South Carolina Federal Court Finds the NLRB's Employee Rights Notice-Posting Rule Invalid and Unenforceable

Alerts / April 16, 2012

On Friday, April 13, a South Carolina federal judge ruled that the National Labor Relations Board's ("NLRB" or "Board") Employee Rights Notice-Posting Rule is invalid and unenforceable. (Chamber of Commerce v. NLRB, D.S.C. No.11-cv-2516, April 13, 2012). The rule is scheduled to take effect on April 30, 2012.

Chief Judge David Norton of the U.S. District Court for the District of South Carolina sided with the United States and South Carolina Chambers of Commerce and held that the Board's rule violates the Administrative Procedures Act ("APA"). Section 6 of the National Labor Relations Act ("NLRA") states that "The board shall have authority from time to time to make, amend and rescind, in the manner prescribed by the Administrative Procedures Act, such rules and regulations as may be necessary to carry out the provisions of this act." Rejecting the Board's arguments that the language of Section 6 is sufficiently broad to encompass the notice-posting rule, Judge Norton held that the plain language and statutory structure of the NLRA deprive the Board of authority to implement the rule. Specifically, Judge Norton found that the notice-posting rule is not "necessary" to carry out any NLRA provision: "It can be said that the notice-posting rule 'aids' or 'furthers' the aspirational goals of Section 1 by notifying employees of their rights under Section 7," Norton wrote, "but defendants [the NLRB] have not shown that the rule is 'necessary' to carry out any other provision of the Act." Additionally, Judge Norton noted that while Congress has expressly included general notice-posting requirements in nine other labor and employment statutes, the NLRA has remained silent on the issue for more than 75 years.

Judge Norton's decision directly opposes a March 2, 2012, decision from the U.S. District Court for the District of Columbia written by Judge Amy Berman Jackson. (Nat'l Ass'n of Mfrs. v. NLRB, D.D.C., No. 11-cv-1629, March 2, 2012). As we previously informed you in our March 5, 2012, alert, Judge Jackson upheld the NLRB's statutory authority to issue the notice-posting rule, but held that certain portions of the rule were invalid. Judge Jackson's decision has been appealed to the U.S. Court of Appeals for the District of Columbia.

Judge Norton's ruling is a positive outcome for employers, but it does not put this issue to rest. Unless reversed or stayed by an appellate court, the ruling blocks the April 30, 2012, implementation of the Board's notice-posting rule in South Carolina, but its nationwide impact is unclear. It remains to be seen whether the Board will again push back the rule's implementation date while waiting on an appellate court to address the issue; the NLRB has already twice delayed the effective date of the notice-posting rule. Due to the uncertainty surrounding the viability of the notice-posting rule outside of South Carolina, employers should remain prepared to have notices in place by April, 30, 2012, but should be on alert for further developments.

Baker Hostetler will keep you updated on the status of the notice-posting rule as more information becomes available. If you have any questions about this decision or how it may impact your business, please contact any member of Baker Hostetler's Labor Relations Team.

Authorship Credit: Jeremiah L. Hart

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