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The National Labor Relations Board violated the law when it required U.S. businesses to put notices in their workplaces and on their websites informing employees of their right to unionize, a federal appeals court ruled on Tuesday.



A unanimous three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit struck down the rule, finding that federal law prohibits the labor board from punishing a business for speech, or lack of it, as long as the business does not issue threats.

Freedom of speech "necessarily protects ... the right of employers (and unions) not to speak," Judge Raymond Randolph wrote for the appeals court.

In mandating the notices in 2011, a majority of the labor board appointed by President Barack Obama said that employees cannot fully exercise their rights unless they know what their rights are.

Business trade associations sued within days, arguing that the "11-by-17" posters violated corporate speech rights.

The ruling for the trade associations, including the National Association of Manufacturers, is the second major defeat at the appeals court for the labor board this year.

In January, the court invalidated Obama's appointments to the board during a period of congressional inactivity. The Obama administration has since asked the U.S. Supreme Court to reverse the ruling.