Discuss the decision and the rationale.

Case 6.2 A Case in Point: Summary National Association of Manufacturers v. Perez

U.S. District Court for the District of Columbia 103 F. Supp. 3d 7 (D.D.C. 2015).

Facts In 2009, President Obama signed an executive order that required government contracts to include a provision mandating that federal contractors and subcontractors post a notice describing the rights of their employees under federal labor law, including their collective bargaining rights and their right to be free of both illegal antiunion activity by employers and illegal coercive activity by unions. Contractors that do not post the rule in the required manner risk having their government contracts cancelled, in addition to other sanctions. The National Association of Manufacturers (NAM), an entity representing small and large employers, filed suit alleging that the Posting Rule and the corresponding notice was unlawful and requesting that it be preliminarily and permanently enjoined.

Issues Presented Did the Posting Rule and the required notice violate the First Amendment? Did the president have authority to require the posting? Did the notice violate the APA? Did the National Labor Relations Act (NLRA) preempt the rule?

Summary of Opinion The U.S. District Court for the District of Columbia rejected NAMs assertion that the rule required them to adopt the notice as their own speech with which they disagree in violation of the First Amendment. The court distinguished National Association of Manufacturers v. NLRB, in which the U.S. Court of Appeals for the District of Columbia invalidated a similar NLRB posting rule whereby all employers that did not comply with the rule were deemed to have committed an unfair labor practice in violation of section 8(c) of the NLRA. In that case, the appeals court reasoned, like the right not to be compelled to communicate government speech under the First Amendment, section 8(c) encompassed the right not to disseminate the NLRB posting. As the U.S. Court of Appeals has pointed out, an employers right to silence is sharply constrained in the labor context, and leaves it subject to a variety of burdens to post notices of rights and risks. Unlike the rule at issue in National Association of Manufacturers v. NLRB, the Posting Rule at issue in this case did not require a contractor to speak at all as long as the contractor opted out of federal contracting. Additionally, nothing stopped the contractor from conveying its own message by creating its own posting and placing it next to the required notice, or by clarifying that the notice was not its own speech.

The court further reasoned that requiring an employer to post government speech about labor rights was simply not the same as forcing a student to pledge allegiance. To suggest otherwise trivializes the freedom protected in other rulings. In sum, the Posting Rule did not violate the First Amendment.

The court ruled that the president did have the authority to promulgate the Posting Rule under the Procurement Act, relying on an earlier case upholding an executive order issued by President George W. Bush requiring contractors to post notices informing employees of the federal law protecting them from being forced to join a union. The court explained that the presidents authority under the Procurement Act is to promote economy and efficiency in Government procurement. Although the link between a notice of labor rights and an efficient procurement policy may seem attenuated, there need only be a sufficiently close nexus to the values of providing the government with an economical and efficient system for procurement and supply. The order here, like the one upheld in the earlier case, met that requirement.

The court also held that the rule was not arbitrary and capricious under the APA, even though there were no studies or analysis to show that the rule would improve procurement efficiency. Although the notice may indeed have an attenuated link to procurement policy as Plaintiffs contend, President Bushs executive order passed muster under the sufficiently close nexus standard, albeit under the Procurement Act and not the APA. Accordingly, so too must this court sustain the Posting Rule under the APA.

Finally, the court dismissed the plaintiffs various preemption arguments. The court concluded that the rule was not preempted by sections 8(c) or 7 of the NLRA. Its sole purpose was to provide information, not to be the kind of self-help economic weapon Congress contemplated that parties would use in a labor dispute.

Result The Posting Rule was a valid exercise of the presidents authority under the Procurement Act. It did not violate the First Amendment or the APA, and it was not preempted by the NLRA.

Discuss the decision and the rationale.