ALM Properties, Inc.
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The U.S. Court of Appeals for the Fourth Circuit ruled in June that the National Labor Relations Board overstepped its authority by issuing a rule that would have required employers to post notices informing workers of their rights under federal labor law.
The court's conclusion is in line with a ruling by the U.S. Court of Appeals for the D.C. Circuit in May, which also struck down the rule. However, the Fourth Circuit went farther, holding that the NLRB's rule-making powers are fundamentally limited.
"There is no general grant of power to the NLRB outside the roles of addressing [unfair labor practice] charges and conducting representation elections," wrote Judge Allyson Duncan, who was joined by Judges Henry Floyd and Stephanie Thacker. "Indeed," she continued, "there is no function or responsibility of the board not predicated upon the filing of an unfair labor practice charge or a representation petition."
The NLRB issued the poster rule on August 30, 2011. It would have required 6 million employers to post notices "in conspicuous places" detailing workers' rights under the National Labor Relations Act, including "the right of employees to organize and bargain collectively with their employers."
In justifying the rule, the board said that "American workers are largely ignorant of their rights under the [National Labor Relations Act], and this ignorance stands as an obstacle to the effective exercise of such rights."
The U.S. Chamber of Commerce and the South Carolina Chamber of Commerce promptly sued in South Carolina federal court, and won summary judgment in April when the court ruled that the NLRB had no authority to act.
Concurrently, the National Association of Manufacturers sued in the U.S. District Court for the District of Columbia, where the poster rule was upheld. On appeal, however, the D.C. Circuit reversed the lower court and held that the notice-posting rule violated section 8(c) of the National Labor Relations Act, which prohibits the board from finding employer speech that is not coercive to be an unfair labor practice.
The Fourth Circuit never reached this question. Instead, it concluded at the outset that the NLRB overstepped its mandate. "In our analysis here, we focus on the question of whether Congress intended to grant the NLRB the authority to issue the challenged rule," Duncan wrote. "We do not presume a delegation of power simply from the absence of an express withholding of power."
She continued: "Because the board is nowhere charged with informing employees of their rights under the [National Labor Relations Act], we find no indication in the plain language of the act that Congress intended to grant the board the authority to promulgate such a requirement."
While other federal agencies like the Equal Employment Opportunity Commission and the Occupational Safety and Health Administration have specific statutory authority to require employers to post notices, the NLRB does not.
"No provision in the act requires employers who have not committed labor violations to be subject to a duty to post employee notices," the panel found.
A version of this story appeared in The National Law Journal, a sibling publication of Corporate Counsel.