Unintended Consequences of Employee Rights Poster Rule

In the past several years, both the National Labor Relations Board and Department of Labor have required various kinds of employers to hang a “poster” that promotes employees’ right to unionize.

In 2011, the National Labor Relations Board proposed a regulation to require nearly 6 million private-sector employers to display, on company property, a poster informing workers of their right to unionize.

However, in 2013, the U.S. Court of Appeals for the D.C. Circuit ruled in National Association of Manufacturers v. National Labor Relations Board, striking down the NLRB poster rule under the grounds that the rule amounts to compelled speech, which violates employers’ First Amendment rights. Additionally, according to Bloomberg BNA, the D.C. Circuit ruled that “requiring employers to post the statement of NLRA rights would be inconsistent with Section 8(c) of the act, which precludes finding noncoercive employer speech to be an unfair labor practice or evidence of an unfair labor practice.”

Then, a month later, the U.S. Courts of Appeal for the Fourth Circuit invalidated the rule. While the NLRB could have appealed the decisions to the U.S. Supreme Court, it opted against doing so and rule is no longer in effect.

Further, in 2010, the Department of Labor issued a similar poster rule, which also informs workers of their rights under the National Labor Relations Act, that only applies to federal contractors. This poster rule is still in effect. However, on December 18, 2013, NAM filed a lawsuit challenging the DOL rule on the same First Amendment grounds as its successful lawsuit against the NLRB poster rule.

However, in all of this back and forth legal wrangling, and multiple agencies issuing regulations requiring pro-union posters in workplaces, unintended consequences emerged in the form of fraud.

Instead of educating employers and employees of their rights, the posters rules have instigated scams in numerous states.

For instance, Deseret News reported this January:

The Utah Labor Commission has warned of a scam involving requirements for employers to display posters in the workplace.

 

The commission is aware of a solicitation letter sent to employers throughout the state asking them to send a processing fee in order to become compliant with state and federal poster requirements, by offering to sell an “All-In-One” poster to the employer. The commission said it is concerned these notices appear to threaten to penalize employers for not purchasing posters and are thus misleading.

 

Required workplace posters, which must be displayed in a visible location somewhere in the workplace, are available free of charge.

Also this month, the Washington State attorney general issued a similar warning:

Washington Attorney General Bob Ferguson filed a lawsuit on Wednesday against a California company and its principal after they allegedly misled business owners by charging for free government-issued posters.

In addition, the Oregon secretary of state warns of the employment poster scam on her website. Other states where employer poster scams have taken place are Montana and South Dakota.

Unfortunately, instead of educating employees of their rights, the poster rules created uncertainty, which provided opportunists the ability to scam employers that are simply trying to comply with new regulation.