Labor Department’s Posting Rule Upheld

By Allen Smith May 13, 2015
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The U.S. District Court for the District of Columbia has upheld the U.S. Department of Labor’s (DOL’s) 2010 posting rule that requires federal contractors to post workplace notices informing their employees of their rights under the National Labor Relations Act (NLRA).

The National Association of Manufacturers (NAM) sued the U.S. Department of Labor over the posting rule, developed in response to President Barack Obama’s Jan. 30, 2009, Executive Order (EO) 13496. Obama invoked his authority under the Constitution and the Procurement Act to require that every government contract include provisions mandating that federal contractors post a notice describing the rights of employees under federal labor laws. Obama tasked the secretary of labor with implementing the executive order and drafting the required notice.

DOL’s notice, “Employee Rights Under the NLRA,” has three sections, which describe:

  • Collective bargaining rights of employees under the NLRA.
  • Anti-union actions that are illegal for employers to perform.
  • Coercive actions that are illegal for unions to use.

NAM claimed that the posting rule was biased against employers and violated its right to be silent.

But the court granted summary judgment in the Department of Labor’s favor, holding on May 7, 2015, that:

  • The notice requirement does not, as NAM claimed, compel speech in violation of the First Amendment.
  • The president had the authority under the Procurement Act to require the posting of a notice as a condition of federal contracts.
  • The DOL‘s notice did not violate the Administrative Procedure Act (APA).
  • The posting rule is not pre-empted by the NLRA.

First Amendment

NAM emphasized that the notice did not list certain employee rights that may be associated with an anti-union position, such as:

  • An employee’s right to object to payment of dues in excess of the amounts required for representational purposes (a right recognized by the Supreme Court in Commc’ns Workers of Am. v. Beck, 487 U.S. 735 (1988)).
  • An employee’s right to decertify a union.
  • An employee’s right to refuse to pay dues to a union in a right-to-work state.

“The posting rule does not interfere with the contractor’s ability to convey a different message,” the court stated. “Indeed, nothing in the rule prevents a contractor from creating its own posting and placing it next to the Department of Labor-drafted notice, as to make clear that the notice does not reflect the contractor’s own views and its display is government mandated. … Likewise, the posting rule does not prevent the contractor from displaying an employee’s Beck rights, if the contractor believes that the notice’s listing of rights is underinclusive.”

The court further asserted, “Nor are employees likely to believe that the notice is their employer’s speech. At oral argument, plaintiffs admitted that ‘the majority of Americans may not confuse the notice for anything other than government speech,’ but nevertheless asserted that ‘very often employees don’t know whose speech that is.’ … But common sense dictates otherwise.”

Procurement Act

Just as former President George W. Bush had authority to issue EO 13201, requiring contractors to post notices at their facilities informing employees of their Beck rights and the right to refrain from joining a union, President Obama had authority to issue EO 13496, revoking EO 13201 and emphasizing an employee’s right to unionize and engage in collective bargaining, the court said.

EO 13201 was challenged but upheld in UAW-Labor Emp’t & Training Corp. v. Chao, 325 F.3d 360 (D.C. Cir. 2003), the district court noted.

Both executive orders were issued to promote workers’ knowledge of their rights and thereby improve workers’ productivity. “Plaintiffs fail to explain why a substantively different posting—one that is not claimed to be factually inaccurate—whose promulgation was based on nearly the same rationale found acceptable in UAW, compels a different result. It does not,” the district court stated.

Administrative Procedure Act

The court also rejected the argument that the posting rule violates the APA because it is an arbitrary and capricious interpretation of the Procurement Act.

NAM argued that the posting rule is arbitrary and capricious because the DOL’s justification for the rule “reveals no evidence whatsoever to support the conclusion that requiring all contractors to post a notice in any way improved procurement efficiency.”

However, the court again relied on UAW in holding that “This case is again no different than UAW. The court of appeals concluded there that even an ‘attenuated’ link between a Beck rights posting and procurement policy was sufficient to pass muster under the Procurement Act, even though ‘one can with a straight face advance an argument claiming opposite effects or no effects at all,’ ” the district court stated, quoting from UAW.

No NLRA Pre-Emption

NAM argued that Section 8(c) of the NLRA protects the right of employers to remain silent regarding employee rights under the NLRA. Therefore, it maintained, the posting rule was pre-empted.

The concept of Garmon pre-emption (so named for the case of San Diego Building Trades Council, Millmens’ Union, Local 2020 v. Garmon, 359 U.S. 236 (1959)) applies to regulation of activities that are arguably protected by Section 7 of the NLRA or that constitute an unfair labor practice under Section 8.

However, the court noted that Garmon pre-emption did not apply in UAW. The court there said, “Plaintiffs have pointed to no specific right covered by the [posting] order that is arguably protected by the NLRA.”

The district court asserted, “The same reasoning—and result—occurs here. Just as the refusal to post the Beck rights notice was not protected activity under Section 8(c), the refusal to post the notice here is not protected activity under that section.”

NAM also argued that Lodge 76, International Association of Machinists & Aerospace Workers, AFL-CIO v. Wisconsin Employment Relations Commission, 427 U.S. 132 (1976), prohibits regulation of labor-management activities that Congress intended to be unregulated and asserted that rights posting is one of these protected activities. If Congress wanted a federal agency to have the authority to create a notice posting requirement, NAM argued, it would have expressly granted such power in the NLRA. Because no such express rulemaking authority is granted in that statute, NAM asserted that Congress intended that speaking or refraining from speaking through a government-required notice should remain unregulated.

Rejecting this argument, the court said, “There is nothing in the posting notice that either prevents an employer (or an employee) from posting or distributing other notices to promote their own labor goals or forces an employer to make any comment about the issue at all. Because the posting rule does not frustrate effective implementation of the NLRA by limiting or prohibiting the use of self-help, the rule is not pre-empted under Machinists.”

This case is National Association of Manufacturers v. Perez, No. 1:13-cv-01998 (D. D.C. 2015).

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.

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