IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
CHAMBER OF COMMERCE OF THE UNITED
STATES OF AMERICA,
et al.
Plaintiffs,
v.
NATIONAL LABOR RELATIONS BOARD,
et al.,
Defendants
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Case No. 2:11-cv-02516-DCN
Memorandum in Support of Cross-
Motion for Summary Judgment
In this proceeding, the Chamber of Commerce of the United States of America and the
South Carolina Chamber of Commerce (“the Chamber”) are challenging a rule issued by the
National Labor Relations Board (“NLRB” or “the Board”) entitled Notification of Employee
Rights Under the National Labor Relations Act, 76 Fed. Reg. 54,006 (August 30, 2011) (to be
codified at 29 C.F.R. pt. 104) (“Rule”). The Rule imposes a duty on employers within the
Board’s jurisdiction to post an official government notice entitled, “Employee Rights Under the
National Labor Relations Act.” The Rule corrects the long-standing anomaly that, until now, the
Board has been almost unique among agencies and departments administering major Federal
labor and employment laws in not requiring covered employers to routinely post notices at their
workplaces informing employees of their statutory rights and the means by which to remedy
violations of those rights. The prevailing practice reflects a common understanding that such
notices are a minimal necessity to ensure that employees are informed of their workplace rights.
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2
As demonstrated below, this Rule is both within the Board’s statutory authority and
reasonable, and consequently, the Board is entitled to summary judgment.
1
STATEMENT OF FACTS
On December 22, 2010, the Board issued a Notice of Proposed Rulemaking seeking
comment on a regulation that would require employers subject to the National Labor Relations
Act (“NLRA” or “the Act”), 29 U.S.C. §§ 151-169, to “post notices informing their employees
of their rights as employees under the NLRA.” Proposed Rules Governing Notification of
Employee Rights Under the National Labor Relations Act, 75 Fed. Reg. 80,410 (December 22,
2010) (Member Brian Hayes, dissenting at 80,415). After a notice-and-comment period, on
August 30, 2011, the Board published the Rule setting forth the Board’s review of these
comments on the proposal and incorporating some changes suggested by commenters. 76 Fed.
Reg. 54,006, 54,046–50 (August 30, 2011) (Member Hayes, dissenting at 54,037-42).
Thereafter, the Board amended the Rule to change the effective date from November 14, 2011 to
January 31, 2012. 76 Fed. Reg. 63,188 (October 12, 2011).
In the interim, on September 19, 2011, the Chamber filed a complaint challenging the
Rule, seeking declaratory and injunctive relief. On October 14, 2011, the Court approved the
parties’ agreed-upon proposed summary judgment briefing schedule, providing for Cross-
Motions for summary judgment to be filed by November 9, 2011, and Responses in opposition
by December 7, 2011. A hearing on these motions is scheduled for January 11, 2012.
1
Citations to the administrative record, filed in conjunction with the Board’s motion for
summary judgment and memorandum in support, are in the following format: “A.R. NLRB-
000000.”
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ARGUMENT
I. Standard of Review
Where, as here, the Chamber’s claims involve a review of a final agency action under the
Administrative Procedure Act (“APA”), 5 U.S.C. § 702, the District Court must determine,
“whether on the administrative record, the agency’s action was in violation of the APA’s
provisions.” Shipbuilders Council of Am. v. U.S. Coast Guard, 578 F.3d 234, 241 (4th Cir.
2009) (internal quotations omitted). Under the APA sections at issue, a court may set aside
agency action where it is “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law,” 5 U.S.C. § 706(2)(A) (Compl. ¶¶ 18, 34, 43, 47, 72) and where it is “in
excess of statutory jurisdiction, authority, or limitations or short of statutory right.” 5 U.S.C.
§ 706(2)(C) (Compl. ¶ 27). “The scope of review under the ‘arbitrary and capricious’ standard is
narrow and a court is not to substitute its judgment for that of the agency.” Motor Vehicles Mfrs.
Ass'n of U.S., Inc., v. State Farm Mut. Ins. Co., 463 U.S. 29, 43 (1983) (“State Farm”).
The Fourth Circuit has explained that, under the “highly deferential” arbitrary and
capricious standard, it “‘presumes the validity of agency action.’” Ohio Valley Environmental
Coalition v. Aracoma Coal Co., 556 F.3d 177, 192 (4th Cir. 2009). A court must uphold an
agency's action where the agency has considered the relevant factors and articulated “a rational
connection between the facts found and the choice made.” Id. (quoting State Farm, 463 U.S. at
43).
II. The Board’s Rule Requiring Employers to Post a Notice of Employee Rights Is a
Reasonable Exercise of the Board’s Statutory Authority
The Chamber’s APA challenge to the Board’s notice-posting rule should be rejected
because the Rule is a proper exercise of the Board’s substantive rulemaking authority under
Section 6 of the NLRA, 29 U.S.C. § 156, and alternatively, is a valid exercise of the Board’s
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authority under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837
(1984), to fill a statutory gap. The Rule is accompanied by a well-reasoned and comprehensive
explanation that provides a rational connection between the facts found by the Board and the
regulatory choices it made.
A. The Rule Is Within the Board’s Substantive Rulemaking And Statutory Gap-
Filling Powers.
Section 6 of the NLRA gives the Board “broad rulemaking authority,” to promulgate
regulations that the Board deems “necessary to carry out the provisions of [the Act].” Am. Hosp.
Ass’n v. NLRB, 499 U.S. 606, 613 (1991) (“AHA”) (quoting 29 U.S.C. § 156). “Where the
empowering provision of a statute states simply that the agency may ‘make . . . such rules and
regulations as may be necessary to carry out the provisions of this Act,’ . . . the validity of a
regulation promulgated thereunder will be sustained so long as it is ‘reasonably related to the
purposes of the enabling legislation.’” Mourning v. Family Publ’ns Serv., Inc., 411 U.S. 356,
369 (1973) (citation and footnote omitted; first ellipsis in original). In light of Congress’s
express conferral of legislative rulemaking authority in Section 6 and the substantial deference
owed to the Board’s determination of necessity under that provision, the Board’s regulations
must be upheld under Mourning because they are “reasonably related” to the purposes of the
NLRA. See Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81, 86 (2002); see also NLRB v.
J. Weingarten, 420 U.S. 251, 266 (1975) (“Weingarten”).
Alternatively, this Court may uphold the Board’s regulations under the equally
deferential standard established in Chevron. 467 U.S. 837 (1984); see Mayo Found. for Med.
Educ. & Research v. United States, 131 S. Ct. 704, 714 (2011) (explaining that the Court has
applied Chevron deference to rules promulgated by administrative agencies with rulemaking
authority expressed in general terms like Section 6). The Supreme Court has remarked that
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“[t]he power of an administrative agency to administer a congressionally created . . . program
necessarily requires the formulation of policy and the making of rules to fill any gap left,
implicitly or explicitly, by Congress.” Morton v. Ruiz, 415 U.S. 199, 231 (1974), quoted in
Chevron, 467 U.S. at 843. Under the familiar test articulated by the Supreme Court in Chevron,
this Court must defer to the Board’s permissible and reasonable interpretation of a statutory gap
left by Congress in the NLRA. Because the Board’s Rule here reasonably fills such a gap, the
regulation also passes muster under Chevron.
1. The Regulation at Issue in This Case is Reasonably Related to the
Purposes of the Act under Mourning.
The National Labor Relations Act reflects Congress’s determination that substantial
burdens on commerce are caused by certain employer and labor union practices as well as by the
inherent “inequality of bargaining power between employees . . . and employers.” 29 U.S.C.
§ 151. To address these problems, Congress chose to “encourag[e] the practice and procedure of
collective bargaining” and to “protect[] the exercise of workers of full freedom of association,
self-organization, and designation of representatives of their own choosing.” Id. To those ends,
Section 7 of the NLRA sets forth the core rights of employees “to self-organization”; “to form,
join, or assist labor organizations”; “to bargain collectively”; and “to engage in other concerted
activities,” including in the nonunion setting; as well as the right “to refrain from any or all such
activities.” Id. § 157. Section 8, in turn, defines and prohibits union and employer “unfair labor
practices” that infringe on employees’ Section 7 rights, id. § 158, while Section 10 authorizes the
Board to adjudicate unfair labor practice claims, subject to a six-month statute of limitations. Id.
§ 160. Finally, Section 9 authorizes the Board to conduct representation elections and issue
certifications. Id. § 159.
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The Rule gives effect to the Board’s reasonable judgment that the full and free exercise
of NLRA rights depends on employees knowing that those rights exist and that the Board
protects those rights. That need arises in part because the NLRA does not give the Board or its
General Counsel roving investigatory powers. Although Section 10 of the Act specifically
empowers the Board to “prevent” unfair labor practices, id. § 160(a), the Board may not
investigate an unfair labor practice until a charge is filed. 2 The Developing Labor Law 2683
(John E. Higgins, Jr. ed., 5th ed. 2006); A.R. NLRB-000102. In addition, union election
“procedures are set in motion with the filing of a representation petition.” Id. at 2662; A.R.
NLRB-000100. In both instances, the initiating document is filed by a private party. Id. at 2683
(citing 29 C.F.R. §102.9), A.R. NLRB-000102; id. at 2662-63 (citing 29 U.S.C. § 159(c)(1)(A),
(B), and (e)(1), A.R. NLRB-000100-000101). Therefore, employee knowledge of NLRA rights
and how to enforce them within statutory timeframes is crucial to effectuation of Congress’s
national labor policy.
The Rule furthers the Act’s purposes by informing employees of both the Act’s core
protections and the Board’s processes. As the Board stated, notices of workplace rights are
commonly required to be posted in the workplace and the Board stands almost alone in not
having a similar requirement. 76 Fed. Reg. at 54,007-07. The Rule addresses this anomaly by
requiring employers to post in the workplace an official Board notice reciting employee rights
under Section 7 and examples of employer and labor union misconduct prohibited by Section 8.
The notice also informs employees how to contact the Board for additional information or to
report a violation of the Act. The regulatory mandate to post this notice reflects the Board’s
sensible determination that the NLRA’s objectives of “encouraging the practice and procedure of
collective bargaining” and “protecting the exercise of workers of full freedom of association,
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self-organization, and designation of representatives of their own choosing,” 29 U.S.C. § 151,
are furthered by this new requirement. As the Board noted, 76 Fed. Reg. at 54,010, a similar
conclusion was reached by the Department of Labor over sixty years ago when it promulgated a
regulation requiring employers to post a workplace notice pursuant to the Fair Labor Standards
Act (FLSA).
2
Consistent with the views of the scholars who first urged the Board to consider
adopting the same kind of posting requirement,
3
the administrative record contains unrebutted
studies and numerous comments (discussed below at pp. 24-27) confirming the reasonableness
of the Board’s conclusion that there is a significant lack of public awareness of the NLRA’s
protections and procedures. Therefore, given the critical link between employees’ timely
awareness of their NLRA rights and the fulfillment of the Act’s objectives, the Board’s decision
to require the posting of an informational notice in the workplace is, at the very least,
“reasonably related” to the purposes of the Act as required by Mourning.
The notice-posting requirement imposes no onerous burden on employers, many of
whom are already subject to similar requirements under various federal, state, and local
workplace laws. See Mourning, 411 U.S. at 371 (measuring the benefits and burdens of a
challenged regulation). The Board emphasizes that all an employer must do to comply with the
2
See 14 Fed. Reg. 7516, 7516 (Dec. 16, 1949) (finding that “effective enforcement of the
[FLSA] depends to a great extent upon knowledge on the part of covered employees of the
provisions of the act and the applicability of such provisions to them”).
3
See 76 Fed. Reg. at 54,006 (citing Peter D. DeChiara, The Right to Know: An Argument for
Informing Employees of Their Rights under the National Labor Relations Act, 32 Harv. J. on
Legis. 431, 433-34 (1995), A.R. NLRB-000066-000067; Charles J. Morris, Renaissance at the
NLRB—Opportunity and Prospect for Non-Legislative Procedural Reform at the Labor Board,
23 Stetson L. Rev. 101, 107 (1993), A.R. NLRB- NLRB-000584, 000586; and Charles J. Morris,
NLRB Protection in the Nonunion Workplace: A Glimpse at a General Theory of Section 7
Conduct, 137 U. Pa. L. Rev. 1673, 1675-76 (1989), A.R. NLRB-000513, 000515-16.
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regulation is simply post copies of the notice, which the Board provides free of charge, “in
conspicuous places where they are readily seen by employees,” 76 Fed. Reg. at 54,046 (to be
codified at 29 C.F.R. § 104.202(d)), and “on an intranet or internet site if the employer
customarily communicates with its employees about personnel rules or policies by such means.”
Id. at 54,047 (to be codified at § 104.202(f)). In light of these minimal obligations, the Board
has estimated that the average employer will incur compliance costs of less than $70 during the
first year the Rule is in effect and that these costs “will decrease dramatically in subsequent
years.” See 76 Fed. Reg. at 54,042 & n.190. Placing the principal responsibility for
disseminating relevant information on the employer, rather than leaving to each employee the
task of familiarizing herself with the Act’s provisions, is especially reasonable in light of these
minimal compliance costs. Further, this requirement is all the more sensible because the
workplace is “the location where [employees] are most likely to hear about their other
employment rights.”
4
The Board rejected arguments that the silence of Section 6—and indeed, the entire
NLRA—with respect to notice posting precluded such a rule. The Board pointed out in response
that it has “broad rulemaking authority,” as described by the Supreme Court in AHA. 76 Fed.
Reg. at 54,008 (quoting 499 U.S. at 613). In that case, the Supreme Court examined “the
structure and the policy of the NLRA” to reach the following conclusion:
As a matter of statutory drafting, if Congress had intended to curtail in a particular
area the broad rulemaking authority granted in § 6, we would have expected it to
do so in language expressly describing an exception from that section or at least
referring specifically to the section.
4
Id. at 54,017; see also Lake Butler Apparel Co. v. Sec’y of Labor, 519 F.2d 84, 89 (5th Cir.
1975) (declaring it “obvious” that an administrative agency may “require that [a notice of
employee rights] be posted in a place that would be obvious to the intended beneficiaries”); cf.
Eastex, Inc. v. NLRB, 437 U.S. 556, 574 (1978) (“[T]he plant is a particularly appropriate place
for the distribution of [NLRA] material.”).
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Id. (emphasis added). The Court could not have been clearer that unless the Board has been
“expressly” limited in some manner, Section 6 empowers the Board to make “such rules and
regulations as may be necessary to carry out the provisions of [the Act].” 29 U.S.C. § 156. No
such limitation was found in AHA, and no such limitation exists here. By basing their argument
on the silence of Section 6, the opponents turn AHA completely on its head.
The Board also reasonably rejected the argument of those who deny the Board’s authority
to administer the Act or promote its purposes unless a representation petition or unfair labor
practice charge has been filed under Sections 9 or 10, respectively. 76 Fed. Reg. at 54,011. As
the Board explained, Sections 9 and 10 obviously precludes the Board from “issu[ing]
certifications or unfair labor practice orders via rulemaking proceedings.” However, nothing in
those sections otherwise limits the Board’s broad legislative rulemaking authority under Section
6 to specify affirmative requirements that further the objectives of the NLRA and that are not
contrary to any statutory provision. Id. As discussed, the Supreme Court so construed the
Board’s rulemaking authority in AHA.
5
In this regard, the Board correctly observed that Sections 9 and 10 are not rigid restraints
on the Board’s ability to act. In addition to Section 6 rulemaking, and Section 9 and 10
proceedings, the Board has implied authority to take a variety of appropriate measures “to
prevent frustration of the purposes of the Act.” NLRB v. Nash-Finch Co., 404 U.S. 138, 142
(1971). For example, the Board has the implied authority to petition for writs of prohibition
against premature invocation of the review jurisdiction of the courts of appeals; to institute
5
See also NLRB v. Wyman-Gordon Co., 394 U.S. 759, 763-66 (1969) (plurality opinion)
(criticizing the Board for announcing a new, broadly applicable requirement for all election cases
through adjudication rather than rulemaking pursuant to Section 6).
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contempt proceedings for violation of enforced Board orders; and to file claims in bankruptcy for
Board-awarded backpay. See In re NLRB, 304 U.S. 486, 496 (1938); Amalgamated Util.
Workers v. Con. Edison Co., 309 U.S. 261 (1940); Nathanson v. NLRB, 344 U.S. 25 (1952),
respectively. Relying on that precedent in Nash-Finch, the Supreme Court concluded that the
Board also has implied authority “to enjoin state action where [the Board’s] federal power
preempts the field.” 404 U.S. at 142. As the Board reasonably inferred, if it can use implied
powers to “prevent frustration of the purposes of the Act,” id. at 142, it can surely use its express
Section 6 rulemaking power to do so.
6
Therefore, because the Board’s regulation is “reasonably related to the purposes of the
enabling legislation,” and does not unduly burden the subjects of the regulation, this Court
should uphold the Rule as a valid exercise of the NLRB’s broad rulemaking authority under
Section 6. Mourning, 411 U.S. at 369.
2. The Regulation at Issue in This Case is authorized under Chevron and
Republic Aviation.
As an alternative basis for finding authority to issue this Rule, the Board concluded
that—regardless of its power to issue legislative rules that are subject to limited judicial review
under Mourning—the Rule is also authorized as an exercise of its Chevron authority. Chevron
provides a two-step inquiry. Under the first step, the court’s task is to “employ[] traditional tools
of statutory construction” to determine “whether Congress has directly spoken to the precise
question at issue.” 467 U.S. at 843. And, in step two, where “the statute is silent or ambiguous
6
76 Fed. Reg. at 54,011-12; see Wyman Gordon Co., 394 U.S. at 762-66, 777-83, where a
majority of the justices were in agreement that the Board’s rulemaking power included the
authority to resolve the question whether the goal of an informed employee electorate would be
advanced if employers were required to provide the names and addresses of all eligible voters in
advance of all Board elections.
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with respect to the specific issue, the [next] question for the court is whether the agency’s answer
is based on a permissible construction of the statute.” Id.
a. Chevron Step 1
Step one is simple enough: Congress clearly has not “directly spoken to the precise
question at issue.” Id. As the Chamber has noted, the Act does not mention notice posting.
Compl. ¶¶ 19-27. In addition, as the Board noted in the Rule, there is no suggestion in the
legislative history of the NLRA or any of the subsequent amendments thereto that Congress “had
considered and rejected inserting such a requirement into the Act.” 76 Fed. Reg. 54,013.
In this statutory setting, Chevron supports the Board’s rejection of the argument by the
Chamber and other Rule opponents that the silence of the NLRA with respect to notice posting is
an expression of a deliberate choice by Congress to preclude an NLRA notice-posting
requirement. The opponents’ argument overlooks that there are many possible reasons why
Congress did not include an express notice-posting provision in the NLRA like the ones it
included in the Railway Labor Act, which predates the NLRA, or in subsequently enacted
employment statutes. 76 Fed. Reg. at 54,013. As the Supreme Court suggested with respect to
legislative silences like the one at issue, “Perhaps that body consciously desired the [agency] to
strike the balance at this level . . . ; perhaps it simply did not consider the question at this level;
and perhaps Congress was unable to forge a coalition on either side of the question . . . .”
Chevron, 467 U.S. at 865. But, “[f]or judicial purposes, it matters not which of these things
occurred.” Id. Accordingly, “the contrast between Congress’s mandate in one context with its
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silence in another suggests not a prohibition but simply a decision not to mandate any solution in
the second context, i.e., to leave the question to agency discretion.”
7
For similar reasons, the Board reasonably rejected the argument of the opponents
(including the Chamber) that the Supreme Court’s construction of the NLRA in Local 357,
Teamsters v. NLRB, 365 U.S. 667, 675 (1961), requires the conclusion that the Board lacks the
statutory authority to create a “regulatory scheme” where the Act is silent. See 76 Fed. Reg. at
54,014; Comment of U.S. Chamber of Commerce, A.R. NLRB-004098-99. In Local 357, the
Court struck down a Board decision requiring certain “protective provisions” to appear in every
hiring hall arrangement. 365 U.S. at 671-72. The Court explained that the Board had failed to
give due regard to the first two words of the NLRA provision at issue in that case, Section
8(a)(3)—“by discrimination.”
Id. at 674-75 (quoting Radio Officers v. NLRB (A.H. Bull
Steamship Co.), 347 U.S. 17, 42-43 (1954)). The Court then detailed the extensive legislative
history concerning hiring halls and concluded that Congress deliberately chose a “selective
system for dealing with [the] evils” of hiring halls. Thus, the Board lacked statutory authority to
require broader regulation of hiring halls than what Congress had specifically chosen. Here, by
contrast, Congress has not directly spoken to the subject of NLRA notice-posting, either in
statutory language or in legislative history. Thus, unlike in Local 357 where Congressional
7
Cheney R.R. Co. v. ICC, 902 F.2d 66, 69 (D.C. Cir. 1990) (labeling the expressio unius est
exclusio alterius canon “an especially feeble helper” in Chevron cases). In addition, as the
Board observed, given that “[t]he fundamental premises and principles of the Railway Labor Act
are not the same as those which form the basis of the National Labor Relations Act,” it is no
surprise that provisions and concepts contained in the RLA are not mirrored in the NLRA.
76 Fed. Reg. at 54,013 (citing Bhd. of R.R. Trainmen v. Chi. River & Ind. R.R. Co., 353 U.S. 30,
31 n.2 (1957) (noting that “[t]he relationship of labor and management in the railroad industry
has developed on a pattern different from other industries”)); see also Trans World Airlines v.
Indep. Fed’n of Flight Attendants, 489 U.S. 426, 439 (1989) (noting “the many differences
between the statutory schemes” of the NLRA and the Railway Labor Act).
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intent was clear, and no statutory gap existed for the Board to fill, here, the statute is silent and
under Chevron step one, the Chamber’s argument that the Board is foreclosed from promulgating
a notice-posting requirement must fail.
In concluding it possessed the requisite authority to mandate the same kind of workplace
notice common under other workplace statutes, the Board also reasonably relied on the long-
standing administrative precedent of the Department of Labor, which promulgated a notice-
posting requirement through rulemaking despite Congress’s silence on notice posting in the
enabling act. Like the NLRA, the Fair Labor Standards Act (FLSA) does not contain a provision
expressly requiring employers to post a notice of pertinent employee rights. Yet, the Department
of Labor, pursuant to the FLSA’s recordkeeping requirements and its authority to promulgate
regulations to enforce those requirements (29 U.S.C. § 211(c)), adopted a notice requirement in
1949 that employers to this day must still follow. See 29 C.F.R. § 516.4 (2010). The Board is
unaware of any challenge to the Labor Department’s authority to promulgate or enforce the
FLSA notice requirement, which has been in effect for over 60 years.
8
b. Chevron Step 2
Because the statute is silent on notice posting, the Court must uphold the Board’s Rule so
long as it is “based on a permissible construction of the statute.” Chevron, 467 U.S. at 843. The
Court “need not conclude that the agency construction was the only one it permissibly could
have adopted.” Rust v. Sullivan, 500 U.S. 173, 184 (1991). Nor does this Court need to
conclude that it is “the best interpretation of the statute,” United States v. Haggar Apparel Co.,
8
See 14 Fed. Reg. 7516 (Dec. 16, 1949) (promulgating 29 C.F.R. § 516.18, the predecessor to
29 C.F.R. § 516.4). Opponents of the rule attempted to distinguish the FLSA notice-posting
requirement on the basis that the FLSA contains a “mandatory recordkeeping provision,” see
29 U.S.C. § 211(c), whereas the NLRA does not. 76 Fed. Reg. at 54,013. How this distinction
could make any difference is not apparent.
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526 U.S. 380, 394 (1999), nor even that it is the “most natural one.” Pauley v. BethEnergy
Mines, Inc., 501 U.S. 680, 702 (1991). The agency’s view is deemed to be reasonable so long as
it is not “flatly contradicted” by plain language. Dep’t of the Treasury v. Fed. Labor Relations
Auth., 494 U.S. 922, 928 (1990).
In exercising its gap-filling authority under Chevron, the Board reasonably interpreted
Section 8(a)(1) of the Act to impose a duty on employers to post the notices of employee rights
that the Board concluded are “necessary to ensure effective exercise of Section 7 rights.”
76 Fed. Reg. at 54,032. Section 8(a)(1) prohibits an employer “to interfere with, restrain, or
coerce employees in the exercise of the rights guaranteed in section 7.” The Supreme Court
recognized early on that Section 8(a)(1) grants the Board broad authority to address issues of
interference with employee rights that Congress did not specifically consider:
The Wagner Act did not undertake the impossible task of specifying in precise
and unmistakable language each incident which would constitute an unfair labor
practice. On the contrary, that Act left to the Board the work of applying the Act's
general prohibitory language in the light of the infinite combinations of events
which might be charged as violative of its terms.
Republic Aviation v. NLRB, 324 U.S. 793, 798 (1945) (emphasis added) (cited by Chevron,
467 U.S. at 844-45). For example, in the exercise of its recognized authority to adapt the Act “to
changing patterns of industrial life,” the Board has interpreted Section 8(a)(1) to bar an employer
from conducting an investigatory interview with an employee who has requested to be
accompanied by a representative. Weingarten, 420 U.S. at 260-267. This interpretation was
new, and the language of Section 8 does not mention any such right. And still this statutory
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interpretation was upheld because of the Board’s authority to explicate and adapt Section
8(a)(1).
9
Similarly here, the Board construed Section 8(a)(1) in light of “the dominant purposes of
the legislation.” Republic Aviation, 324 U.S. at 798. In so doing, it concluded that, in view of
the “strong nexus between knowledge of Section 7 rights and their free exercise,” an employer’s
failure to post the notice that the Board has found necessary to ensure the “effective exercise of
Section 7 rights” constitutes interference with those rights. 76 Fed. Reg. at 54,032. In reaching
this conclusion, the Board took note of the almost universal recognition that posting workplace
notices of workplace rights is a minimal necessity to ensure that employees are informed of their
rights. 76 Fed. Reg. at 54,006-07.
In adopting this construction, the Board considered and rejected the argument that
Section 8(a)(1) is limited to proscribing action, rather than failure to act. Id. The Board noted
many ways that Section 8(a)(1) is violated by failure to perform a duty. For example, in Truitt,
the Board held that employers have an obligation to provide factual support for certain claims in
bargaining, and that failure to do so violates both 8(a)(5) and 8(a)(1). Truitt Mfg. Co.,
110 NLRB 856, 857, 870 (1954), enf’d, 351 U.S. 149 (1956). This is so because “[i]t is
elementary that an employer's violation of § 8(a)(5) of the Act by wrongfully refusing to bargain
collectively with the statutory representative of its employees does ‘interfere with, restrain and
coerce’ its employees in their rights of self organization and collective bargaining, in violation of
9
Weingarten makes clear that when the Board fills the statutory gaps of Section 8(a)(1), courts
owe substantial deference to the Board’s determinations: “It is the province of the Board, not the
courts, to determine whether or not the ‘need’ [for a Board rule] exists in light of changing
industrial practices and the Board’s cumulative experience in dealing with labor-management
relations. For the Board has the ‘special function of applying the general provisions of the Act to
the complexities of industrial life,’ and its special competence in this field is the justification for
the deference accorded its determination.” 420 U.S. at 266 (citations omitted).
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16
§ 8(a)(1) of the Act.” Standard Oil Co. of Ca., Western Operations, Inc. v. NLRB, 399 F.2d 639,
642 (9th Cir. 1967). Whereas in Truitt, the Board relied upon the employer’s failure to perform
its duty to bargain under Section 8(a)(5) to support a finding of interference within the meaning
of Section 8(a)(1), here, the Board relied on Republic Aviation to conclude that Section 8(a)(1) is
sufficient authority to impose a duty upon employers to post an official government notice
informing employees of their core Section 7 rights. In both instances, the Board’s conclusion
that Section 8(a)(1) interference is established where there has been a breach of an employer’s
obligation to employees reflects a reasonable interpretation of the statutory language that easily
passes muster under Republic Aviation and Chevron.
The Board’s conclusion that an employer’s breach of the duty to post is reasonably
considered an interference with employee rights within the meaning of Section 8(a)(1) also finds
support in the interpretation of other notice-posting regulations. The Family and Medical Leave
Act (“FMLA”) Section 105(a)(1) states that “[i]t shall be unlawful for any employer to interfere
with, restrain, or deny the exercise of or the attempt to exercise, any right provided under this
title.” 29 U.S.C. § 2615(a)(1). This provision “largely mimics th[e] language of § 8(a)(1) of the
NLRA.” Bachelder v. Am. W. Airlines, 259 F. 3d 1112, 1123 (9th Cir. 2001). Like the NLRB
rule, the Department of Labor’s regulations specifically state that failure to post FMLA notice
“may constitute an interference with, restraint, or denial of the exercise of an employee's FMLA
rights.”
10
In causes of action under FMLA Section 105(a)(1), the courts rely upon this regulation
10
29 C.F.R. § 825.300(e). Under the specific remedial scheme for interferences with FMLA
rights, the lack of notice must be prejudicial to the employee. 29 U.S.C. § 2617(a)(1)(A)(i); see
Ragsdale, 535 U.S. at 89; Salas v. 3M Co., No. 08 C 1614, 2009 WL 2704580, *12 (N.D. Ill.
August 25, 2009). No such concerns apply to interference with Section 7 rights under
Section 8(a)(1) because, in contrast to the FMLA, Section 8(a)(1) violations may be found
where, considering the totality of the circumstances, the conduct has a reasonable tendency to
coerce or intimidate employees. See, e.g., NLRB v. Transpersonnel, Inc., 349 F.3d 175, 180
2:11-cv-02516-DCN Date Filed 11/09/11 Entry Number 21-1 Page 16 of 35
17
to interpret “interfere,” stating that failure to post notice may violate that section. Greenwell v.
Charles Machine Works, Inc., No. CIV–10–0313–HE, 2011 WL 1458565, **4-5 (W.D. Ok.
April 15, 2011); see Smith v. Westchester County, 769 F.Supp.2d 448, 467-68 (S.D.N.Y. 2011).
For these reasons, the Board reasonably concluded that, consistent with Section 8(a)(1)
and Chevron, the Board may require employers to post a notice of employee rights.
3. The Board Reasonably Concluded that its Notice-Posting Rule Does Not
Impair First Amendment Rights.
A number of the Rule’s opponents advanced the claim, urged by the Chamber here, that
the Rule impairs employer free speech rights under the First Amendment. Compl., ¶¶ 59-72.
The Board reasonably rejected that claim. 76 Fed. Reg. at 54,012. First, the notice does not
involve employer speech at all, but rather governmental speech, which is “not subject to scrutiny
under the Free Speech Clause.” Pleasant Grove City v. Summum, 129 S. Ct. 1125, 1129 (2009).
The Board, not the employer, will produce and supply posters informing employees of their legal
rights. The Board has sole responsibility for the content of these posters, and the poster, which
carries the Board’s seal and contains Agency contact information, explicitly states in bold
typeface that it is an “official Government Notice.” Nothing in the poster is attributed to the
employer, and the Rule does not require an employer representative to sign the poster or
otherwise indicate approval of its content.
11
These features confirm that the Board’s notice
(4th Cir. 2003). The FMLA also provides that an employer’s willful violation of its notice
posting requirement may result in civil monetary penalties. 29 U.S.C. § 2619(b).
11
By way of contrast, NLRA remedial notices, which must be posted for a limited time by
employers and unions who have been found to have committed unfair labor practices prohibited
by Section 8 of the Act, must be signed by a representative. See, e.g., Kiewit Power
Constructors Co., 355 N.L.R.B. No. 150 app. (2010)]“) (“WE WILL NOT discharge or otherwise
discriminate against any of you . . .”; “WE WILL[] . . . offer Brian Judd and William Bond full
reinstatement . . .”), enforced, 2011 WL 3332229 (D.C. Cir. Aug 3, 2011).
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18
implicates only government speech under controlling precedents. See Johanns v. Livestock
Mktg. Ass’n, 544 U.S. 550, 560, 565-67 (2005).
Second, this case is virtually indistinguishable from Lake Butler Apparel Co. v. Secretary
of Labor, 519 F.2d 84, 89 (5th Cir. 1975), where the Fifth Circuit rejected as “nonsensical” an
employer’s First Amendment challenge to the Occupational Safety and Health Act requirement
that it post an “information sign” similar to the one at issue here. As in Lake Butler, an employer
subject to the Board’s Rule retains the right to “differ with the wisdom of . . . this requirement
even to the point . . . of challenging its validity. . . . But the First Amendment which gives him
the full right to contest validity to the bitter end cannot justify his refusal to post a notice . . .
thought to be essential.” Id.
12
But even assuming arguendo that the notice-posting requirement implicates employer
speech interests, the Supreme Court has recognized that governments have “substantial leeway in
determining appropriate information disclosure requirements for business corporations.”
13
This
discretion is particularly wide when the government requires information disclosures relevant to
the employment relationship. Thus, as the D.C. Circuit observed in upholding a Department of
Labor regulation requiring federal contractors to post a notice informing employees of certain
NLRA rights, “an employer’s right to silence is sharply constrained in the labor context, and
12
See also Stockwell Mfg. Co. v. Usery, 536 F.2d 1306, 1309-10 (10th Cir. 1976) (dicta)
(rejecting a constitutional challenge to a requirement that an employer post a copy of an OSHA
citation).
13
Pacific Gas & Elec. Co. v. Pub. Utils. Comm’n, 475 U.S. 1, 15 n.12 (1985); see also Zauderer
v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985) (mandated disclosures of factual and
uncontroversial information that further a legitimate state interest, such as preventing consumer
deception, are constitutional as long as they are not “unjustified or unduly burdensome”); N.Y.
State Rest. Ass’n v. N.Y. City Bd. of Health, 556 F.3d 114, 133 n.21 (2d Cir. 2009) (“NYSRA”)
(explaining that Zauderer applies “even if [disclosure requirements] address non-deceptive
speech”).
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19
leaves it subject to a variety of burdens to post notices of rights and risks.” UAW-Labor
Employment & Training Corp. v. Chao, 325 F.3d 360, 365 (D.C. Cir. 2003) (citing Lake Butler,
519 F.2d at 89). For these reasons, the Board’s notice-posting requirement is not in conflict with
the First Amendment.
4. The Board Reasonably Concluded that its Notice-Posting Rule Does not
Impair Section 8(c) Rights.
Section 8(c) of the Act, 29 U.S.C. § 158(c), shields from unfair labor practice liability
“[t]he expressing of any views, argument or opinion,” provided that “such expression contains no
threat of reprisal or force or promise of benefit.” Id. (emphasis added). The purpose of this
provision is to encourage the free flow of information from both unions and employers to
employees. See Linn v. United Plant Guard Workers, Local 114, 383 U.S. 53, 62 (1966)
(explaining that Section 8(c) “manifests a congressional intent to encourage free debate on issues
dividing labor and management”); Chamber of Commerce v. Brown, 554 U.S. 60, 67-68 (2008)
(same).
The Board reasonably concluded that requiring employers to post an official government
notice summarizing employees’ rights under the NLRA is fully in accord with the language and
policy of Section 8(c). First, the posting of a government-supplied notice setting forth the
government’s view of what the law requires “does not by any stretch of the imagination reflect
one way or the other on the views of the employer.” Lake Butler, 519 F.2d at 89. Thus, the Rule
simply does not involve activity within the purview of Section 8(c). Second, as the Board
repeatedly emphasized, the notice-posting requirement does not trench upon employers’ ability
to express their own “views” because “employers remain free under this rule—as they have in
the past—to express noncoercive views regarding the exercise of these rights as well as others.”
76 Fed. Reg. at 54,012 n.44. And finally, the Board’s posters are in complete harmony with
2:11-cv-02516-DCN Date Filed 11/09/11 Entry Number 21-1 Page 19 of 35
20
Congress’ judgment to encourage the free flow of information because they communicate to
employees essential information concerning their rights under the NLRA and the means
available for their enforcement.
5. The Notice of Employee Rights Under the NLRA Is Neutral.
The mandated notice is both even-handed and factual. The Chamber’s attack on the
notice, Compl., ¶¶ 33-47, fails fairly to acknowledge that the Board’s essential task in this
rulemaking was to construct a user-friendly notice, succinctly conveying the necessary
information to employees about NLRA rights and obligations. The Board recognized that by its
very nature, such a notice, meant to be read quickly by tens of millions of employees, cannot
convey all the information that might be, for example, in a treatise, or on a website. The Board
explained that its goal of concision and readability did not permit inclusion of an exhaustive list
of exceptions, limitations, and qualifications; instead, at the top and bottom of the notice the
reader is directed to contact the Board to obtain more detailed information.
14
In furtherance of its “approach to present a balanced and neutral statement of rights,” the
Board responded to public comments by revising the notice’s introduction to emphasize the right
both to engage in protected activity and the right to refrain from such activity. Id. at 54,020; see
also id. at 54,048. Thus, the very first paragraph of the notice explains that:
[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
14
As the Board explained, its primary goal in the Notice was to explain “employee rights
accurately and effectively without going into excessive or confusing detail.” 76 Fed. Reg. at
54,018. Thus, it specifically wished to provide “employees with more than a rudimentary
overview of their rights under the NLRA, in a user-friendly format, while simultaneously not
overwhelming employees with information that is unnecessary and distracting in the limited
format of a notice.” Id.
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21
misconduct. This Notice gives you general information about your rights, and
about the obligations of employers and unions under the NLRA.
76 Fed. Reg. at 54,048 (footnote omitted and emphasis added). And so, employees’ Section 7
rights to engage in or refrain from engaging in protected concerted activity, as well as the fact
that both employers and unions possess legal obligations under the NLRA, are highlighted. The
Board further explained that the right to refrain is listed last because it is patterned after the list
of rights contained in Section 7 of the NLRA. 29 U.S.C. § 157.
The notice format then contains three different lists: first, examples of Section 7
employee rights, with the final item being that employees may “[c]hoose not to do any of these
activities, including joining or remaining a member of a union;”
15
another, giving examples of
employer misconduct; and a third, corresponding list of examples of union misconduct. The
notice proceeds to explain that if a union is selected by the employees, both the employer and the
union must bargain in good faith and that the union must represent the employees fairly in
bargaining and enforcing the agreement. Id. at 54,048-49. Thus, it is clear that the Board has
made extensive efforts to produce a “balanced and neutral statement of rights.” Id. at 54,020.
6. The Board Reasonably Chose to Exclude an Explanation of Section 14(b)
From the Notice.
The Board’s decision not to mention or explain the impact of certain state laws enacted in
accordance with Section 14(b) of the Act, 29 U.S.C. § 164(b), in a uniform, nationwide notice
was rational and well-supported. Section 14(b) recognizes the authority of states and territories
to craft a limited exception to Section 8(a)(3) of the NLRA. Under the first proviso to Section
8(a)(3), employers and unions may enter into union-security agreements requiring all employees
15
This notice language “reflects the language of the NLRA itself, which specifically grants
affirmative rights.” Id. at 54,020.
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22
in a particular bargaining unit to obtain and retain “membership” in the union on or after the
thirtieth day following entry on duty.
16
Although “[f]ederal policy favors permitting such
agreements,”
Oil, Chem. & Atomic Workers, Int’l Union v. Mobil Oil Corp., 426 U.S. 407, 420
(1976), Congress added Section 14(b) to the Act in 1947 to “recognize[] and affirm[]” the
preexisting authority of states and territories to enact “so-called ‘right-to-work’ measure[s]” that
prohibit or restrict agreements conditioning employment on employees’ meeting the financial
obligations of union membership.
17
Given the Board’s objectives of clarity, concision, and overall readability for the notice, it
was not unreasonable for the Board to reject various employer suggestions that a notice of core
employee rights under the NLRA should also include a discussion of the rights a limited number
of employees have under state laws in consequence of Section 14(b). Right-to-work laws within
the ambit of Section 14(b) only operate when three conditions are met: (1) a state or territory has
passed such a law, (2) the employees at issue are represented by a union, and (3) that union seeks
16
29 U.S.C. § 158(a)(3). In enacting this provision, Congress sought to eliminate abuses
associated with the “closed shop, which requires preexisting union membership as a condition of
obtaining employment,” S. Rep. No. 80-105, at 6 (1947), “and yet give employers and unions
who feel that [union-security] agreements promoted stability by eliminating ‘free riders’ the right
to continue such arrangements,” id. at 7. The proviso permits the achievement of these ends
because when union “membership” is a condition of employment, it requires nothing more than
the payment of dues and initiation fees after the employee has been hired. NLRB v. Gen. Motors
Corp., 373 U.S. 734, 742 (1963).
17
NLRB v. Pueblo of San Juan, 276 F.3d 1186, 1198 (10th Cir. 2002) (en banc). The Chamber
is therefore incorrect when it asserts that the enactment of Section 14(b) in 1947 as part of the
Taft-Hartley amendments to the NLRA “constituted a fundamental change in the direction of
federal labor law.” Compl. ¶ 35. Rather, that provision merely made explicit what had
previously been implicit and ensured the preservation of the status quo under which states could
enact laws prohibiting union-security agreements. See Retail Clerks Int’l Ass’n, Local 1625 v.
Schermerhorn, 375 U.S. 96, 99-102 & n.9 (1963) (noting the abundant legislative history
indicating that Congress’s intent “was to continue the policy of the Wagner Act and avoid
federal interference with state laws in this field”).
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23
a union-security clause in a collective bargaining agreement with an employer.
18
The Board’s
finding that including information on this issue was “unnecessary,” logically followed from the
Board’s more basic editorial judgment not to “mention or explain [union-security] arrangements”
at all in the notice. 76 Fed. Reg. at 54,022. Having made the decision to omit any reference to
union-security arrangements on the ground that they potentially apply only to the small
percentage of the workforce that is already represented by unions, the Board sensibly found “no
reason to list . . . exception[s] to union-security requirements” such as right-to-work laws, which
apply to an even smaller subset of union-represented employees. Id. Exclusion of right-to-work
laws was also in full accord with the Board’s decision not to list discrete rights that arise from
external sources of law.
19
By its very nature, an 8”x17” poster does not have the space needed to exhaustively list
all rights and remedies connected to the NLRA. Because state right-to-work laws have a very
limited scope of application compared to other NLRA rights, the Board was neither arbitrary nor
capricious in omitting reference to them from its uniform, nationwide notice. For these reasons,
the Board is entitled to summary judgment on Count II of the Chamber’s complaint.
18
Under the Act, no employer is required to agree to such a clause. See 29 U.S.C. § 158(d).
19
See id. at 54,022, 54,023. Although the Chamber now complains that the Board’s omission of
discussion of Section 14(b) in the notice deprives employees of information about “fundamental”
rights (Compl. ¶¶ 35-43), it is significant that the Chamber submission to the Board during the
rulemaking proceeding does not even mention the omission of right-to-work laws from the
proposed notice as a potential shortcoming. Comment of U.S. Chamber of Commerce, A.R.
NLRB-004096-004106. The Coalition for a Democratic Workplace (“CDW”), whose
rulemaking comment the Chamber adopted, made a fleeting reference to right-to-work laws and
suggested only that their omission from the Board’s notice might “mislead” the public into
questioning “the Board’s neutral[ity].” Comment of CDW, A.R. NLRB-003696, 003708 at n.
23.
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24
7. The Board’s Rule Offered Sufficient Explanation For its
Finding That Employees Have Insufficient Knowledge of Their NLRA
Rights.
In its Rule, the Board presented a thorough, reasoned explanation for the new Rule and
set forth its supporting findings in detail. The Board stressed that its “greatest concern” was that
the Board is almost unique in lacking any general requirement that all employees covered by the
NLRA be notified of their rights. 76 Fed. Reg. at 54,006. Given the common practice of
workplace notice-posting under comparable workplace statutes, the Board reasonably inferred
that a posting requirement will increase employees' awareness of their rights. Id. at 54006-07,
54014-15.
Exercising its responsibility to adapt the Act to “the changing patterns of industrial life,”
the Board reasonably concluded that this longstanding gap in the NLRA’s protections should be
addressed now. Fed. Reg. at 54013 (citing to Weingarten, 420 U.S. at 266). No one disputes
that rates of unionization have decreased dramatically since their high point in the 1950s. As the
Board noted, “Fewer employees today have direct, everyday access to an important source of
information regarding NLRA rights and the Board’s ability to enforce those rights.” 76 Fed.
Reg. at 54,013. Consequently, mechanisms that may have made the lack of notice tolerable
previously are no longer working in an employment environment where the traditions of
collective bargaining are far less visible than in the past, and Section 7 rights are less well-
known. Taking account of these other workplace notice postings together with the sharp
decrease in employees’ direct connection to sources of NLRA information helped convince the
Board to issue the Rule. Giving employees the same kind of notice of their NLRA rights that is
the norm with respect to other employee protection regimes is a reasonable means by which to
further the provisions of the Act.
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25
The Board also determined that other factors justified the need to impose the notice
requirement, including the high percentage of immigrants in the labor force who are unlikely to
be familiar with the Act, and studies indicating that employees and high school students about to
enter the workforce are mostly uninformed about labor law.
20
And in the notice and comment
process, numerous comments from individuals, union officials and worker assistance
organizations confirmed that most employees are ignorant of their NLRA rights. Id. at 54,015-
016. As one commenter put it: “I had no idea that I had the right to join a union, and was often
told by my employer that I could not do so,” comment H.86, A.R. NLRB-00-3834, and another
said, “it is my experience that most workers are almost totally unaware of their rights under the
NLRA.” Comment H.16, A.R. NLRB-003622. Numerous comments from Rule opponents
themselves revealed such basic misunderstanding of the Act’s requirements as, “Belonging to a
union is a privilege and a preference – not a right,” comment H. 136, A.R. NLRB-003954, and
“If my employees want to join a union they need to look for a job in a union company.”
Comment H.138, A.R. NLRB-003957. Moreover, many opponents of the Rule objected that it
will result in increased unionization, thereby tacitly recognizing that the notice will provide
information that employees currently lack. Id. at 54,016; see, e.g., comment H.17, A.R. NLRB-
003623. In response to comments criticizing the level of factual support for the Rule, the Board
explained: “To the extent that employees’ general level of knowledge is uncertain, the Board
believes that the potential benefit of a notice posting requirement outweighs the modest cost to
20
76 Fed. Reg. at 54,014-015; Dana Bramel & Clemencia Ortiz, Tomorrow’s Workers and
Today’s Unions: A Survey of High School Students, L
ABOR STUDIES JOURNAL, Winter 1987-88,
A.R. NLRB-004149-004164; Tom Juravich, Anti-Union or Unaware? Work and Labor as
Understood by High School Students, L
ABOR STUDIES JOURNAL. Fall 1991, A.R. NLRB-004166-
004182; Robert J. Amann & Ronnie Silverblatt, High School Students’ Views on Unionism,
L
ABOR STUDIES JOURNAL, Winter 1987-88; A.R. NLRB-004184-004200.
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26
employers.” Id. at 54,015. After all, even “if only 10 percent of workers were unaware of [their
NLRA] rights, that would still mean that more than 10 million workers lacked knowledge of one
of their most basic workplace rights.” Id. at 54,018 n. 96.
In drawing such inferences from the record, the Board acted well within its authority.
Agencies are not required to commission independent studies to confirm their experienced
judgment.
21
And they are permitted to support their conclusions from the anecdotal evidence in
the record. Mansolf v. Babbitt, 125 F.3d 661, 670 (8th Cir. 1997). Significantly, as the Board
noted in the Rule, the Rule’s opponents themselves put in no “empirical data” or ”contrary
studies” indicating that many employees do understand their Section 7 rights. Id. (“Certainly,
the Board has been presented with no evidence persuasively demonstrating that knowledge of
NLRA rights is widespread among employees.”) Although the Agency must establish the
reasonableness of its position, its opponents have posited no serious reason to disbelieve the
evidence received in the course of the notice and comment rulemaking.
The Board further explained why the existence of the Internet is not sufficient to
conclude that American employees must be aware of their NLRA rights. Not only do many
employees lack easy access to the Internet, but the Board found it reasonable to assume that
employees who are ignorant of their rights are much less likely to seek out such information than
those who are basically aware of such rights and want to learn more. 76 Fed. Reg. at 54,017.
The Board also noted that the Section 7 right of employees (including non-union ones) to engage
in “concerted activities” for the purpose of “mutual aid and protection” is “the most
21
Chamber of Commerce v. SEC, 412 F.3d 133, 142 (D.C. Cir. 2005); see also Nat'l Ass'n of
Regulatory Util. Comm'rs v. FCC, 737 F.2d 1095, 1124 (D.C. Cir. 1984) (failure to conduct
independent study did not violate APA because notice and comment procedures “permit parties
to bring relevant information quickly to the agency's attention”).
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27
misunderstood” of the Section 7 rights, and “not subject to an easy Internet search by employees
who may have no idea of what terms to use, or even that such a right might be protected at all.”
Id.
Thus, the Board’s detailed, cogent reasoning for promulgating this notice-posting rule
demonstrates that it examined the relevant data and provided an explanation of its decision that
includes “a ‘rational connection between the facts found and the choice made.’” Ohio Valley,
556 F.3d at 192 (quoting State Farm, 463 U.S. at 43). The Board’s reasons satisfy the
deferential arbitrary and capricious standard of review, and consequently, the notice-posting rule
must be upheld.
8. The Enforcement Mechanisms At Issue Are Designed to Remedy
Violations of the Rule and Are a Reasonable Implementation of the NLRA.
a. The Rule’s Section 8(a)(1) Remedy is Within the Board’s
Authority.
As stated previously, the Board found it had authority to require notice posting on two
distinct bases: first, the Board’s broad legislative rulemaking authority under Mourning and
AHA; and second, the Board’s authority to interpret the Act, including Section 8(a)(1), under
Chevron. Because, as shown, the obligation to post a notice is authorized as an exercise of
legislative authority under Mourning, it follows that the obligation can be enforced under
Section 8(a)(1). 29 C.F.R. § 104.210. This is because, as explained above with respect to the
Truitt case, violations of basic NLRA duties interfere with Section 7 rights. Here, because the
requirement to post notice is expressly designed to “ensure effective exercise of Section 7
rights,” 76 Fed. Reg. at 54,032, violation of the Board’s legislative rule does “interfere with,
restrain, or coerce” employees in the exercise of Section 7 rights. 29 U.S.C. § 158(a)(1).
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28
In addition, as shown, the Board’s interpretation of Section 8(a)(1) to impose an
employer duty to post an official government notice of employee rights reflects a permissible
construction of a statute that is silent with respect to notice posting. For that reason, the Section
8(a)(1) remedy can also be upheld as a reasonable exercise of the Board’s gap-filling authority
under Republic Aviation and Chevron. Because the Board created the duty as an exercise of its
authority to interpret Section 8(a)(1), the Chamber’s argument that the Board impermissibly
created a “new” unfair labor practice fails under Republic Aviation and Chevron.
22
22
The Board noted in the Rule that if an unfair labor practice charge is filed for failure to post
the required notice, that “reasonable efforts” will be made “to persuade the respondent employer
to post the required employee notice expeditiously. If the employer does so, the Board expects
that there will rarely be a need for further administrative proceedings.” 76 Fed Reg. at 54,049 (to
be codified at Section 104.212(a)). The Chamber in Paragraph 29 of its complaint questions this
assurance, asserting that Section 3(d) of the NLRA, 29 U.S.C. § 153(d), “vests enforcement
authority in the Board’s General Counsel.” This assertion overlooks that Section 3(d) does not
affect the Board’s authority to dismiss complaints inconsistent with Board policy. See Inland
Container Corp., 298 NLRB 715 (1990) (summary judgment granted where complaint being
prosecuted should have been deferred to arbitration in accordance with Board policy). As the
Ninth Circuit early explained in rejecting a similarly expansive view of Section 3(d), “After a
complaint has been issued by the general counsel it remains, as before, the duty and function of
the Board to pass upon its jurisdiction, to determine whether unfair practices have been
committed, what remedy would best effectuate the policies of the Act, and whether to seek
enforcement of its order in the courts. . . .” Haleston Drug Stores v. NLRB, 187 F.2d 418, 422
(9th Cir. 1951); accord Frito Co., W. Div. v. N.L.R.B., 330 F. 2d 458, 463-464 (9th Cir. 1964)
(“It is now settled that the General Counsel's decision to investigate a charge or issue a complaint
is unreviewable by the Board. However, once the decision has been made to issue a complaint
and to prosecute it, the General Counsel has embarked upon the judicial process which is
reserved to the Board.”). Consistent with the Office of the General Counsel’s normal procedure
to prosecute cases on the basis of the Board’s policies, the General Counsel’s Division of
Operations Management has already issued a memorandum noting its intent to follow the
Board’s clear direction in this matter. See OM Memo 11-77 (Aug. 26, 2011), Attachment 1 at 9,
available at http://www.nlrb.gov/publications/operations-management-memos (last visited Nov.
3, 2011).
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29
b. The NLRB’s Interpretation Providing for Equitable Tolling of
Section 10(b)’s Statute of Limitations is Within Its Authority.
Section 102.214(a) of the Rule states that the Board “may find it appropriate” to
equitably toll the statute of limitations “if the employer has failed to post the required employee
notice, unless the employee has received actual or constructive notice that the conduct
complained of is unlawful.” 76 Fed. Reg. at 54033.
23
This provision merely restates well-
established equitable tolling doctrine. The doctrine protects employees who are “excusably
unaware that the conduct is unlawful because mandatory notice was not given.” 76 Fed. Reg.
54,031 at n. 137.
Traditional equitable exceptions apply whenever the statute is silent or ambiguous. The
Supreme Court has expressly stated that Section 10(b) is subject to such equitable doctrines. In
Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 392-98, n.11 (1982),
24
the Court held that the
timeliness provision of Title VII’s EEOC charge-filing requirement was subject to waiver,
23
The statute states: “Whenever it is charged that any person has engaged in . . . any such unfair
labor practice, the Board . . . shall have power to issue . . . a complaint . . . : Provided, That no
complaint shall issue based upon any unfair labor practice occurring more than six months prior
to the filing of the charge with the Board and the service of a copy thereof upon the person
against whom such charge is made, unless the person aggrieved thereby was prevented from
filing such charge by reason of service in the armed forces, in which event the six- month period
shall be computed from the day of his discharge.” 29 U.S.C. § 160(b).
24
See also Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 94-96 (1990) (noting strong
presumption that equitable tolling applies, “such a principle is likely to be a realistic assessment
of legislative intent”); Young v. United States, 535 U.S. 43, 49 (2002) (“It is hornbook law that
limitations periods are customarily subject to equitable tolling.”); Hallstrom v. Tillamook
County, 493 U.S. 20, 27 (1989); Honda v. Clark, 386 U.S. 484, 501 (1967); Glus v. Brooklyn E.
D. Terminal, 359 U.S. 231, 232-33 (1959) (equitable tolling is “[d]eeply rooted in our
jurisprudence”); Holmberg v. Armbrecht, 327 U.S. 392, 396-97 (1946) (equitable tolling is “read
into every federal statute of limitation”); cf. Henderson v. Shinseki, 131 S.Ct. 1197, 1204-05
(2011) (“claim-processing rules” are generally not jurisdictional, no matter how “mandatory” or
“emphatic” the statutory language); Union Pacific v. Brotherhood of Locomotive Eng’rs,
130 S.Ct. 584, 598-99 (2009); Arbaugh v. Y & H Corp., 546 U.S. 500, 515-16 (2006).
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estoppel and equitable tolling. In so concluding, the Court analogized the EEOC requirement to
the NLRA’s Section 10(b):
[T]he time requirement for filing an unfair labor practice charge under the
National Labor Relations Act operates as a statute of limitations subject to
recognized equitable doctrines and not as a restriction of the jurisdiction of the
National Labor Relations Board.
Thus, Zipes strongly supports the NLRB’s policy choice to apply tolling here. Indeed,
the Fourth Circuit has cited Zipes, suggesting that Section 10(b) “may be overcome by equitable
considerations” including “general principles of equitable tolling.” Kolomick v. United
Steelworkers of America, Dist. 8, 762 F. 2d 354, 356 (4th Cir. 1985). Deference under Chevron
also supports the Rule. As the D.C. Circuit stated, Section 10(b)’s “silence . . . clearly means
that Congress has not ‘directly spoken to the precise question at issue,’ so that the Board is free
to adopt any reasonable construction of the Act.” Lodge 64, IAM v. NLRB, 949 F.2d 441, 444
(D.C. Cir. 1991) (citing Chevron in deferring to the Board’s interpretation of § 10(b) fraudulent
concealment doctrine). That Section 10(b) provides an express exception for persons prevented
from timely filing due to military service does not foreclose the traditional equitable exceptions.
See Holland v. Florida, 130 S.Ct. 2549, 2560-62 (2010).
This particular tolling rule is also consistent with Fourth Circuit precedent. In Vance v.
Whirlpool Corp., 716 F.2d 1010, 1012-13 (4th Cir. 1983), the court interpreted the analogous
six-month statute of limitations in the Age Discrimination in Employment Act. The court found
“Zipes to be highly persuasive authority for interpreting the [statute as] subject to equitable
modification.” Id. at 1012. The court then considered whether failure to post notice required by
the ADEA justified tolling. The court held as follows:
Congress imposed this requirement [to post a notice] to insure that covered
employees would be informed of their rights, and in the present case Whirlpool’s
failure to post such a notice prevented Vance from learning of his ADEA rights at
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31
the time of his discharge. Under the circumstances the district court was correct
in holding that the 180-day period should be tolled by reason of Whirlpool’s
failure to post the statutory notice.
Id. at 1012-13 (emphasis added); see also English v. Pabst Brewing Co., 828 F.2d 1047, 1049
(4th Cir. 1987). Many other circuits agree.
25
The same is true for regulatory notices such as the
FLSA notice discussed above. See, e.g., Asp v. Milardo Photography, Inc., 573 F. Supp. 2d 677
(D. Conn. 2008) (applying equitable tolling to FLSA notice); Henchy v. City of Absecon, 148 F.
Supp. 2d 435, 438-39 (D.N.J. 2001). The Board’s tolling doctrine is in line with the long
tradition of equity practice. Accordingly, in light of Supreme Court precedent on equitable
tolling of Section 10(b) and the authority in the Fourth Circuit (and many other circuits)
supporting equitable tolling for notice-posting violations, the Board’s interpretation is a
permissible statutory interpretation under Chevron.
III. The Rule Fully Complied with the Regulatory Flexibility Act (RFA).
The RFA requires that a final rule contain either: (1) a description and analysis of the
effect that the rule would have on small entities, or (2) a certification that the rule, as
promulgated, will not have a significant economic impact on a substantial number of small
entities. See 5 U.S.C. §§ 603-605, 607. In this case, the Board certified that the Rule does not
impose a significant economic impact on any small entity subject to the Board’s jurisdiction. As
required by Section 605(b) of the RFA, the Board published its certification and a supporting
25
Mercado v. Ritz-Carlton San Juan Hotel, Spa & Casino, 410 F.3d 41, 46-47 (1st Cir. 2005);
Bonham v. Dresser Industries, Inc., 569 F.2d 187, 193 (3d Cir. 1977); Elliot v. Group Med. &
Surgical Serv., 714 F.2d 556, 563-64 (5th Cir. 1983); EEOC v. Ky. State Police Dep’t, 80 F.3d
1086, 1094-95 (6th Cir. 1996); Kephart v. Inst. of Gas Tech., 581 F.2d 1287, 1289 (7th Cir.
1978); Beshears v. Asbill, 930 F.2d 1348, 1351-52 (8th Cir. 1991); McClinton v. Alabama By-
Prods. Corp., 743 F.2d 1483, 1485-86 (11th Cir. 1984). The minority view appears to be
confined to dicta in a Tenth Circuit decision. See Wilkerson v. Siegfried Ins. Agency, Inc.,
683 F.2d 344, 347 (10th Cir. 1982).
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32
factual statement in the Federal Register, and sent both to the Chief Counsel for Advocacy of the
Small Business Administration. 76 Fed. Reg. 54,042. In reviewing an agency's compliance with
the RFA, courts are mindful that the Act does not require a specific outcome, nor does the statute
require any specific substantive measures. See Assoc. Fisheries of Maine. v. Daley, 127 F.3d
104, 114 (1st Cir. 1997). The courts only examine whether the agency made a reasonable, good
faith effort to carry out the RFA’s mandate.
26
The Board provided a detailed and clear factual basis for its certification. 76 Fed. Reg. at
54,042-045. It first identified the Rule’s compliance costs. Because this Rule requires solely
that employers post a free pre-printed notice, employers need only (1) learn where and how to
post the notice, (2) acquire the notice, and (3) post the notice. Id. at 54,042, 54045. Thus, the
Board estimated that compliance requires two employee work-hours for small entities: 30
minutes to learn the logistics of the Rule, 30 minutes to obtain the notice from the Board or its
website, and 60 minutes to post it.
27
The Board then applied data from the Bureau of Labor
Statistics to calculate that each hour of work costs employers $32.20. Thus, the Board estimated
that the Rule will cost each employer $64.40 in the first year, with dramatically decreased costs
26
Id.; Ranchers Cattlemen Action Legal Fund v. USDA, 415 F.3d 1078, 1101 (9th Cir. 2005)
(“To satisfy the RFA, an agency must only demonstrate a "reasonable, good-faith effort" to
fulfill its requirements.”); United States Cellular Corp. v. FCC, 254 F.3d 78, 88 (D.C. Cir. 2001)
(same); Nat’l Women, Infants, and Children Grocers Ass’n. v. FDA, 416 F.Supp.2d 92, 108
(D.D.C. 2006) (same).
27
Id. To calculate the appropriate time required, the Board relied in part on a recent very similar
DOL notice-posting rule. See Department of Labor Notification of Employee Rights Under
Federal Labor Law, 75 Fed. Reg. 28,368, 28,394 (May 20, 2010) (to be codified at 29 C.F.R. pt.
471); see 76 Fed. Reg. at 54,007. DOL estimated that 3.5 hours would be required for
compliance with its rule, but that total includes the time necessary to learn about and comply
with contractual requirements that do not apply to the Board’s Rule. 75 Fed. Reg. at 28,394.
The Board reasonably relied on DOL’s estimate as to the amount of time required to comply
with notice-posting, considering that the DOL is responsible for overseeing similar workplace
posting requirements, including OSHA, FLSA, FLMA, and Executive Order 13496.
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33
thereafter. Id. at 54,042-43. Because $64.40 is less than two-tenths of one percent of the
required inflow or outflow of any entity subject to the Board’s jurisdiction, the Board reasonably
concluded it would not impose a significant impact on any small entity. Id. at 54,042.
In its complaint, the Chamber erroneously alleges that the Board underestimated the
economic impact of the Rule by failing to include such speculative and discretionary employer
expenses as costs of educating human resource professionals, management, and employees about
the notice, answering questions regarding the notice, and monitoring the notice to ensure it
remains posted (Compl. at ¶ 56). However, the RFA is only concerned with the costs of
compliance with a regulation, not other expenses that an employer may independently choose to
incur. The seminal case on the issue is Mid-Tex Electric Co-op v. FERC, 773 F.2d 327, 342
(D.C. Cir. 1985), which states: “[I]t is clear that Congress envisioned that the relevant ‘economic
impact’ was the impact of compliance with the proposed rule on regulated small entities.” More
recently, the United States Court of International Trade rejected the argument that it needed to
consider costs other than compliance costs, and cited Mid-Tex Electric Co-op to support its
assertion that Congress intended the RFA to make agencies consider “the impact of compliance
with the proposed rule.”
28
The Board’s conclusion that Congress equated the “economic impact” referred to by the
RFA with compliance costs is supported by the RFA itself and the administrative guidance
offered by the Small Business Administration (“SBA”). For example, the RFA sections that list
the requirements for an initial regulatory flexibility analysis (IRFA) and for a final regulatory
28
M.G. Maher & Co., Inc. v. United States, 26 CIT 1040, 1043, 1044 (Ct. Int’l Trade 2002),
appeal voluntarily dismissed, 61 Fed. Appx. 675 (Fed. Cir. 2003) (Court held that Customs need
not include the cost of claim denials resulting from a rule that imposed a deadline on filing tax
refund claims) (citing Mid–Tex Elec., 773 F.2d at 342 (emphasis added)); accord State of
Colorado v. Resolution Trust Corp., 926 F.2d 931, 948 (10th Cir. 1991).
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34
analysis (FRFA) both define “the impact of the proposed rule on small entities,” solely as
compliance costs, namely “ a description of the projected reporting, recordkeeping and other
compliance requirements” of the rule.
29
Moreover, guidance from the SBA, the agency
responsible for compliance with the RFA, cites only compliance-based costs – that is expenses
incurred that are required by the rule – as examples of the expenses agencies must consider.
30
In sum, the Rule simply obliges employers to obtain a free notice and post it. No
employee education at any level is compelled. Moreover, while employers may choose to
answer questions about the notice, the notice itself provides clearly that those with questions may
contact the Board.
31
Finally, the Board only calls on employers to take “reasonable steps” to
ensure that the notice remains posted, not “every conceivable step.”
32
For all these reasons, the
29
Id. at § 603(a) & (b)(4) (emphasis added) and § 604(b)(5) (incorporating §603(a)). The
Board’s notice-posting rule imposes no “reporting, recordkeeping and other compliance
requirements,” nor does it impose any of the costs contemplated in the SBA guidance other than
the minimal cost described above.
30
SBA Office of Advocacy, A Guide for Government Agencies: How to Comply with the
Regulatory Flexibility Act 34, available at http://archive.sba.gov/advo/laws/rfaguide.pdf (last
visited November 3, 2011).
31
See 76 Fed. Reg. at 54,045. The Chamber speculates, without support, about “adverse impact
on employee relations and interference with normal business operations[.]” Compl. at ¶ 56. To
the extent the Chamber implies that employees with increased knowledge of the NLRA may
assert their Section 7 rights more frequently, such changes flow from the rights in the NLRA
itself, not a notice-posting about the NLRA, and cannot be considered a compliance cost of the
Rule. “Congress, not the Board, created the subject rights and did so after finding that vesting
employees with these rights would reduce industrial strife.” 76 Fed. Reg. at 54,045.
32
Id.; see also Section 104.202(d) at 54,047. The Board explained that the Rule does not require
employers to “constantly monitor the notice.” 76 Fed. Reg. at 54,045. Any monitoring should
occur in the course of normal surveillance to confirm that other workplace notices remain posted;
consequently, any incremental cost due to the Rule should be de minimis.
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35
Board’s factual certification is manifestly reasonable and constitutes a good faith effort to
comply with the requirements of the RFA.
33
CONCLUSION
For all the foregoing reasons, this Court should grant summary judgment in favor of the
Board.
RESPECTFULLY SUBMITTED,
/s/ Lee E. Berlinsky
ERIC G. MOSKOWITZ
LEE E. BERLINSKY, Fed. ID # 5443 Assistant General Counsel
Assistant U.S. Attorney Special Litigation Branch
151 Meeting Street, Suite 200 National Labor Relations Board
Charleston, S.C. 29401 1099 14th Street, N.W.
(843) 266-1679 Washington, D.C. 20570
Phone: (202) 273-2931
Fax: (202) 273-1799
E-mail: [email protected]
ABBY PROPIS SIMMS*
Deputy Assistant General Counsel
Special Litigation Branch
Phone: (202) 273-2934
E-mail: [email protected]
DAWN L. GOLDSTEIN*
Senior Attorney
Special Litigation Branch
Phone: (202) 273-2936
E-mail: [email protected]
* admitted pro hac vice
Dated: November 9, 2011
Washington, DC
33
While the Board considered alternatives to minimize the impact of the Rule (75 Fed. Reg. at
80416; 76 Fed. Reg. at 54043), the Court should disregard the Chamber’s assertion that the
Agency was required to “minimize the Rule’s significant impact on small entities” or to “discuss
any significant alternatives to the proposed rule which would accomplish the stated objectives of
the applicable statutes.” Compl. at ¶ 57. Under the RFA, such actions are unnecessary “if the
head of the agency certifies that the rule will not, if promulgated, have a significant economic
impact on a substantial number of small entities.” 5 U.S.C. § 605(b).
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