The United States Court of Appeals for the Fourth Circuit affirmed a district court judgment that the National Labor Relations Board (NLRB) had no statutory authority to promulgate its Notification of Employee Rights Under the National Labor Relations Act, or “posting rule.” The Fourth Circuit thus joined the District of Columbia Circuit. The latest opinion is broader, however, than the D.C. Circuit opinion and limits the NLRB’s authority to promulgate substantive rules under the National Labor Relations Act (NLRA). Applied broadly, the opinion cautions agencies to carefully circumscribe their rules to the contours of statutory delegations and the purposes of enactment.
In Sum: The 4th Circuit succinctly states its conclusions:
We agree with the district court that the rulemaking function provided for in the NLRA, by its express terms, only empowers the Board to carry out its statutorily defined reactive roles in addressing unfair labor practice charges and conducting representation elections upon request. Indeed, there is no function or responsibility of the Board not predicated upon the filing of an unfair labor practice charge or a representation petition. We further note that Congress, despite having enacted and amended the NLRA at the same time it was enabling sister agencies to promulgate notice requirements, never granted the Board the statutory authority to do so. We therefore hold that the Board exceeded its authority in promulgating the challenged rule, and affirm.
The court’s analysis provides a structured section-by-section exposition of the National Labor Relations Act
Rule Refresher: Subpart A of the rule – and the point of contest in the case – requires that all employers subject to the NLRA must post a specific notice to employees, in conspicuous places, informing them of exact text of their rights under the NLRA, together with NLRB contact information. Subpart B makes failure to post the employee notice an unfair labor practice under the NLRA. Subpart C of the rule contains ancillary provisions that, like subpart B, depend on subpart A.
The NLRB conceded in the preamble to the rule that “[t]he NLRA is almost unique among major Federal labor laws in not including an express statutory provision requiring employers routinely to post notices at their workplaces informing employees of their statutory rights.” The court textually noted that the NLRB has rarely promulgated rules, and in a footnote, expressly noted that the only past imposition of such posting requirements were in remedial orders for a past unfair labor practice violation of the NLRA.
D. C. Proceedings: In the United States District Court for the District of Columbia the actual posting provisions were upheld, but the court invalidated provisions that (1) made an employer’s failure to display NLRB-provided posters to be an unfair labor practice, and (2) would toll the statute of limitations in unfair labor practice actions against employers who have failed to display the posters. On appeal, the Court of Appeals for the D.C. Circuit enjoined enforcement of the Rule pending its final decision.
On the merits, the D.C. Circuit clarified the starting point for judicial review of final agency rulemaking – filing of a rule on the Federal Register public inspections list, not actual publication – and found each of the enforcement provisions of the posting rule violated provisions of the NLRA. The first point responded to the problem of terminated appointments (and recess appointments) to find the rule to be structurally valid, but the second affirmed the district court’s judgment that the rule’s enforcement provisions exceeded the NLRA.
The D.C. Circuit did not reach whether the NLRB lacked the regulatory authority to issue the posting requirement (subpart A) because the NLRB itself rejected a voluntary approach – with all three of the means for enforcing the posting requirement invalid, the court found that the posting requirement clearly was not severable from the enforcement provisions.
4th Cir. Proceedings: The United States District of Columbia for the District of South Carolina held that the NLRB violated the Administrative Procedure Act (APA) when it promulgated the rule without statutory authority to require employers to display an NLRB-created poster. This appeal followed.
The court reviews in detail the structure and amendatory history of the NLRA, its legislative history, and related statutes – concluding that the NLRB was never delegated substantive regulatory authority to adopt a “posting rule.” Of particular note, the court found that the NLRA created the NLRB is a reactive, judicial agency – adjudicating unfair labor practices brought before it. In line with that structure, the court reiterated the NLRB’s concession in the rule preamble that “[t]he NLRA is almost unique among major Federal labor laws in not including an express statutory provision requiring employers routinely to post notices at their workplaces informing employees of their statutory rights,” a reflection of the authority of other labor relations agencies and the amendments to the NLRA itself.
The challenged rule is unusual in several respects. The Board has only rarely engaged in rulemaking during its seventy-seven year history. And it has never promulgated a notice-posting rule of any kind.
The court framed the question of delegated authority in the affirmative – whether Congress has delegated authority to the NLRB – not the negative – whether Congress has withheld authority to regulate otherwise granted to the NLRB. The court concluded that the proper issue was whether Congress had delegated authority and, to answer this question, applied the familiar Chevron analysis, “whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Only “if the statute is silent or ambiguous with respect to the specific issue” does the court proceed to Chevron’s second step, “whether the agency’s answer is based on a permissible construction of the statute.”
The court reflected the familiar precept of delegation of authority: “‘Mere ambiguity in a statute is not evidence of congressional delegation of authority.’ …. Rather, ‘[t]he ambiguity must be such as to make it appear that Congress either explicitly or implicitly delegated authority to cure that ambiguity.’” This is not inconsistent with the United States Supreme Court (SCOTUS)’s recent holding in City of Arlington v. FCC that courts owe deference to an agency’s determination of its own jurisdiction in an ambiguous provision – it is the structural way of reaching that second step in Chevron analysis.
Applying plain language, context, rejected amendment, and associated and amendatory statutes canons, the court could find no delegation of statutory authority for the NLRB to promulgate a “posting rule.” The associated and amendatory canons are particularly telling that the character of the NLRB is thus fundamentally different from other agencies:
The contrast between the roles the NLRA sets forth for the NLRB and those that other federal labor statutes prescribe for those of its sister agencies with notice-posting authority is of particular significance. As we have discussed, the Board’s core functions are reactive ones. In contrast, other agencies that have promulgated notice-posting requirements have proactive mandates. For instance, the EEOC, which is granted the authority to require the posting of notices, …, has the power to proactively file charges and undertake investigations, regardless of whether a party files a charge, …. The same is true of the Occupational Safety & Health Administration, …, as well as the Department of Labor (“DOL”) more generally, ….
Congress’s continued exclusion of a notice-posting requirement from the NLRA, concomitant with its granting of such authority to other agencies, can fairly be considered deliberate.
Certiorari? The proximity of the Fourth Circuit decision to the D.C. Circuit decision, with different analysis reaching the same conclusion and effect, provides the NLRB – through the Department of Justice (DOJ)’s Solicitor General – to seek review in SCOTUS with a significant substantive issue in two different cases. Although no intercircuit conflict exists, the adverse holding and differing analysis bolsters the importance of the issue. One might fairly expect the Solicitor General – if he can be convinced to proceed – to file closely knit petitions – both substantively and temporally. At the same time, two substantive losses may convince the Solicitor General (or the NLRB) that it is time to set the issue aside, like the rule.