Carolina Declares Entire Rule Invalid

DC Circuit Court Enjoins NLRB Rule Requiring Posting of Employee Rights Notice and U.S. District Court in South Carolina Declares Entire Rule Invalid

By Edward R. Levin

What Happened:

On April 17, 2012, the DC Circuit Court of Appeals issued an emergency injunction postponing the implementation of the NLRB’s rule requiring employers to post a Notice of Employee Rights. The rule, which the NLRB had previously postponed a number of times due to employer objections and court challenges, was scheduled to take effect on April 30, 2012. Now, with the issuance of the injunction, implementation of the posting requirement will be held up at least until the fall, since by court order, oral argument is to be scheduled for a day in September.

As we noted in a previous Alert, in March 2012, a federal district court judge in the District of Columbia ruled that the main enforcement mechanism of the NLRB's rule was invalid and that failure to post the notice could not be declared an unfair labor practice. The judge, however, upheld the NLRB's authority to require employers to post the notice. The NLRB set April 30 as the date for the posting requirement to take effect.

The ruling was appealed to the DC Circuit Court of Appeals, and on April 17, that court issued an emergency injunction postponing the implementation of the Rule while the appeal is pending.

Additionally, and perhaps more dramatically, in a decision issued on April 14, the U.S. District Court in South Carolina agreed with a challenge to the entire rule filed by the U.S. Chamber of Commerce. The court stated, in a very well-reasoned and thorough opinion, that when Congress failed to include a notice posting requirement for over 75 years of the law's history, despite such a requirement being included in many other labor statutes, the NLRB has no authority to "fill in a gap" by issuing a rule to enhance the statute. It further reasoned that Congress only intended the NLRB to be a reactive adjudicatory agency. That is to say, it would swing into action based on complaints or petitions for elections "only when requested" and that it has no "roving investigatory powers" and no authority to initiate proceedings on its own.

What it Means:

While it is unclear whether the South Carolina decision would be binding on the NLRB or followed outside of the Fourth Circuit (Maryland, Virginia, North and South Carolina and West Virginia) the injunction issued by the DC Circuit clearly puts the Posting Rule on hold and further delays the obligation to post the notice.

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