An unequal fight

Since it took office, the Obama administration has launched union and employee-friendly initiatives, including several failed attempts to pass the Employee Free Choice Act, which strongly favors unions. Consistent with these efforts, the National Labor Relations Board (NLRB) has promulgated a new rule that requires private employers to inform employees of their right to form and support a union.

The highly controversial new rule was scheduled to go into effect Nov. 14, 2011. However, on Oct. 5, 2011, the NLRB postponed the rule's effective date in response to confusion about which businesses fall under the NLRB's jurisdiction and to allow for enhanced education and outreach to employers, particularly those who operate small and medium-sized businesses. On Dec. 23, 2011, NLRB once again postponed the effective date of the notice posting rule, this time until April 30, pending resolution of legal challenges that have been filed.

Failure to post the required notice constitutes an unfair labor practice and can hinder your ability to defend against other unfair labor practice charges. As a result, act now to ensure timely compliance with the new posting rule.

The rule

Under the new rule, employers subject to the National Labor Relations Act (NLRA), which covers virtually every private employer, are required to post an 11- by 17-inch notice to employees describing their rights under the NLRA. The detailed notice explains employees' rights under the NLRA 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."

The notice also provides a comprehensive list of employer and union conduct prohibited by the NLRA. Additionally, the notice warns that "if you believe your rights or the rights of others have been violated, you should contact the NLRB promptly to protect your rights … ." It also promises "the NLRB may order an employer to rehire a worker fired in violation of the law and to pay lost wages and benefits and may order an employer or union to cease violating the law."

In addition to physically posting the notice, employers who regularly communicate notices to employees through the Internet or an intranet also must publish the notice to employees through those means. Employers who have 20 percent or more workers not proficient in English also must publish the notice in all other languages spoken or in the language spoken by a majority of their employees and provide copies to the remaining employees in their respective languages. Fortunately, the requisite notice can be downloaded from NLRB's website, www.nlrb.gov.

The notice and extensive posting requirements essentially encourage and empower employees to take action in defense of their right to form and support a union and generally fail to adequately publicize employees' rights to refrain from engaging in such activities.

Failing to post

The new rule is unprecedented in that it significantly expands the NLRB's role from that of an agency that adjudicates unlawful conduct to one that monitors employers—even when there is no unlawful conduct to remedy. Moreover, the new rule implements as standard practice the posting of notices informing employees of their rights under the NLRA, a practice typically used as a sanction to remedy unfair labor practices charges.

Nevertheless, perhaps the new rule's most controversial aspect is what happens to employers who fail to comply with its mandates. The new rule threatens three forms of reprisal for employers who do not comply with its posting requirements.

First, the new rule makes it an independent, actionable unfair labor practice for an employer to fail to comply with its posting requirements. The new unfair labor practice falls under Section 8(a)(1) of the NLRA, which makes it unlawful for an employer to "interfere with, restrain or coerce employees" in the exercise of their rights under the NLRA. The NLRB will subject an employer who fails to make the requisite postings under the new rule to the same sanctions generally available in unfair labor practice charge proceedings, which includes seeking a cease and desist order as well as unspecified "additional remedies."

Second, the new rule authorizes the NLRB to make an untimely unfair labor practice charge timely if an employer has failed to post the requisite notice. The NLRA's Section 10(b) generally precludes issuance of an unfair labor practice complaint based on conduct occurring more than six months before the filing and service of an administrative charge with the agency. The new rule allows the NLRB to prosecute such untimely charges as an additional sanction to employers who fail to comply with the posting requirements.

Third, the new rule encourages the NLRB to consider an employer's knowledge of and willful refusal to comply with the posting requirement to be evidence of unlawful anti-union animus in adjudicating unfair labor practice charges. Certain unfair labor practices require the charging party to establish the employer's unlawful animus or anti-union motive.

For example, an employee who files an unfair labor practice charge alleging he or she was terminated because of union activity would have to establish the employer's unlawful motive (such as conduct by the employer demonstrating union animus). Under the new rule, an employer who fails to comply with the posting requirements and is subject to an unfair labor practice charge may be found to have violated the NLRA even in the absence of evidence showing union animus. In other words, to the NLRB, merely failing to post the notice is evidence of an unlawful motive even when there is no other evidence of animus.

These three sanctions have the potential to significantly affect employers in their workplaces and in NLRB proceedings. Moreover, the severity of these sanctions adds teeth to the new rule, making it clear the NLRB wants employees to be informed of their rights to join and support unions and will undoubtedly sanction employers harshly for failing to comply with posting requirements.

Outreach

As mentioned, the rule's effective date was postponed to April 30. On its website, the NLRB explained the delay was intended "to allow for enhanced education and outreach to employers, particularly those who operate small and medium-sized businesses."

The NLRB's Office of Public Affairs confirmed "the decision to extend the rollout period followed queries from businesses and trade organizations indicating uncertainty about which businesses fall under the Board's jurisdiction, and was made in the interest of ensuring broad voluntary compliance."

It remains to be seen whether the extension will be sufficient to educate the countless employers still grappling with understanding the rule's implications. It seems more likely the delay was in response to the potential of an injunction to stop the rule's implementation.

Courtroom challenges

Even before its effective date, the new rule already has been met with legal challenges.

On Sept. 8, 2011, the National Association of Manufacturers and Coalition for a Democratic Workplace sued the NLRB in the U.S. District Court for the District of Columbia. On Sept. 16, 2011, in the same district, the National Right to Work Legal Defense and Education Foundation and the National Federation of Independent Businesses also sued the NLRB. And on Sept. 19, 2011, the U.S. Chamber of Commerce and South Carolina Chamber of Commerce sued the NLRB in the U.S. District Court for the District of South Carolina.

All three lawsuits seek injunctions to prevent the NLRB from enforcing the new rule. The lawsuits essentially argue that though the NLRA authorizes the NLRB to issue regulations "as may be necessary," it does not permit the board to require notice postings by employers not involved in representation cases or unfair labor practice charge proceedings. The lawsuits also assert requiring notice postings would violate employers' First Amendment rights.

Additionally, the lawsuits contend the board acted arbitrarily and capriciously in excluding from the notice NLRA language permitting the enforcement of states' right-to-work laws.

Because of the rule's delay, the courts may have the opportunity to rule on the aforementioned injunction requests before April 30.

Congressional response

The rule also is the subject of much controversy at congressional hearings and debates. Indeed, the Oct. 5, 2011, website notice extending the new rule's effective date was posted only one hour before Rep. John Kline (R-Minn.), chairman of the House Education and Workforce Committee, announced the introduction of H.R. 3094, Workforce Democracy and Fairness Act.

H.R. 3094 substantially would change NLRA provisions addressing how to resolve questions concerning union representation of employees. The House bill also would modify the board's procedures and standards for determining the appropriateness of a bargaining unit.

Additionally, the bill would affect NLRB procedures in representation cases, including streamlining the processing of election cases, reducing the time between filing an election petition and a ballot election, and otherwise limiting the board's broad discretion. The new bill also provides that before an election, employers only would be required to provide the names of employees along with the employees' choice of a telephone number, e-mail or mailing address.

Notably, following Kline's announcement, the House Small Business Committee conducted a hearing in which Republicans and Democrats again were divided over their views. Indeed, many congressional committees followed suit, holding various hearings in connection with the new bill.

Complying with the rule

Despite efforts to stop the rule, it has been promulgated. You must post the new notice by April 30 and distribute it in the necessary languages through any electronic means regularly used for communicating government notices to employees.

Because the new notice likely will result in increased union organizing activity, ensure your nonsolicitation, nondistribution and other union-related policies are current and NLRA-compliant. Also, ensure your company's general employment policies are current and lawful.

Further, invest time in retraining human resources and management-level employees to make sure they are familiar with the NLRA, other key employment laws and your various employment policies. This retraining is invaluable in helping human resources and management-level employees tackle difficult questions from what will almost certainly be a more challenging work force.

Regardless of whether you already have developed and/or communicated your stance on union representation to employees, this is a good time to revisit your position and solidify your strategy for dealing with organizing drives, concerted employee activity and other issues that might crop up more frequently as a result of the new rule.

Communicate with employees often to reinforce employees' equal right to oppose unionization. Also, continue to identify, reduce and eliminate the root causes of employee dissatisfaction that increase the likelihood of a successful union organizing drive.

The NLRB's new rule makes one thing clear: Employees will be more informed about their rights under the NLRA. As a result, you must stay informed of relevant developments, comply with the new rule and prepare your workplace for increased union activity.

Jason C. Kim is a partner and Gray I. Mateo-Harris is an associate in the labor and employment practice group of Chicago-based law firm Neal, Gerber & Eisenberg LLP.