A Washington, D.C., federal appeals court on Tuesday struck down a rule that would have required commercial businesses to inform employees of their right to form a union. The circuit court's ruling is a victory for business lobby groups fighting the federal National Labor Relations Board.

Private companies sued to block the NLRB's 2011 rule that employers must post information about union organizing, as well as bargaining and protest rights, claiming that it would constitute so-called compelled speech, because the literature, which is printed on posters, wouldn't include opposing information, such as how to decertify a union or avoid paying dues. Their arguments largely hinged on protecting what is referred to as "no speech under free speech."

Unions said the posters were needed to address widespread misunderstandings about labor law and many workers' fear of exercising their rights under it. However, the business lobby, spearheaded by the National Association of Manufacturers, or NAM, maintained that such posters are meant to boost unions' falling membership. NAM's lawyers argued that the NLRB overstepped its statutory authority and ignored congressional intent by issuing the rule.

The NLRB says this decision changes nothing, because the proposed rule never went into effect.

"The board is currently reviewing the court's decision on the employee rights notice rule and will make a decision on further proceedings at the appropriate time," an NLRB spokesperson said. "The rule is also currently under review by the Fourth Circuit."

NAM President Jay Timmons said the NLRB has no authority to enforce notice posting and that the ruling marks a significant moment for manufacturers.

"The poster rule is a prime example of a government agency that seeks to fundamentally change the way employers and employees communicate," Timmons said. "The ultimate result of the NLRB's intrusion would be to create hostile work environments where none exist."

Now the opposing sides await a decision in a related case that is pending in a South Carolina federal court.

Visit the NLRB's website to view a PDF of the Employee Rights Notice poster in question: nlrb.gov/poster