Handbook Wars – Common Sense Returns NLRB Overhauls Standard for Legality of Work Rules

We have noted many times over the years how the NLRB’s zeal to review employer policies, or more correctly, fragments of employer policies, for lawfulness has led to nettlesome issues that rarely, if ever, involve actual employees.  The results have been absurd and have raised an entire cottage industry of attacks on language by unions and vetting of employer policies for lawfulness.

This may be ending.  As we noted yesterday, the NLRB issued a significant decision that will have far-reaching implications for both unionized and non-unionized workplaces.  In Boeing Company, 365 NLRB No. 154 (2017), the Board established a new standard for evaluating whether facially lawful workplace rules, policies or employee handbook provisions unlawfully interfere with employees’ exercise of Section 7 rights.  In so doing, the Board placed in doubt the applicability of scores of decisions issued in the 13-years since Lutheran Heritage, 343 NLRB 646 (2004), was decided.  We previously identified this issue as a case that the NLRB would revisit once a new majority was installed.

“Reasonably Construe” Standard

For the last 14 years the Board evaluated whether an employee would “reasonably construe” the language of a work rule to prohibit the exercise of NLRA rights.  If it did, then the rule—regardless of whether it actually restricted Section 7 activity—was found unlawful.  Applying this standard, an inconsistent line of cases developed.  Take, for instance, a sampling or recent decisions concerning “civility in the workplace.”  A rule prohibiting “abusive or threatening language to anyone on Company premises” was lawful, while a rule restricting “loud, abusive or foul language” was not.  And, as noted, a policy or fragment of a policy could be found unlawful even if there was no evidence that employees read the policy or were even aware of its existence.  It was, in terms of the NLRA, a victimless crime.

Policy Considerations Behind Abandoning The Lutheran Village Standard

The new three member Board majority (Miscimarra, Kaplan and Emmanuel) decided to change this standard because employers were often held to an impossible standard of precision in drafting language in which they would need to foresee any potential impact on any Section 7 right, regardless of how remote.  An employer would have to foresee the future, which the majority characterized as requiring “perfection that literally is the enemy of the good.”  The Lutheran Heritage standard has been criticized as unworkable by many in the employer community, and by various Board members over the years.  So it is not surprising that that a new standard was on the agenda.

New Balancing Test

The Board abandoned the singularly-focused and vague “reasonably construe” standard, in favor of a new balancing test, which would consider the impact of the rule on NLRA rights and an employer’s business justification for the rule.  Going forward,  in order to provide greater clarity and certainty to all parties, the Board indicated it would categorize the results of future decisions in three ways:

  • Category 1: Lawful rules because (i) when “reasonably interpreted,” the rule does not prohibit or interfere with the exercise of NLRA rights or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.  Examples of these types of rules include the no-camera requirement in the Boeing case, where the employer supported its rule with multiple business and security justifications.  The Board also found that a rule requiring employees to have “harmonious interactions and relationships” in the workplace, and other rules requiring employees to abide by basic standards of civility would be categorically lawful.
  • Category 2: Rules warranting individual scrutiny on a case-by-case basis.
  • Category 3: Unlawful rules because they would prohibit or limit NLRA-protected conduct, and the adverse impact is not outweighed by legitimate business justifications (e.g., a rule prohibiting discussion of wages or benefits with another).

The Board proceeded to use this new framework to find that Boeing’s policy restricting the use of camera-enable devices was justified in light of the employer’s security concerns.  As it does in every case in which it overrules precedent and/or sets a new standard, the Board weighed whether to apply this new test retroactively, and decided to apply the standard to all pending cases in whatever stage.

Impact of this Decision

It will be some time before the full impact of the decision will be felt as rules are evaluated under the new standard.  However, the fact Lutheran Heritage was overruled likely will inhibit unions from attacking employer policies as the forum for these sorts of claims is less receptive.

Because the Board will evaluate the purpose for the rule, employers should consider clearly articulating the reasons for a rule in the policy.

Also, employers may feel less constrained by the thicket created by the previous standard; however, the true impact of Boeing likely will be felt once the host of pending cases work their way through ALJs and the Board under this new paradigm.  Only then will employers understand how the Board’s new categories will work.  We will keep you posted…there is sure to be more to follow.

© 2017 Proskauer Rose LLP.
This post was contributed by Mark Theodore and Joshua S Fox of Proskauer Rose LLP.
For more on the NLRB go to the National Law Review’s Labor and Employment Practice group page.

Right-to-Work Battle in Illinois Enters Cease Fire – For Now

Illinois is completely surrounded by right-to-work states that have laws making it unlawful for companies to require union dues as a condition of employment. Notwithstanding the recent trend of states enacting such laws, the Illinois legislature tried its best this year to block right-to-work legislation within its borders.

Earlier this year, the Illinois legislature passed a law that would prohibit local governments from enacting their own right-to-work laws after one Illinois municipality attempted to enact a right-to-work ordinance in 2015. Illinois Gov. Bruce Rauner vetoed the legislation – based on his belief that right-to-work laws promote business growth – and this week the legislature fell one vote short of overriding his veto. There are signals legislators may attempt to revive the legislation next year. Thus, this remains an issue for Illinois employers to watch.

This issue is not unique to Illinois; local governments in Kentucky enjoyed some success with their own right-to-work ordinances several years ago before the state enacted its own right-to-work law.

Right-to-work laws are permitted under Section 14(b) of the Taft-Hartley Act and make it unlawful for companies to require union dues as a condition of employment. In states where right-to-work laws are not enacted, most unionized employers have clauses in their labor agreements that require dues payments as a condition of employment – the clauses generally are known as “union seniority clauses.” At present, 28 states have right-to-work laws on the books. The National Right to Work Foundation maintains a current list.

This post was written by David J. Pryzbylski of BARNES & THORNBURG LLP., © 2017
For more Labor & Employment legal analysis, go to The National Law Review

2015 Union Membership Rate Relatively Stable Despite New NLRB Election Rules

national labor relations boardDespite the National Labor Relations Board’s “quickie election rules,” the percentage of unionized workers in the private sector remained stable during 2015, according to the Bureau of Labor Statistics of the U.S. Department of Labor: 6.7% of private-sector workers were in unions in 2015, up from 6.6% in 2014. Not surprisingly, public-sector workers had a much higher union membership rate: 35.2%.

According to the report, men had a higher union membership rate than women: 11.5% versus 10.6%. In addition, the percentage of African-American workers who were union members was greater than Caucasian workers.

New York (24.6%), Alaska (22.8%), and Hawaii (21.8%) had the highest unionization rates, whereas South Carolina (2.2%), Mississippi (3.7%), and Utah (3.7%) had the lowest.

The report found the median weekly earnings of nonunion workers were lower than the median weekly earnings for unionized workers ($776 per week versus $980 per week). The report, however, recognizes that this comparison may not be valid because the “comparisons of earnings in [the] release are on a broad level and do not control for many factors that can be important in explaining earnings differences.” Indeed, this is likely the case.

Jackson Lewis P.C. © 2016

Be Careful What You Say During a Union Organizing Campaign

national labor relations boardAt the same time that the current National Labor Relations Board is giving employees what seems like the unfettered ability to engage in disparagement, profane outbursts, and racist comments that accompany protected union or other concerted activity, employers are having to become ever more careful about what they say. Even truthful and seemingly innocuous statements made during an organizing campaign can be viewed, in hindsight, as having an unlawful “chilling effect” that discourages employees from exercising their rights to support a union. A recent decision from a federal appeals court in Chicago provides a cautionary tale for employers who find out about organizing activity and want to keep their workplace union-free.

On September 4, the United States Court of Appeals for the Seventh Circuit (covering Illinois, Indiana and Wisconsin) upheld the Board’s determination that an Illinois auto dealership illegally discouraged workers from supporting a union and illegally terminated a worker after learning he failed to disclose the suspensions of driver’s license following a DUI charge. The court noted that the employer learned union activity was “afoot” after receiving an anonymous voicemail from a woman who called “on behalf of the spouse of one of your employees.” The anonymous caller said that a particular employee was trying to “stir up” the unionization effort and stated that he did not have a valid license, which the dealership required, because of his DUI. After receiving this voicemail, the employer interviewed the employee, who admitted his license was invalid, and then suspended and later terminated him.

Meanwhile, the dealership’s general manager and other top managers met with workers to discuss the union organizing effort. One of the employees present secretly recorded the meeting. During the meeting, the managers said that any bargaining with the union would “start from scratch,” warned (truthfully) that its Orlando dealership had not had any bargaining negotiations even though its workers elected a union nearly three years ago, advised that pay raises were “absolutely possible” in the event employees rejected the union as it considered pay adjustments every year, responded that they “don’t know” if some employees would be demoted under union rules, and suggested that support for the union could “follow” them when they seek other employment because other employers might be hesitant to hire them.

The Board determined that the managers’ statements all had a “tendency” to discourage employees from organizing, and were therefore illegal under federal labor law. The managers’ statements were unlawful in four respects: (1) they “threatened” that it would be “futile” for workers to organize by suggesting that bargaining would start from scratch and bringing up the Orlando dealership as an example of potential negative consequences; (2) they implied “promises” of wage increases by suggesting that employees might receive pay raises if they reject the union; (3) they “threatened” workers with demotions by saying they didn’t know what would happen under the union’s rules; and (4) they “threatened” blacklisting by suggesting that employees’ support for the union would follow them.

The Seventh Circuit upheld all of the Board’s findings, although it did not review the Board’s decision from scratch but rather decided only whether there was “substantial evidence” to support the decision. The most obvious violation to the appellate court was the threat of blacklisting. The court found the other statements could reasonably be interpreted as unlawfully discouraging employees from unionizing. For example, the managers told the truth about the failure of negotiations at the Orlando dealership, but bringing this up in the context of the other statements could have been viewed by the workers as a threat that it would be futile for them to elect the union. And the managers were not off the hook when they spoke in hypotheticals or said that they were unaware of what would happen – answering “maybe” when asked about future pay increases was still an illegal promise of benefit and saying “I don’t know” if workers will be demoted under union rules was still a threat.

As to the employee who was suspended (and later terminated) after the employer found out his license was suspended, the Board found that his termination was illegal because it was motivated, at least in part, by his support for the union. The court again upheld this finding, stressing that the employee’s support for the union did not need to be the sole or even primary reason for his termination – it only needed to be a “motivating factor.” Here, there was enough evidence to show an unlawful motivation because the caller who left a voicemail singled out the employee for his union activity and the employer had shown “hostility” toward the union during its meeting with employees.

The lesson from this case is that employers need to be very careful about what they tell employees during a union organizing campaign. Even one statement that crosses the line can put everything else that was said in a worse light and ultimately get the employer in trouble. The case shows that employers should not make the following statements:

  • Bargaining will start from scratch (viewed as a threat that workers will lose their current pay and/or benefits).

  • You will receive a pay increase and/or other benefits even without a union (viewed as a promise that workers will receive benefits if they reject the union).

  • We are going to bargain hard if you elect a union, so do not expect things to change (viewed as a threat that supporting a union would be futile).

Perhaps you are wondering, what can employers say? Here are some examples of permissible statements:

  • We oppose the union and urge you to do the same.

  • You enjoy good pay, benefits, and job security without a union.

  • You have a right to refuse to sign an authorization card or speak to union representatives, and may vote against the union in an election even if you previously signed a card.

  • If there is an economic strike, we may permanently replace all striking workers.

  • The union cannot guarantee better wages, benefits, and working conditions (as long as there is no threat that workers risk losing what they currently have by supporting the union).

In short, employers can express their opposition to the union and discuss the pros and cons of union membership, such as having to pay union dues (in non-right to work states). Employers can also provide factual information about the law, the union (dues, fees, rules, officials’ salaries, etc.), and how unionized companies compare against non-unionized companies in terms of wages and benefits, competitiveness, etc. in the industry.

It is often hard to tell when an employer’s statement opposing a union might cross the line and be viewed as unlawfully discouraging workers from exercising their rights. Even true statements can be viewed as illegally tending to discourage union activity. To stay in the clear, employers should obtain legal advice before speaking in opposition to a union organizing campaign.

U.S. Union Numbers Continue Their Decline – Reach 100 Year Low

Barnes & Thornburg LLP Law Firm

The U.S. Bureau of Labor Statistics has released its annual report on unionization data in the United States, and the numbers continue to be on the decline for unions as a whole. Membership in unions nationally dropped from 11.3 percent in 2013 to 11.1 percent in 2014. Other interesting data points in the report include:

  • Public-sector workers had a union membership rate of 35.7 percent, more than five times higher than that of private-sector workers (6.6 percent).

  • Workers in education, training, and library occupations and in protective service occupations had the highest unionization rate at 35.3 percent for each occupation group.

  • Men had a higher union membership rate (11.7 percent) than women (10.5 percent) in 2014.

  • Among states, New York continued to have the highest union membership rate (24.6 percent), and North Carolina again had the lowest rate (1.9 percent).

A link to the full report can be found here.

Additionally, one news outlet is reporting that these numbers show a “100 year low” in U.S. Union Membership, and that article can be found here.

As discussed previously on the BT Labor Relations Blog, however, union election rule changes recently issued by the NLRB will make it significantly easier for unions to organize employers in the coming years, so we could see an upswing in these numbers, at least in the private sector, in future editions of this report.


An In-Depth Analysis of the NLRB’s Decision to Permit Employees to Use Employer Email Systems for Union Organizing and Other Non-Work Purposes

Sheppard Mullin Law Firm

The rights of employees under Section 7 of the National Labor Relations Act have been given quite the digital treatment over the last few years.  In its newest decision issued on December 11, 2014, the National Labor Relations Board ruled that “employee use of email for statutorily protected communications on nonworking time must presumptively be permitted by employers who have chosen to give employees access to their email systems.”  The full decision can be found here.

In Purple Communications, Inc. and Communications Workers of America, AFL–CIO. Cases 21–CA–0951 51, 21–RC–091531, and 21–RC–091584, the Board overturned its previous decision in Register Guard, 351 NLRB 1110 (2007), which held that employees do not have a right to use their employers’ email systems for Section 7 purposes.  But, as seen in recent years, the Board has embraced the digital age and has concluded that employee Section 7 rights include everything from social media to, in this case, company email.

Like most companies, Purple Communications, Inc., has an “Internet, Intranet, Voicemail and Electronic Communication Policy” in its employee handbook.  Among other things, this policy prohibits employees from using the “computer, internet, voicemail and email systems, and other Company equipment” to engage in “activities on behalf of organizations or persons with no professional or business affiliation with [the] Company” or “sending uninvited email of a personal nature.”  The Communications Workers of America filed an unfair labor charge regarding this policy, and the Administrative Law Judge found the policy lawful under Register Guard, dismissing the allegations.  This new decision by the NLRB then followed.

In overturning Register Guard, the Board stated that email has “effectively become a natural gathering place pervasively used for employee-to-employee conversations” and the fact that this “gathering place” is virtual does not undermine the role that email plays in Section 7 protected workplace discussions.  In fact, the Board concluded that “email’s effectiveness as a mechanism for quickly sharing information and views increases its importance to employee communication,” especially in the seven years since Register Guardwas issued.  Interestingly, the Board relied on empirical evidence regarding the rise in “teleworking” and email usage for all work functions, at the physical workplace and remotely, to demonstrate that email has become a significant platform for employee communication.  Accordingly, it was held that email’s use for Section 7 activity must be protected under the NLRA.  The Board will no longer “perpetuate” an “outmoded assessment of workplace realities.”

The Board attempted to preemptively address employers’ concerns about the ruling, by stating that this decision is a “limited one,” in that it addresses only email and not any other types of electronic communication systems.  Moreover, businesses are not prevented from monitoring their computers and email systems for legitimate management purposes.  Finally, the Board stated that an employer may justify a ban on non-work use of its email system if it can point to “special circumstances” that necessitate the ban, including system overload, the nature of the business, and excessive costs.  Regardless, the Board’s dissenting members apparently are not convinced, arguing that this decision will lead to significant problems down the road.

Interestingly, the Board fails to directly address the decision’s effect on other types of policies that could be affected, such as non-solicitation and non‑distribution policies.  The Board distanced itself from the issue, stating that “we do not find it appropriate to treat email communication as either solicitation or distribution per se.”  The dissent took issue with this stance and predicts that this decision will make it very difficult to determine what communications violate lawful restrictions against solicitation in the future.

Although the Board did not outright declare Purple Communication’s electronic communications policy unlawful, employers should be wary of overly broad or restrictive electronic communications policies.  As with the onslaught of social media decisions and subsequent policy revisions, employers should take a hard look at their electronic communications policies in light of this decision and consider whether their policies put them at risk in this evolving digital age.



Michigan Bill Would Bar Student-Athlete Unionization

Jackson Lewis Law firm

With a National Labor Relations Board decision on whether football players at Northwestern may proceed with their unionization efforts looming, Michigan is considering a bill that would prevent student-athletes from similarly attempting to unionize.

The bill, sponsored by Rep. Al Pscholka, would prevent student-athletes at Michigan’s public universities from exercising collective bargaining rights based on their participation in a university sports team. It states, “a student participating in intercollegiate athletics on behalf of a public university in [Michigan]…is not a public employee entitled to representation or collective bargaining rights….”

Michigan has seven public universities competing at the Division I level. The bill would bar student-athletes at these universities from engaging in unionization efforts similar to the ones undertaken by the football players at Northwestern.

While none of the seven universities has faced a union organizing campaign from any of its student-athletes, prompting one opponent of the bill, Rep. Andy Shor, to describe the bill as a solution to a nonexistent problem.

“I don’t understand the tremendous rush on this,” Shor said. “We’re taking an action that addresses something that’s happening in Evanston, Illinois.”

However, if the Board finds in favor of the football players at Northwestern, universities across the country likely will face similar unionization efforts from other student-athletes. Michigan’s may be an attempt to get out in front of such efforts.

According to Ramogi Huma, the president of the organization spearheading the unionization campaign at Northwestern, the College Athletes Players Association, Michigan’s bill is “backhanded confirmation that student-athletes are state employees by including them in a list of workers who can’t bargain effectively.” However, the bill does not categorize student-athletes as employees and, indeed, it states that “individuals whose position does not have sufficient indicia of an employer-employee relationship” are also prevented under the bill from engaging in collective bargaining.

Huma also warned that if the bill passes, it would have a negative impact on the ability of Michigan’s public universities to recruit student-athletes because prospective student-athletes interested in being part of a union could elect instead to go to either private universities in Michigan or universities in states with no restrictions on their unionization efforts.

Thus far, none of the seven Division I public universities in Michigan have commented publicly on the bill. However, the bill likely is being closely followed by them as well as public universities in other states and major athletic conferences, such as the Big Ten, home to Northwestern, Michigan, Michigan State, and Ohio State.