October 31, 2011

NLRB Postpones Effective Date for New Union-Posting Rule

On October 5, 2011, the National Labor Relations Board (NLRB) announced that it has postponed the effective date of its new rule requiring employers to post a notice regarding employees' union rights from November 14, 2011, to January, 31, 2012. The new rule, found at 29 C.F.R. § 104.202, requires all employers covered by the National Labor Relations Act (NLRA) to post a notice informing employees of their rights to, among other things, form a union, join a union, assist a union, or refrain from doing any of these things.

The new rule has been highly controversial since the NLRB first proposed it in December 2010. Indeed, many commentators, and one dissenting NLRB board member, have argued that the NLRB has overstepped its jurisdictional authority by enacting the new rule. This article will focus on the requirements of the new rule, how it fits in with the Obama NLRB's current agenda, as well as challenges to the new rule.

Background

The NLRB first proposed the mandatory posting rule in December 2010, marking the board's first exercise of its rule-making authority since 2004. During the six-month comment period, the NLRB received more than 7,000 comments on the proposed regulation-most of which opposed the rule. Notwithstanding, on August 30, 2011, Board Chairman Wilma Liebman and members Mark Gaston Pearce and Craig Becker voted to approve the final rule. The NLRB's sole Republican member, Brian Hayes, dissented from the majority, ending his dissent with the opinion that "a reviewing court will soon rescue the Board from itself and restore the law to where it was before the sorcerer's apprentice sent it askew."

Content of Notice

The final rule requires employers to post a specific form notice at the workplace. The form notice begins with a general statement regarding the NLRA and its purpose:

The [NLRA] guarantees the right of employees to organize and bargain collectively with their employers, and to engage in other protected concerted activity or to refrain from engaging in any of the above activity. Employees covered by the NLRA are protected from certain types of employer and union misconduct. This Notice gives you general information about your rights, and about the obligations of employers and unions under the NLRA. Contact the National Labor Relations Board (NLRB), the Federal agency that investigates and resolves complaints under the NLRA, using the contact information supplied below, if you have any questions about specific rights that may apply in your particular workplace.

The required notice goes on to inform employees of their rights to:

  • Organize a union to negotiate with their employer concerning wages, hours, and other terms and conditions of employment.
  • Form, join, or assist a union.
  • Bargain collectively through representatives of the employees' own choosing for a contract with the employer setting wages, benefits, hours, and other working conditions.
  • Discuss wages and benefits and other terms and conditions of employment or union organizing with co-workers or a union.
  • Take action with one or more co-workers to improve working conditions by, among other means, raising work-related complaints directly with the employer or with a government agency, and seeking help from a union.
  • Strike and picket, depending on the purpose or means of the strike or the picketing.
  • Choose not to do any of these activities, including joining or remaining a member of a union.

The notice also advises employees that employers may not do any of the following under the NLRA:

  • Prohibit employees from talking about or soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms.
  • Question employees about union support or activities in a manner that discourages employees from engaging in that activity.
  • Fire, demote, or transfer employees, or reduce hours or change shifts, or otherwise take adverse action against employees, or threaten to take any of these actions, because employees join or support a union, or because they engage in concerted activity for mutual aid and protection, or because they choose not to engage in any such activity.
  • Threaten to close a workplace if workers choose a union to represent them.
  • Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
  • Prohibit employees from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
  • Spy on or videotape peaceful union activities and gatherings or pretend to do so.

The notice explains that unions and their representatives may not do any of the following under the NLRA:

  • Threaten or coerce employees in order to gain support for the union.
  • Refuse to process a grievance because an employee criticized union officials or because he or she is not a member of the union.
  • Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
  • Cause or attempt to cause an employer to discriminate against an employee because of his or her union-related activity.
  • Take adverse action against employees because they have not joined or do not support the union.

The notice also contains a brief provision explaining the concept of collective bargaining and good faith negotiations relating to the terms and conditions of employment. Finally, the notice includes a phone number and a website to contact the NLRB with any questions regarding the new rule and its requirements.

Under the rule, all covered employers will be required to post notice on an 11-by-17-inch poster in a conspicuous place, where other notices to employees are customarily posted. In addition to the physical posting, the rule requires every covered employer to post the notice on an intranet site if personnel rules and policies are customarily made available to employees there. A previous version of the rule would have required employers to e-mail the notice to all employees. This requirement was not included in the final version. Employers whose workforces are more than 20 percent non-English-speaking must post translations of the notice as they become available.

Employers Covered Under the Rule

The new regulations cover most private-sector employers, even if an employer's workforce is not currently unionized. In the past, applicable law required "union rights" postings only in advance of a scheduled union election or in response to an Unfair Labor Practice Charge. In contrast, under the new rule, all employers subject to the NLRA are subject to the posting requirement.

The NLRA covers most private-sector employers that meet fairly minimal standards for involvement in interstate commerce. Employers in the retail business, including home construction, must comply with the posting requirement if they have a "gross annual volume of business of $500,000 or more." The nonretail standard, which applies to most other employers, is based either on the amount of goods sold or services provided by the employer out of state (called "outflow") or goods or services purchased by the employer from out of state (called "inflow"). Nonretail employers with an annual inflow or outflow of at least $50,000 are covered by the NLRA. The new rule also includes a table identifying specific "miscellaneous" employer categories and sets various gross annual volume of business requirements (i.e., $500,000 for the gaming industry, $250,000 for hospitals, $500,000 for hotels, and $500,000 for restaurants).

Certain employers are specifically excluded from the new rule, including: (1) the federal government or any wholly owned government corporation; (2) any federal reserve bank; (3) any state or political subdivision thereof; (4) any employer subject to the Railway Labor Act; (5) any labor organization; and (6) any employer who only employs individuals excluded from the NLRA's definition of "employee" (i.e., agricultural and domestic workers).

Where to Get the Notice

The NLRB has made the required posting available on its website at http://www.nlrb.gov. In addition, the posters may be obtained at no cost at the NLRB's headquarters, located at 1099 14th Street, NW, Washington, D.C. 20570, or any of its regional offices. Employers must take reasonable steps to ensure that the "notice is not altered, defaced, covered by any other material, or otherwise rendered unreadable."

Failure to Comply With the New Rule

There are several potential consequences for failing to post the required notice. First, failure to post the notice may result in an unfair labor practice. However, the NLRB does not audit workplaces or initiate enforcement actions on its own. Therefore, a failure to post the notice would need to be brought to the NLRB's attention by employees, unions, or other persons. The NLRB has indicated that it does not anticipate issuing unfair labor practices charge in most situations, noting that "in most cases, the [NLRB] expects that employers who fail to post the Notice were unaware of the rule and will comply when requested by a [NLRB] agent" and that "in such cases, the unfair labor practice case will typically be closed without further action."

Second, failure to post the notice may result in a finding by the NLRB extending the six-month statute of limitations for filing an unfair labor practice charge involving other unfair labor practice allegations against the employer. In practice, this may result in a virtually unlimited statute of limitations for employees bringing unfair labor practice claims against employers who have not posted the notice. Finally, if the NLRB finds that the employer's failure to post the notice was knowing and willful, such failure can be used as evidence of an unlawful motive in unfair labor practice cases alleging other violations of the NLRA.

Delay in Effective Date and Challenges to Posting Rule

As noted above, on October 5, 2011, the NLRB announced that it had postponed the effective date of the new rule to January 31, 2012. In announcing the delay, the NLRB noted that the postponement was necessary "in order to allow for enhanced education and outreach to employers, particularly those who operate small and medium size businesses." The NLRB also stated that the decision was made after the organization received "queries from business and trade organizations indicating uncertainty about which businesses fall under the [NLRB's] jurisdiction" and that the extension was made "in the interest of ensuring broad voluntary compliance."

A likely contributing factor to the NLRB's decision to delay implementation is the fact that several suits have been filed challenging the NLRB's authority to enact the new rule. Specifically, a suit by the National Association of Manufacturers seeks to enjoin the new rule, claiming that it is "in excess of the [NLRB's] statutory jurisdiction, authority, limitations and rights." A similar lawsuit filed by the U.S. Chamber of Commerce alleges that "the misguided NLRB violates federal labor and regulatory laws as well as the First Amendment." Additionally, the National Right to Work Foundation has filed a lawsuit claiming that the NLRB has "exceeded its authority granted by Congress" and that the new requirement is "nothing more than yet another attempt by the Obama NLRB to force more workers into union ranks and stifle the rights of employees who want nothing to do with a union." Indeed, the NLRB's decision to postpone the rule's effective date was likely influenced by a request that it do so by U.S. District Court Judge Amy Jackson, who is deciding whether the NLRB should be enjoined from implementing its new rule until legal challenges to the rule are resolved.

In addition, the House Appropriations Committee has proposed a rider to the NLRB's 2012 budget which, if passed, would prohibit the NLRB from allocating any portion of its budget toward enforcing the rule. Finally, Congressman Ben Quayle has introduced HR 2833, or "The Employee Workplace Freedom Act," which would block the implementation of the new rule.

NLRB's "New Agenda"

To be sure, the Obama NLRB has unequivocally signaled its desire to increase employee interest in union activity. In that context, many employment counsel argue that the posting requirement is just the latest salvo in the current board's attempt to reverse the trend of declining union organization in the private sector. For example, in addition to the new posting rule, the NLRB recently issued decisions making it easier to organize small groups of employees in the health care industry, making it more difficult for employees to decertify their union, limiting the ability of employers to make unilateral changes to the workplace, and providing unions greater freedoms relating to handbilling and distribution of pro-union literature. The NLRB may also decide shortly whether class action waivers in arbitration agreements violate the right of employees to engage in protected concerted activity under the NLRA.

The current NLRB has also taken a special interest in social media. The NLRB is aggressively positioning itself to find employee social media communications to be protected concerted activity under the NLRA. Indeed, the NLRB's acting general counsel has issued an extensive memorandum describing recent NLRB cases dealing with employee postings on social media sites, and in one recent case the NLRB has found that Facebook postings by employees critical of their employers constitute protected concerted activity under the NLRA. Similarly, the board has repeatedly criticized employer policies that attempt to curtail what might be considered protected employee speech on social media sites such as Facebook and Twitter.

What Should Employers Be Doing?

While the NLRB has indicated that it will not make any changes to the rule or the required notice, the NLRB's most recent move has created uncertainty regarding the date by which employers will have to comply. Unless a court prevents the new rule from taking effect in the interim, however, it appears that employers should educate themselves regarding the NLRA and consider communicating with supervisors. Given the NLRB's renewed interest in unionization, employers should educate themselves on the requirements of the NLRA and what type of activities it both protects and prohibits. Furthermore, employers should be aware that employees may perceive this poster as pro-union; indeed, some employees may even see the notice as suggesting that the employer is encouraging unionization. Accordingly, employers should consider discussing with managers and supervisors what the poster says and lawful strategies on how to respond to employee questions and comments about union the poster or even union organizing. Occasionally untrained supervisors make anti- or pro-union comments to employees at work that can result in allegations of unfair labor practices under the NLRA.

It should be noted however, that the new rule does not alter employers' rights of free speech under the section 8(c) of the NLRA. Specifically, section 8(c) protects "[t]he expressing of any views, argument or opinion," by the employer provided that "such expression contains no threat of reprisal or force or promise of benefit." Thus, employers still retain the right to speak to truthfully to their employees about the NLRA, the NLRB, and unions.