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NLRB Posting Rule II: Posting Rule Exceeded Authority under NLRA

Posted in Judicial Process, Judicial Review & Remedies

In a second blow to the National Labor Relations Board (NLRB) Posting Rule, the United States District Court for South Carolina has held that the NLRB violated the Administrative Procedure Act (APA) when it promulgated a rule without statutory authority requiring employers to display an NLRB-created poster.  Chamber of Commerce v. NLRB.  As previously discussed here, the D.C. District Court struck down enforcement provisions of the NLRB Posting Rule that would require that its 11” x 17” poster be displayed in conspicuous places, informing employees of their rights under the National Labor Relations Act (NLRA), together with NLRB contact information and information concerning basic enforcement procedures.  In short, the S.C. District Court held that the NLRA did not grant the NLRB authority to requirement employers to display their poster as a matter of statutory construction, and did not reach the plaintiffs’ First Amendment and other APA claims.  More litigation on the Posting Rule is all but certain.

This Case:  Several suits have been filed challenging the NRLB Posting Rule.  The U.S. District Court in D.C. previously invalidated provisions of the NLRB’s Posting Rule 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.

In this case, the Chamber of Commerce and South Carolina Chamber of Commerce had the lead and made much the same arguments as in the D.C. District Court.  The result is also discussed by Mark Theodore in Proskauer’s Labor Relations Update.

Statutory Authority & Chevron Step 1:  The S.C. District Court reached only the threshold issue of whether the NLRA granted the NLRB authority to require employers to post the rule.  Under Chevron v. NRDC, if the statute is clear, that is the end of the matter for both the agency and the court.  The court found:

  • NLRA places the NLRB in a “reactive” mode – adjudicating unfair labor practice (ULP) charges and conducting representation elections – with regulatory authority limited to rules “necessary” to carry out sections of the NLRA, not merely useful to that purpose;
  • NLRA does not require employers to post general notices of employee rights under the Act, as sharply contrasted with a number of other employment-related Acts of Congress, including Title VII of the Civil Rights Act; the Age Discrimination in Employment Act; the Occupational Safety and Health Act; the Migrant and Seasonal Agricultural Workers Protection Act; the Employee Polygraph Protection Act; the Americans with Disabilities Act; the Family and Medical Leave Act; and the Uniformed Service Employment and Reemployment Rights Act; and
  • The NLRB’s lately-found “gap filling” authority does not overcome the clear statutory text and applied canons of construction to the lack of specific statutory authority.

Chevron Step 2:  As the court decidec that the NLRA was clear and did not grant the NLRB authority to require posting, the court did not need to reach the constitutional issue of whether posting violated the employers’ First Amendment free speech rights or whether the NLRB followed the APA and the RFA in promulgating the rule.  Rather, in a discrete dicta footnote, S.C. District Judge Nelson agreed with D.C. Judge Jackson’s decision that the NLRB “articulate[d] a satisfactory explanation for its action including a rational connection between the facts found and the choice made” under Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co.

Opinion on Opinion:  The structural reasoning provided by the S.C. District Court is strongly supported by the statute’s structure and history, and reinforces Congress’ responsibility to be clear.  To reach the minimal or lack of amendment to the NLRA as a negative implication – based on evidence from other (mostly) post-enacted statutes – is a small stretch.  Congress is presumed to know the law and the state of the law when it enacts legislation, and the opinion reinforces this notion by going further to use failure to conform enacting legislation as Congressional knowledge.

Continuity & Conflict:  The invalidation of the enforcement provisions and the determination that the NLRB had no authority to require posting hardly ends the controversy or the litigation.  The South Carolina decision does not reach beyond that State’s borders; the NLRB may decline to acquiesce in the decision and continue to litigate.  The D.C. decision invalidated the enforcement provisions and they may not be applied at all – nationwide.  Cases are likely to continue for some time.

Together the D.C. and S.C. cases present continuity and a district court-level intercircuit conceptual conflict.  Both courts found fault with the Posting Rule, but for different reasons. The differences will foster more litigation than the continuity resolves.