For the second time this year, the D.C. Circuit has proven to be quite a thorn in the side of the National Labor Relations Board.

About 3 months after the Circuit’s landmark ruling in Noel Canning that President Obama’s recess appointments to the Board were unconstitutional, thus leaving the Board without a working quorum to make decisions and take other actions – discussed previously on this blog HERE – the Court has now invalidated the Board’s well-publicized requirement that employers post a notice advising employees of their rights to form a union.

The Employment Essentials team has discussed the Board’s posting Rule in this forum a number of times before. As a refresher, the posting requirement – an 11 X 17 notice – informs employees of their right to form a union, bargain collectively, discuss working conditions, strike, or not engage in any of those activities. The notice also stated very plainly that certain employer actions – spying on peaceful union activities and prohibiting employees from wearing union t-shirts in the workplace, to name two examples – were “illegal.” According to the Rule issued by the Board, the failure to post this notice would have been an Unfair Labor Practice under the National Labor Relations Act. The Board issued this Rule based on its own premise that employees simply were not aware of their rights under the Act.

Once the Board’s Rule was finalized, the National Association of Manufacturers, among others, challenged its legality in Federal District Court in Washington D.C. The Judge there felt the Board had the authority to issue the Rule but not charge an employer with an unfair labor practice for not posting the notice required by the Rule. The Association took up an appeal to the D.C. Circuit challenging the first part of her ruling, and the Board did the same on the latter part.

Then things got really interesting. One month later, a District Court in South Carolina held that the Board lacked authority to issue the Rule, which was the complete opposite of what the Judge in Washington D.C. had held. While the case in South Carolina was also appealed – and currently remains pending in the Fourth Circuit – the D.C. Circuit Court stayed implementation of the Rule and posting requirement, and the Board itself also agreed not to implement the requirement even outside of the District of Columbia unless the South Carolina Judge’s decision was overturned.

Back in our nation’s capital, after first determining that the Board did have a valid quorum still in place under Noel Canning when it filed the notice posting Rule with the Federal Register, the D.C. Circuit then essentially determined that Section 8(c) of the Act gives employers certain free speech rights to speak about unionization as long as it is non-coercive – and not speak if they choose not to – and, therefore, does not permit the Board to consider an employer’s failure to post the notice under the Rule an Unfair Labor Practice. In so concluding, the D.C. Circuit rejected the argument that the notice was really Board speech, not that of the employer. In doing that, the Court likened the notice and its contents to handing out leaflets prepared by others and referenced the free speech protection such leaflets contain.

Because the Court ultimately determined that this justification and the other two means of enforcing the Board’s posting requirement in the Rule were also invalid, the Court did not decide whether the Board had the authority to issue the Rule under Section 6 of the Act, which gives the Board the authority to issue rules to carry out the Act’s provisions.

Most employers probably have been aware of this posting requirement. After all, many spoke out against it. Also, this issue has been on the radar for quite a while because the regulatory process took some time and the Rule was set to take effect on the scheduled date right up until the stay was issued. While the war may not be finished because the Board could very well appeal the D.C. Circuit’s decision to the U.S. Supreme Court while they wait to see what the Fourth Circuit decides, this ruling remains an extremely significant victory for employers – and another setback to the Board in carrying out what has been generally regarded as more of an activist agenda under the Obama administration.