South Carolina Federal Court Holds NLRB's Notice Posting is Unlawful

As previously blogged here, a federal court located in the District of Columbia upheld the National Labor Relations Board's (“NLRB”) rule requiring nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act.  While upholding the rule, that federal court did at least strike down the rule’s main enforcement provisions.  A copy of that federal court decision is here.  As we blogged then, another legal challenge to the NLRB’s rule was also pending in a South Carolina federal court.  That decision is now here, and it is a good one for employers.

The U.S. Chamber of Commerce and the South Carolina Chamber of Commerce challenged the NLRB’s rule.  On April 13, 2012 (perhaps Friday the 13th from the NLRB’s perspective), the federal judge in that South Carolina case ruled that the NLRB’s entire posting rule is invalid, finding the NLRB exceeded its authority when it required employers to post notices explaining workers’ rights to form a union. In his ruling, the South Carolina federal judge said the NLRB lacked the legal authority to issue the notice and thus the rule was not lawful.  “Based on the statutory scheme, legislative history, history of evolving congressional regulation in the area, and a consideration of other federal labor statutes, the court finds that Congress did not intend to impose a notice-posting obligation on employers, nor did it explicitly or implicitly delegate authority to the Board to regulate employers in this manner,” the court ruled.

Many labor law professionals feel that the NLRB has become overly aggressive in supporting and expanding union rights during the Obama administration.  This sentiment is especially strong in a conservative state like South Carolina, which also was at the center of a now-settled dispute between the NLRB and Boeing over Boeing’s decision to move production of its 787 Dreamliner airplane from Washington State to South Carolina.  The South Carolina federal judge appears to agree that the NLRB is becoming overly aggressive, stating, “The Board also went seventy-five years without promulgating a notice-posting rule, but it has now decided to flex its newly-discovered rulemaking muscles.”  A copy of the South Carolina decision is here. Its authority is technically legally limited to that particular court, but because of its import we expect it to have an effect nationally as the NLRB seeks to regroup and rethink what it will do.  If the NLRB does not appeal the South Carolina court’s decision, the ruling will stand and, from a practical perspective the posting requirement will be invalidated nationally.  But most pundits anticipate that the NLRB will file an appeal over the South Carolina decision.

The bottom line is that we now have two conflicting federal court rulings on the issue, and await the NLRB’s decision on whether it will appeal the South Carolina ruling, and/or delay implementation of its previously stated April 30, 2012 posting deadline.  Stay tuned.

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