A U.S. labor board rule requiring companies to install workplace posters on union rights was thrown out by an appeals court that said the regulation violates employers' rights to free speech, Bloomberg reported.


A three-judge panel of the U.S. Court of Appeals in Washington, D.C., today said the National Labor Relations Board's demand that employers provide information about union organizing, bargaining and protests was so-called compelled speech because it didn't include opposing information such as how to decertify a union or avoid paying dues.


The rule treats failure to post the required notice "as evidence of anti-union animus in cases involving, for example, unlawfully motivated firings or refusals to hire -- in other words, because it treats such a failure as evidence of an unfair labor practice," U.S. Circuit Judge A. Raymond Randolph said in the opinion.


The regulation was challenged by the National Association of Manufacturers (NAM), the National Right to Work Legal Defense and Education Foundation and other business lobby groups, who claimed enactment of the rule would affect more than 6 million employers who otherwise wouldn't be subject to NLRB regulation.


"Today, manufacturers claim an important victory in the fight against an activist NLRB and its aggressive agenda,"  NAM President and CEO Jay Timmons said in a prepared statement. "The poster rule is a prime example of a government agency that seeks to fundamentally change the way employers and employees communicate. The ultimate result of the NLRB's intrusion would be to create hostile work environments where none exist."


The rule had been on hold while the appeals court considered its legality.