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D.C. Circuit Spanks NLRB a Second Time; Kills Notice Rule

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By William Peacock, Esq. on May 09, 2013 3:55 PM

In January, the D.C. Circuit gave the proverbial bench-slap to President Barack Obama and the National Labor Relations Board, holding that Obama’s appointments to the NLRB during a Senate recess were unconstitutional. Earlier this week, the D.C. Circuit did it again, invalidating a rule promulgated by the NLRB that required employers to post notices detailing workers’ rights regarding unions.

The court issued an injunction in April 2012 after two lower courts came to differing conclusions about whether the rules exceeded the board’s authority. The court noted in its opinion that the Fourth Circuit currently has a pending South Carolina case regarding the rule.

The notice-and-comment rule, proposed in December 2010, required employers to post a notice (with poster size and font set by the NLRB) detailing the workers' right to form or join a union, to strike, to bargain collectively, and to act together to improve working conditions.

Most importantly, a failure to post the notice is, per the rule, an unfair labor practice, in violation of 29 U.S.C. § 157. Two additional enforcement mechanisms were also provided for. In one, the statute of limitations is tolled "unless the employee has received actual or constructive notice that the conduct complained of is unlawful." Also, the Board may consider failure to post the notice as "evidence of unlawful motive in a case in which motive is an issue."

The Board argued that the rule was necessary because of the reduced presence of unions in American's workforce (7.3 percent of private-sector employees in 2012) and the influx of immigrant workers and recent graduates (who presumably are unfamiliar with U.S. labor laws).

The lower court found the statute of limitations tolling, as well as the unfair labor practice provision invalid, yet upheld the remainder of the law.

The D.C. Circuit went a whole different direction.

Citing 29 U.S.C. § 158(c), enacted in 1947, the circuit court invalidated the entire rule. The cited section allows employers to express their opinion regarding unionization, so long as the speech "contains no threat of reprisal or force or promise of benefit."

Congress passed that provision due to beliefs that the NLRB had been regulating employers' speech too restrictively. It was meant to "encourage free debate on issues dividing labor and management."

The statute precludes the NLRB from finding non-coercive speech to be an unfair labor practice or evidence of such a practice. The controversial rule does both.

The circuit court continued by citing a number of Supreme Court opinions holding that dissemination of another's message is as protected as one's own message. In addition, "all speech inherently involves choices of what to say and what to leave unsaid."

In short, compelled dissemination of the NLRB's speech violates free speech principles, as well as § 158(c).

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