National Association of Manufacturers v. Perez

103 F. Supp. 3d 7, 203 L.R.R.M. (BNA) 3135, 2015 U.S. Dist. LEXIS 60467, 99 Empl. Prac. Dec. (CCH) 45,318, 2015 WL 2148230
CourtDistrict Court, District of Columbia
DecidedMay 7, 2015
DocketCivil Action No. 2013-1998
StatusPublished
Cited by7 cases

This text of 103 F. Supp. 3d 7 (National Association of Manufacturers v. Perez) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Association of Manufacturers v. Perez, 103 F. Supp. 3d 7, 203 L.R.R.M. (BNA) 3135, 2015 U.S. Dist. LEXIS 60467, 99 Empl. Prac. Dec. (CCH) 45,318, 2015 WL 2148230 (D.D.C. 2015).

Opinion

MEMORANDUM OPINION

Amit P. Mehta, United States District Judge

I. INTRODUCTION

On May 20, 2010, the U.S. Department of Labor promulgated a new federal regulation entitled “Notification of Employee Rights under Federal Labor Laws,” which this opinion shall refer to as the “Posting Rule.” The Department of Labor developed the Posting Rule in response to an Executive Order issued by the President under the Procurement Act. The Posting Rule requires as a condition of nearly all federal contracts that contractors post workplace notices informing their employees of their rights under the National Labor Relations Act. Contractors subject to the Posting Rule must display such notices in the same manner that they do other notices — physically, electronically, or both. The failure to post can result in cancellation, termination or suspension of the present contract (or part of the contract), or debarment from' government contracting.

This case presents constitutional and statutory challenges to the Posting Rule. Plaintiffs National Association of Manufacturers and Virginia Manufacturers Association are trade groups that represent government contractors. They filed suit urging the Court to enjoin the Posting Rule, contending that (1) the rule compels speech in violation of the First Amendment; (2) the President and the Depart *11 ment of Labor lacked the authority to promulgate the rule under the Procurement Act; (3) the rule is an arbitrary and capricious construction of the Procurement Act; and (4) the rule is preempted by the National Labor Relations Act.

The court concludes that these challenges to the Posting Rule are without merit. The court, therefore, denies Plaintiffs’ Motion for Summary Judgment and grants Defendants’ Motion for Summary Judgment.

II. BACKGROUND

A. Creation and Content of the Posting Rule

1. Executive Order lSi.96

The Posting Rule has its origin in Executive Order (E.O.) 13496, signed by President Obama on January 30, 2009. Exec. Order No. 13496, 74 Fed.Reg. 6107 (Jan. 30, 2009). Invoking his authority under “the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq.,” also known as the Procurement Act, the President instituted a requirement that every government contract, unless exempted, include provisions mandating that federal contractors and subcontractors post a. notice “des-crib[ing] the rights of employees under Federal labor laws.” Id. at 6107-08. The President’s stated goal for E.O. 13496 was “to promote economy and efficiency in Government procurement.” Id. at 6107. The Executive Order explained that “[w]hen the Federal Government contracts for goods or services, it has a proprietary interest in ensuring that those contracts will be performed by contractors whose work will not be interrupted by labor unrest.” Id. The President concluded:

The attainment of industrial peace is most easily achieved and workers’ productivity is enhanced when workers are well informed of their rights under Federal labor laws, including the National Labor Relations Act.... Relying on contractors whose employees are informed of such rights under federal labor laws facilities the efficient and economical completion of the Federal Government’s contracts.

Id.

2. The Posting Rule

President Obama tasked the Secretary of Labor with implementing E.O. 13496 and drafting the required notice. Id. The Secretary delegated this task to the Office of Labor-Management Standards within the Department of Labor, which developed the Posting Rule through an informal notice-and-comment rulemaking process. See generally “Notification of Employee Rights Under Federal Labor Laws,” 75 Fed.Reg. 28,368 (May 10, 2010), EOF No. 16-2. A final version of the Posting Rule was issued on May 10, 201Q. Id.; see also 29 C.F.R. § 471.

The Posting Rule requires federal government contractors and subcontractors to post a notice “in conspicuous places in and about [their] plants and offices where employees covered by the National Labor Relations Act engage in activities relating to the performance of the contract, including all places where notices to employees are customarily posted both physically and electronically.” 29 C.F.R. § 471, Subpt. A, App. A. The workplace notice, entitled “Employee Rights Under the National Labor Relations Act” (“the Notice”), consists of three sections, which generally describe (1) collective bargaining rights of employees under the NLRA; (2) anti-union actions that are illegal for employers to perform; and (3) coercive actions that are illegal for unions to use. Id. Text at the bottom of the Notice encourages employees who believe their rights have been violated to contact the National Labor Re *12 lations Board. Id. The lower left-hand side of the Notice states: “This is an official Government Notice and must not be defaced by anyone.” Id. The lower right-hand side of the Notice features the words “U.S. Department of Labor” and bears the agency’s seal. Id.; see also Office of Labor-Mgmt. StandaRds, Exec. Order 13Jp96: Notification ofEmp. Rights Under Fed. Labor Laws, U.S. Dep’t of Labor, http://www.dol.gov/olms/regs/compliance/ E013496.htm (last visited May 7, 2015) (providing copies of the Notice in multiple languages) [hereinafter Notice Posting Example ]. A copy of the Notice is appended to this opinion as Exhibit A.

The Notice does not include every recognized labor right. For instance, as Plaintiffs complain, the Notice does not mention an employee’s right to object to payment of dues in excess of the amounts required for representational purposes (a right recognized by the Supreme Court in Commc’ns Workers of Am. v. Beck, 487 U.S. 735, 108 S.Ct. 2641, 101 L.Ed.2d 634 (1988)); an employee’s right to decertify a union; or an employee’s right to refuse to pay dues to a union in a right-to-work state. Pis.’ Mem. of the Nat’l Ass’n of Mfrs. and Va. Mfrs. Ass’n in Supp. of their Mot. for Summ. J., ECF No. 16-Í at 3 [hereinafter Pis.’ Mem.]. During the rule-making process, the Department of Labor received comments that the Notice was underinelusive in its description of employee rights, particularly “rights associated with an anti-union position.” See 75 Fed. Reg. at 28,372. The Department of Labor rejected revising the Notice to acknowledge such rights, “because of space limitations and because of the policy choice, as expressed in Executive Order 13496, to revoke a more explicit notice to employees of Beck rights.” Id. at 28,379.

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103 F. Supp. 3d 7, 203 L.R.R.M. (BNA) 3135, 2015 U.S. Dist. LEXIS 60467, 99 Empl. Prac. Dec. (CCH) 45,318, 2015 WL 2148230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-association-of-manufacturers-v-perez-dcd-2015.