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A federal appeals court in Washington on Tuesday struck down a rule requiring companies to post a notice advising employees of their rights under federal labor law, including the right to form or join a union. 

The rule, which the National Labor Relations Board published in August 2011, would have required nearly 6 million employers, many of them small businesses, to conspicuously display the employee-rights poster, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said on May 7.

Writing for the appeals court, Senior Judge A. Raymond Randolph said the poster rule made an employer’s failure to post the notice an unfair labor practice. However, federal law protects "the right of employers (and unions) not to speak," he continued.

"This is why, for example, a company official giving a noncoercive speech to employees describing the disadvantages of unionization does not commit an unfair labor practice if, in his speech, the official neglects to mention the advantages of having a union," Randolph said.

Judges Janice Rogers Brown and Karen LeCraft Henderson agreed with the disposition of the case. Writing separately, however, Henderson said she also would have found the board lacked authority to promulgate the posting rule under a different provision of the National Labor Relations Act.

Lawyers for the NLRB argued, among other things, that content of the poster reflected the board’s speech, not the employer’s. The board’s attorneys said the poster’s message was not ideological. Enforcement of the rule was on hold pending the outcome of the appeal.

Linda Dreeben, deputy associate general counsel at the NLRB, could not be reached for comment. Neither could Dawn Goldstein, who argued the case in the appeals court.

Littler Mendelson partner Maurice Baskin in Washington, who practices in national labor policy, argued in the D.C. Circuit in September for the challengers, including the National Association of Manufacturers.

"The D.C. Circuit decision was a victory for the rule of law and for some six million employers around the country," Baskin said in an email. "The grounds adopted by the court and by the concurrence are compelling and we hope will foreclose further appeals by the board. "

Jay Timmons, president of the National Association of Manufacturers, said in a prepared statement that "stopping the NLRB’s burdensome agenda of placing itself into manufacturers’ day-to-day business operations is essential to preventing further government-inflicted damage to employee relations in the United States."

A federal trial judge in South Carolina in April 2012 also concluded the NLRB lacked authority to promulgate the posting rule.

The government is challenging that decision in a case pending before the U.S. Court of Appeals for the Fourth Circuit. The appeals court heard the case in March.

Mike Scarcella can be contacted at mscarcella@alm.com.

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