Nat'l Ass'n of Mfrs. v. Nat'l Labor Relations Bd., No. 12-5068

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtRANDOLPH
Docket NumberC/w 12-5138,No. 12-5068
Decision Date07 May 2013


No. 12-5068
C/w 12-5138


Argued September 11, 2012
Decided May 7, 2013

Appeals from the United States District Court
for the District of Columbia
(No. 1:11-cv-01629)

Maurice Baskin argued the cause for appellants/cross-appellees. With him on the briefs were Peter N. Kirsanow, Bryan Schwartz, Maynard Buck, Patrick O. Peters, Glenn M. Taubman, William L. Messenger, John N. Raudabaugh, and H. Christopher Bartolomucci. William G. Miossi entered an appearance.

Doreen S. Davis, Charles I. Cohen, Jonathan C. Fritts, and David R. Broderdorf were on the brief for amici curiae The Honorable John Kline, Chairman, Committee of Education and

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the Workforce, The House of Representatives, et al. in support of appellants/cross-appellees.

Dawn L. Goldstein, Attorney, National Labor Relations Board, argued the cause for appellees/cross-appellants. With her on the briefs were John H. Ferguson, Associate General Counsel, Margery E. Lieber, Deputy Associate General Counsel, Eric G. Moskowitz, Assistant General Counsel, Abby Propis Simms, Deputy Assistant General Counsel, and Kevin P. Flanagan, Attorney. Linda Dreeben, Deputy Associate General Counsel, entered an appearance.

Lynn Rhinehart, Charles J.Morris, Christine L. Owens, and Walter Kamiat were on the brief for amici curiae Professor Charles J. Morris, et al. in support of appellees/cross-appellants.

Before: HENDERSON and BROWN, Circuit Judges, and RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge RANDOLPH.

Concurring opinion filed by Circuit Judge HENDERSON, with whom Circuit Judge BROWN joins.

RANDOLPH, Senior Circuit Judge: The National Labor Relations Board declared in a rule that employers subject to its jurisdiction would be guilty of an unfair labor practice if they did not post on their properties and on their websites a "Notification of Employee Rights under the National Labor Relations Act." 76 Fed. Reg. 54,006 (Aug. 30, 2011). The rule applies to "nearly 6 million" employers, "the great majority" of which are small businesses. Id. at 54,042-43. Trade associations and other organizations representing employers across the country filed complaints in the district court, claiming that the

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Board's rule violated the National Labor Relations Act and the First Amendment to the Constitution.

The Board's action departs from its historic practice. From its inception in 1935, the Board has exhibited a "negative attitude" toward setting down principles in rulemaking, rather than adjudication. Bell Aerospace Co. v. NLRB, 475 F.2d 485, 496 (2d Cir. 1973) (Friendly, J.), aff'd in part, rev'd in part, 416 U.S. 267 (1974); see also R. Alexander Acosta, Rebuilding the Board: An Argument for Structural Change, Over Policy Prescriptions, at the NLRB, 5 FIU L. REV. 347, 351 (2010); Jeffrey S. Lubbers, The Potential of Rulemaking by the NLRB, 5 FIU L. REV. 411 (2010). Despite its "broad" rulemaking authority under § 6 of the National Labor Relations Act, Am. Hosp. Ass'n v. NLRB, 499 U.S. 606, 613 (1991), the Board had "used rulemaking as a means of announcing—or considering—its policies on only a few occasions" until 1989, the year in which it issued the substantive regulation upheld in American Hospital, ROBERT A. GORMAN & MATTHEW W. FINKIN, BASIC TEXT ON LABOR LAW: UNIONIZATION AND COLLECTIVE BARGAINING 21 (2d ed. 2004).

The path leading to the posting rule goes back to 1993 when a law professor petitioned the Board. See 75 Fed. Reg. 80,410, 80,411 (Dec. 22, 2010). Despite prodding from this law professor and, later, several others, the Board declined to act. Then, in 2010, the Board issued a notice of proposed rulemaking. Id. at 80,410. After receiving more than 7000 comments, the Board published a final rule on August 30, 2011, with Member Hayes dissenting. 76 Fed. Reg. 54,006.

The final rule provides that "[a]ll employers subject to the NLRA must post notices to employees, in conspicuous places, informing them of their NLRA rights, together with Board contact information and information concerning basic

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enforcement procedures, in the language set forth in the Appendix to Subpart A of this part." 29 C.F.R. § 104.202(a). In addition, employers who customarily communicate with their employees electronically must publish the Board's notice on their intranet or internet sites. See id. § 104.202(f). The required poster, which is published as an addendum to this opinion, must be at least 11 inches by 17 inches and in a type size and format the Board prescribes. See id. § 104.202(b). The poster informs employees of their right to form, join, or assist a union; to bargain collectively through representatives of their choosing; to discuss wages, benefits, and other terms and conditions of employment with fellow employees or a union; to take action to improve working conditions; to strike and picket; or to choose not to engage in any of these activities. See 29 C.F.R. pt. 104, subpt. A, app. The poster also recites more specific employee rights the Board derived from judicial and Board interpretations of the Act. See 76 Fed. Reg. at 54,018.1 The poster states, for example, that it is "illegal" for an employer to prohibit employees "from wearing union hats, buttons, t-shirts, and pins in the workplace" or to "[s]py on or videotape peaceful union activities and gatherings or pretend to do so." 29 C.F.R. pt. 104, subpt. A, app. The poster also states that it is "illegal" for a union to "[t]hreaten or coerce [an employee] in order to gain . . . support for the union" or to "[r]efuse to process a grievance because [the employee] ha[s] criticized union officials or . . . [is] not a member of the union." Id.

As an enforcement mechanism, the rule declares that an employer's failure to post the notice is an unfair labor practice—that is, it "may be found to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed by

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NLRA Section 7, 29 U.S.C. 157, in violation of NLRA Section 8(a)(1), 29 U.S.C. 158(a)(1)." 29 C.F.R. § 104.210.

Section 7 of the Act provides that employees

shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in [section 8(a)(3) of the Act].

29 U.S.C. § 157. (Under § 8(a)(1) it is an "unfair labor practice" for an employer "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [section 7 of the Act]." Id. § 158(a)(1).)

The rule contains two additional enforcement devices. The Board may suspend the running of the six-month limitations period for filing any unfair-labor-practice charge under § 10(b), 29 U.S.C. § 160(b), "unless the employee has received actual or constructive notice that the conduct complained of is unlawful." 29 C.F.R. § 104.214(a). And the Board may consider an employer's "knowing and willful refusal to comply with the requirement to post the employee notice as evidence of unlawful motive in a case in which motive is an issue." Id. § 104.214(b).

The Board invoked § 6 of the Act as authority for the rule. That section provides that the "Board shall have authority from time to time to make, amend, and rescind, in the manner

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prescribed by [the Administrative Procedure Act], such rules and regulations as may be necessary to carry out the provisions" of the Act. 29 U.S.C. § 156. The Board thought the rule was necessary because employees were not aware of their rights under the Act. See 76 Fed. Reg. at 54,006. The Board offered three reasons why: unions now represent only a small percentage of the private workforce, by the latest count just 7.3 percent;2 immigrants make up "an increasing proportion of the nation's work force" and "are unlikely to be familiar with their workplace rights"; and many high-school students about to enter the work force are not familiar with labor laws. 75 Fed. Reg. at 80,411.

"Enforcement of the NLRA," the Board stated, "depend[s] on the existence of outside actors who are not only aware of their rights but also know where they may seek to vindicate them within appropriate timeframes." 76 Fed. Reg. at 54,010. By this, the Board meant that unfair-labor-practice cases must begin with a charge filed by an employee or a union or an employer. "The charge triggers an inquiry that may (or may not) result in the issuance of a complaint by the Board . . . . However, neither the Board nor its agents are authorized to institute charges sua sponte." GORMAN &FINKIN, BASIC TEXT ON LABOR LAW, supra, at 10. Board orders finding an unfair labor practice after proceedings on a complaint are "not self-executing." Id. at 14. Rather, the Board must petition a court of appeals for enforcement—that is, for a court order requiring the offending party to comply with the Board's order. See id.

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Member Hayes, dissenting, disputed both the Board's authority under § 6 and the evidentiary support the Board...

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