Behind the NLRB posting rule
A rule that would have forced most U.S. employers to post a notice of employees’ rights under the National Labor Relations Act (NLRA) has been temporarily blocked by a federal circuit court.
The U.S. Circuit Court of Appeals for the District of Columbia on April 17 granted an emergency injunction pending the appeal of a prior D.C. district court ruling that the National Labor Relations Board (NLRB) had authority to issue the poster requirement, but had no ability to punish an employer for failure to comply.
Oral argument before the appeals court is slated for September 2012.
In a separate April 13 decision in another legal challenge to the rule, a U.S. district court in South Carolina ruled that the NLRB lacked the authority to issue a notice-posting rule.
The cases stem from the NLRB’s Dec. 22, 2010, notice of proposed rulemaking requiring employers subject to the NLRA to display posters in their workplaces informing employees of their Section 7 rights under the act. The board estimated that nearly 6 million small businesses would be affected but determined that the compliance costs would be minimal. The poster text is available for free on the NLRB’s web site.
On Aug. 30, 2011, following analysis of 7,000 public comments, the board issued a final rule, which was originally set to take effect Nov. 14, 2011. It later postponed the effective date to Jan. 31, 2012, and again to April 30, 2012.
The poster notifies employees of their Section 7 rights to form, join or assist a union; to negotiate with an employer through a union; to bargain collectively through representatives of employees’ choosing; to discuss wages, benefits and other terms and conditions of employment with co-workers or a union; to take action to improve working conditions; to strike and picket; and to choose not to do any of these activities, including joining and remaining a member of a unit.
The proposed rule provided that an employer’s failure to post the notice might be found to interfere with employees in the exercise of their National Labor Relations Act rights.
The district court in South Carolina court agreed with the plaintiff, the U.S. Chamber of Commerce, that the final rule violates the Administrative Procedure Act because the board lacks the authority to issue the rule under Section 6 of the act or the gap left by the absence of a notice-posting provision in the act.
“Interpretation of Section 6 is terra incognita,” the South Carolina district court noted. “Courts have rarely explored the parameters of Section 6, the reason being that the board has rarely exercised its rulemaking authority.”
Congress authorized the board to regulate employers’ conduct in preventing and resolving unfair labor practice charges and conducting representation elections, the court noted. “It is clear from the structure of the act that Congress intended the board’s authority over employers to be triggered by an outside party’s filing of a representation petition or unfair labor practice charge,” it stated. “The notice-posting rule proactively dictates employer conduct prior to the filing of any petition or charge, and such a rule is inconsistent with the board’s reactive role under the act.”
The court noted that Congress often has inserted notice requirements in labor laws since 1934, but the National Labor Relations Act was silent about notice.
NLRB Chairman Mark Gaston Pearce said of the recent decisions; “We continue to believe that requiring employers to post this notice is well within the Board’s authority, and that it provides a genuine service to employees who may not otherwise know their rights under our law.”
But Randel Johnson, senior vice president with the U.S. Chamber of Commerce, called the proposed poster “lopsided” because it “did not include balanced information such as employees’ rights to decertify unwanted unions, or to refuse to pay union dues used for political purposes, nor did the posting provide information about employees’ rights in ‘right to work’ states—like South Carolina.”
David Barron in the Houston office of Cozen O’Connor said that “although most of the ‘rights’ listed in the poster are well established, there are some that are controversial. For example, the poster states that it is against the law for an employer to prohibit employees from wearing union hats, buttons, t-shirts and pins in the workplace ‘except under special circumstances.’ This is a hotly contested area of the law as employers often argue that such items violate company dress codes, create safety or sanitation concerns (e.g., for food handlers), or otherwise should be limited in the workplace. The poster could encourage more conflict in this area as employees may incorrectly interpret the poster as allowing them to wear pro-union paraphernalia in the workplace without limitation.”
Jonathan Segal, an attorney with Duane Morris in Philadelphia, noted that the District of Columbia district court decided that the board did not exceed its statutory authority in requiring the posting of a union rights notice, so the district courts are in conflict. He said the issue eventually might go to the Supreme Court.
Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).
Allen Smith, J.D., is manager, workplace law content, for SHRM.
The Golden Hammer strikes again
As the National Hardware Show kicks off in Las Vegas, the Golden Hammer Awards program enters its 28th year.
Wednesday morning at the show, the Home Channel News Golden Hammer event will honor the best of the best among home improvement suppliers and recognize outstanding achievement in the retail field. A twist for 2012: A Golden Hammer panel discussion with the working title: “The recovery: Is it real? And what to do about it?”
This year, the voices will include Bob Taylor, CEO of Fort Wayne, Ind.-based Do it Best Corp. Taylor will be inducted into the Home Channel Hall of Fame for a career that spans front-line hardware store retailing and national retail distribution. M. Marcus Moran Jr., CEO of Westminster, Mass.-based Aubuchon Hardware, will accept the Retailer of the Year award on behalf of the 121-store independent chain. And Brad McDaniel of McDaniel’s Do-It-Center in Snohomish, Wash., will accept the Tools of the Trade Award.
On the vendor side of the hammer, Home Channel News collected votes from industry peers to produce product winners in four categories. The ballots were distributed electronically earlier this year.
The breakfast event, sponsored in part by Safety Works, will take place May 2 in room #N111/N113 at the Las Vegas Convention Center. Doors open at 7:30 a.m.
“The Golden Hammer event is now in its 28th year, and we’re proud of the way the event has evolved into celebration of the best of the best on the vendor side, plus a forum with some of the most interesting voices in retail,” said Home Channel News editor Ken Clark.
Sears to spin off Hometown and Outlet stores
Sears Holdings Corp. filed documents with the Securities and Exchange Commission (SEC) on April 30 indicating its plans to spin off its Hometown and Outlet stores into a separate company, according to an article in the Chicago Tribune.
The retailer hopes to raise between $400 million and $500 million in liquidity through the new entity, called Sears Hometown and Outlet Stores. Current shareholders will get the right to buy one share in the new company for each share of Sears common stock they own. The stock would be traded on the Nasdaq exchange under the ticker SHOS.
Sears chairman Edward Lampert, who owns approximately 62% of Sears Holdings, parent company of Sears and Kmart stores, would also own a similar majority in the new company, according to the filing.
Sears announced its intention to spin off the store in late February. The public offering would involve more than 1,100 hometown and 122 outlet stores. In its filing, the company said it plans to close six Hometown stores and nine hardware stores in the first half of the year.
Hometown stores are small hardware stores operated in a franchise-type arrangement. Outlet stores sells appliances and other Sears merchandise in a discount warehouse setting.
In its latest filing, Sears reported a fourth-quarter loss of $2.4 billion, compared with net income of $374 million a year earlier. Sales dropped fell 4% to $12.5 billion.