NLRB Reintroduces Some Sanity in Workplace Rule Enforcement

The National Labor Relations Board, a government agency known for wild interpretive swings, has issued a number of pro-management decisions following years of holdings favorable to union members and non-represented employees.

During the past decade or so, the Board expanded employee rights and greatly diminished the ability of employers to take disciplinary action against sometimes outrageous employee behavior because it was considered “protected concerted activity;” a catchall concept protecting employees who act together for their mutual aid and protection.   The wellspring of expanded employee rights stemmed from the Board’s 2004 decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004). In that decision, the Board held (1) that an employer’s facially neutral workplace rule was unlawful if it could reasonably be construed by an employee to prohibit or restrict the employee’s rights under the NLRA. Also, unlawful were (2) any rules promulgated in response to protected activity, or (3) ones that were applied to restrict the exercise of Section 7 rights.

Many who follow this area of the law will recall earlier cases under Lutheran’s expansive interpretation that required employers to reinstate and make whole employees who were fired for extreme profanity and engaging in other behavior bordering on physical assault against supervisors. In addition, employers were forced to change many long-standing policies, including rules requiring respect and civility in the workplace; protecting workplace confidences; limiting employee rights to record conversations and photograph the work environment; prohibiting the use of company equipment and systems, like email, to foster union organizing activities; and limiting the scope of social media postings.

A newly constituted Board recently swept away the first prong of the Lutheran test and replaced it with a balanced approach that evaluates the rights of employers to implement policies, versus the rights of employees to exercise their section 7 protections. More specifically, under the new rule announced in Boeing, 365 NLRB No. 154 (12/14/17), the Board will still look to see if the rule or action, when reasonably interpreted, would potentially interfere with employee rights under the NLRA. If so, the Board will then determine (1) the nature and extent of the potential impact on employee rights protected by the Act; and (2) the legitimate employer justifications associated with the rule or action. If the justification outweighs the impact, the rule is lawful.

For instance, in Boeing an Administrative Law Judge found a no-camera rule could reasonably be construed to chill protected rights. Therefore, under Lutheran, it was unlawful, without regard to any legitimate purpose articulated by the employer.

The Board, in reversing the ALJ under its new test, held that the rule was facially neutral, it was not made in response to protected activity, nor was it applied to restrict such activity. Therefore, it was subject to the balancing test weighing each party’s rights. In applying the new test, it found Boeing’s argument that its policy of prohibiting the use of cameras by employees performing military related work was based on legitimate national security concerns, and had relatively minor impact on employee rights, to be persuasive. Therefore, it was legal.

To assist with future compliance, the Board will place employer rules or actions into one of three categories, and the Board’s General Counsel has issued GC Memo 18-04 (6/6/18), which provides some initial guidance.

The first category covers rules that the Board generally considers legal because when reasonably interpreted they do not prohibit or interfere with the exercise of NLRA rights, or the potential adverse impact on such rights is outweighed by legitimate business justification. The Boeing no-camera rule falls here as do policies encouraging harmonious interactions and relationships, and those prohibiting insubordination, disruptive behavior, defaming company products or services, and disclosing proprietary information such as financial data or other non-public data.

  The second covers rules that require individualized scrutiny to determine whether the rule prohibits or interferes with NLRA rights, and if so, whether any adverse impact is outweighed by legitimate business interests. Examples cited in the GC Memo include, broad conflict of interest rules that do not specifically target fraud and self-enrichment, confidentiality rules that broadly protect employer business or employee information (as opposed to narrower confidentiality rules regarding customer or proprietary information), rules regulating the use of the employer’s name (as opposed to regulating use of the employer’s logo or trademark), and rules generally restricting the right to speak to the media (as opposed to those restricting the right to speak to the media on behalf of the employer).

The third category covers rules that are always illegal because they interfere with employee rights in a way not outweighed by business interests. These include rules that prevent employees from discussing wages, benefits, or terms and conditions of employment, and rules against joining outside organizations or voting on matters concerning the employer. These rules will always be unlawful.

The Memo also makes clear that rules should no longer be found unlawful just because the rule could be interpreted as covering protected activity, and instead should be examined to see if it does in fact cover such activity. Further, ambiguities in a rule may no longer be interpreted against the drafter, and generalized provisions should not be interpreted as banning all activity that could conceivably be included. It is expected that future cases will determine in which category other particular rules or actions fall.

Employers should review their handbook and policies to insure they take advantage of the Board’s newly formulated enforcement policy.