Tag: NLRB

Bite Your Tongue: NLRB Rules that Produce Company’s Media, Confidentiality Policies are Lawful

The NLRB under the current administration continues to issue decisions that factor in legitimate business considerations of employers when evaluating rules that are alleged to restrict employee protections under the NLRA.  One such recently issued decision, LA Specialty Produce Company, 368 NLRB No. 93 (October 10, 2019), may have particular significance because it addresses an important issue — restrictions on communications responsive to inquiries from the media.

The restriction at issue in the LA Specialty case provided as follows:

“Employees approached for interview and/or comments by the news media, cannot provide them with any information. Our President, Michael Glick, is the only person authorized and designated to comment on Company policies or any event that may affect our organization.”

The Board’s general counsel issued a complaint alleging that the rule in its entirety violated the NLRA because it purportedly chilled employees from exercising their section 7 rights under the NLRA, including the right to discuss work issues publicly when asked to comment by the press.  The administrative law judge found the rule to be overly broad, and therefore unlawful, because on its face it could be construed to cover NLRA-protected activities; however, the Board disagreed with this reading of the rule.  While the Board recognized that the first sentence of the rule, standing alone, might suggest that employees may never speak to the news media when approached for comment, it concluded that an objectively reasonable employee would understand that the second sentence qualified the first sentence by explaining that only the company president was authorized and designated to comment on company matters. Thus, read as a whole, a reasonable employee would understand that he or she is only precluded from speaking on behalf of the employer when approached for comment.

The Board also designated this rule as a “category 1” rule under the principles announced by the Board in Boeing Co., a Board decision that was issued in December of 2017. “Category 1” rules include rules the Board designates as lawful, either because (i) the rule, when reasonably interpreted, 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.  See our client alert here.  Since there is no Section 7 right to speak to the media on behalf of the employer, the Board concluded that the employer’s media contact restriction, when reasonably interpreted, would not potentially interfere with the exercise of Section 7 rights.

© 2019 Mitchell Silberberg & Knupp LLP

For more NLRB decisions, see the National Law Review Labor & Employment law page.

Legal Alert: Not So Fast: National Labor Relations Board Rejects Boeing S.C. Micro Unit

On September 9, 2019, the National Labor Relations Board (the “Board”) clarified its test for unionizing “micro units” of employees within larger workforces, and prevented the International Association of Machinists from representing a small group of Boeing Co. technicians at a plant in South Carolina. The Boeing Company, 368 NLRB No. 67 (2019). In a three-to-one vote, the Board said a proposed bargaining unit consisting of about 175 flight-readiness technicians at Boeing’s Charleston Final Assembly operation does not meet federal standards for appropriate units, because the workers are not distinct from the site’s larger workforce of approximately 2,700 maintenance and production workers.

The International Association of Machinists won an election in May of 2018 to become the bargaining representative of this smaller unit of employees. This election followed an earlier election where a large unit of production and maintenance workers rejected the Union in a 2,087 – 731 vote. After the May 2018 election, the Company appealed the certification of the smaller unit of Boeing employees, arguing that the NLRB Regional Director had improperly approved the small unit of flight-readiness technicians.

In Boeing, the Board indicated that the standard it set forth for unionizing smaller bargaining units of employees in the PCC Structurals decision from December of 2017 was being misapplied. The standard for unionizing micro units of employees, as set forth in Boeing, requires a three-step legal analysis to determine the appropriateness of the proposed bargaining unit. First, the proposed unit must share an internal community of interest. Second, the interests of those within the proposed unit and the shared and distinct interests of those excluded from that unit must be comparatively analyzed and weighed. Third, consideration must be given to the Board’s decisions on appropriate units in the particular industry involved.

Moving forward, unions will have to demonstrate a sufficiently distinct community of interest among the proposed bargaining unit as compared to excluded employees. And, excluded employees’ distinct interests will have to outweigh the similarity of interests that excluded employees share with members of the proposed bargaining unit. This decision strikes a strong blow against unions’ efforts to organize and represent smaller bargaining units.

Copyright © 2019 Ryley Carlock & Applewhite. A Professional Association. All Rights Reserved.

For more NLRB decision-making, see the Labor & Employment law page on the National Law Review.

Changing Course: “Contract Coverage” is the New Standard for Unilateral Action

The National Labor Relations Board (NLRB) departed from precedent last week when it addressed whether an employer’s unilateral action under a collective bargaining agreement was lawful.

The case in question – M.V. Transportation, Inc. and Amalgamated Transit Union Local #1637, AFL–CIO, CLC., Case 28– CA–173726 – concerned what standard the Board should apply to determine whether a collective bargaining agreement grants an employer the right to take certain unilateral actions, without further bargaining with the union. Under prior case law, the Board had applied the “clear and unmistakable waiver” standard, under which the employer would be found to have violated the Act unless a provision of the collective bargaining agreement specifically refers to the type of employer decision at issue, or mentions the kind of factual situation that the case presents.

In M.V. Transportation, the Board noted that several appeals courts have rejected the “clear and unmistakable waiver” standard in favor of a “contract coverage” standard, including, importantly, the United States Court of Appeals for the District of Columbia Circuit, which, by statute, has full jurisdiction to review NLRB decisions.  Under the “contract coverage” standard, the decision-maker must examine the plain language of the collective bargaining agreement to determine whether the action taken by an employer was within the “compass or scope of contractual language granting the employer the right to act unilaterally. The Board cited the example of a collective bargaining agreement that broadly grants the employer the right to implement new rules and policies and to revise existing ones, noting that under such circumstances, an employer would not violate the law by unilaterally implementing new attendance or safety rules or by revising existing disciplinary or off-duty-access policies.

While the Board did choose to adopt the “contract coverage” standard, it did not totally abandon the “waiver” concept. It warned that if an agreement does not clearly cover the employer’s disputed act, and that act has materially, substantially and significantly changed a term or condition of employment constituting a mandatory subject of bargaining, the employer will have violated the law unless it demonstrates that the union clearly and unmistakably waived its right to bargain over the change, or that its unilateral action was privileged for some other reason.

In a move that is becoming more common in NLRB cases, the Board also decided to apply the new standard retroactively in all pending unilateral change cases where the determination of whether the employer violated the law turned on whether contractual language granted the employer the right to make the change in question.

Under the new standard, employers should take care in collective bargaining to make sure that the plain language of the collective bargaining agreement supports any unilateral action that the employer wants to reserve the right to take. The language should be clearly written and explicit in its grant of authority, and its meaning should be clear when applying ordinary principles of contract interpretation. By doing that, the employer can assure that its unilateral action does not violate the law or the agreement.

Copyright © 2019 Godfrey & Kahn S.C.

California Arbitration Roundup: Employers Are 3-1 For Favorable Arbitration Rulings

California employers received mostly good news this past month on the arbitration front, with a trio of pro-employer arbitration-related rulings.  The California Supreme Court’s recent ruling invalidating an employer’s arbitration agreement (discussed below) is a notable exception.

California Supreme Court Invalidates Employer’s Arbitration Agreement As Unconscionable.

In OTO LLC v. Ken Kho, the California Supreme Court ruled that an Oakland Toyota dealership’s arbitration agreement with a former employee was unenforceable and was so unfair and one-sided that it was procedurally and substantively unconscionable.  “Arbitration is premised on the parties’ mutual consent, not coercion, and the manner of the agreement’s imposition here raises serious concerns on that score,” the majority opinion said.

In 2013, Ken Kho, then an employee of the dealership, One Toyota, was asked to sign several documents, including an arbitration agreement.  Kho signed it, and was later terminated.

The California Supreme Court acknowledged that California and federal laws strongly favor arbitration. However, the Court considered the following factors in determining that One Toyota’s arbitration agreement was unconscionable:

  • The arbitration agreement purported to waive Kho’s right to file a wage claim with the Labor Commissioner and to have a “Berman” hearing before the Labor Commissioner (while not dispositive, the Court noted that this remains a significant factor in considering unconscionability of employee arbitration agreements);

  • The agreement was presented to Kho in his workspace, along with other employment-related documents;

  • Neither its contents nor its significance was explained;

  • Kho was required to sign the agreement to keep the job he had held for three years;

  • Because One Toyota used a piece-rate compensation system, any time Kho spent reviewing the agreement would have reduced his pay;

  • A low-level employee (a porter) presented the agreement to Kho, “creating the impression that no request for an explanation was expected and any such request would be unavailing”;

  • By having the porter wait for the documents, One Toyota conveyed an expectation that Kho sign them immediately, without examination or consultation with counsel;

  • There was no indication that the porter had the knowledge or authority to explain the terms of the agreement;

  • Kho was not given a copy of the agreement he had signed;

  • The agreement was written in an extremely small font in the form of a “single dense paragraph” of 51 lines, and the text was “visually impenetrable” and “challenge[d] the limits of legibility”;

  • The sentences were complex, filled with statutory references and legal jargon;

  • Kho was not offered a version to read in his native language (while the Court noted this factor, it did not consider it because it did not know Kho’s English proficiency);

  • The arbitration agreement did not make clear One Toyota’s obligation to pay arbitration-related costs (and rather cited to statutory provisions and referenced legal precedent; the Court noted “It would have been nearly impossible to understand the contract’s meaning without legal training and access to the many statutes it references. Kho had neither.”);

  • One Toyota’s agreement did not mention how to bring a dispute to arbitration, nor did it suggest where that information might be found (e.g., by citing to a commercial arbitration provider such as JAMS or AAA); and

  • One Toyota’s arbitration process was complicated to navigate and would likely require an attorney, making it cost-prohibitive for Kho.

The Court concluded that “[w]e have not said no arbitration could provide an appropriate forum for resolution of Kho’s wage claim, but only that this particular arbitral process, forced upon Kho under especially oppressive circumstances and erecting new barriers to the vindication of his rights, is unconscionable.”

Employers would thus be well-advised to revisit their employee arbitration agreements to ensure that they do not contain any of the defects discussed by the Supreme Court in the Kho case.

NLRB Upholds Employer Conduct Related to Mandatory Arbitration Agreements

In Cordúa Restaurants, Inc., 368 NLRB No. 43 (2019), the National Labor Relations Board (NLRB) addressed the lawfulness of employer conduct surrounding mandatory arbitration agreements for the first time since the U.S. Supreme Court’s 2018 decision in Epic Systems v. Lewis, where the Court held that mandatory arbitration agreements do not violate the National Labor Relations Act (NLRA) (see here).  In Cordua Restaurants, the NLRB ruled in part that employers are not prohibited under the NLRA from: (1) informing employees that failing or refusing to sign a mandatory arbitration agreement will result in their discharge; and (2) promulgating mandatory arbitration agreements in response to employees opting in to a collective action under the Fair Labor Standards Act or state wage-and-hour laws.

The NLRB’s decision in Cordua Restaurants is a natural extension of the Supreme Court’s analysis and ruling in Epic Systems.  There, the Court held that Congress, when passing the Federal Arbitration Act (FAA) in 1925, instructed courts to enforce arbitration agreements as written.  Since the passage of the FAA predates the NLRA by ten years, and since the NLRA says nothing about overruling the FAA, the NLRB could not, under the guise of enforcing the NLRA, rule that an arbitration agreement that otherwise is lawful on its face violates the NLRA.  This decision by the NLRB is further evidence of that agency’s retreat from past policies advanced by the NLRB in the prior administration and likely will not be overruled.

California Court of Appeals Compels Employee to Arbitrate Claims Even Though He Filed Suit Before Signing Arbitration Agreement

In Quiroz Franco v. Greystone Ridge Condominium, the California Court of Appeals compelled an employee to arbitrate his claims against his employer even though the employee filed his lawsuit two days before he signed an arbitration agreement.  The Court held that the arbitration agreement was clear in that it required arbitration of any claims and that it did not contain any restriction based on when a claim was filed.

In the case, Quiroz Franco, the employee, was given an arbitration agreement on March 9, 2018, and a Spanish translation shortly thereafter.  On March 19, 2018, he filed a lawsuit against his employer, alleging harassment, discrimination, and wage and hour claims among others.  On March 21, 2018, Quiroz Franco handed in his signed arbitration form, which the employer used to attempt to compel him to arbitrate. The lower court ruled that the claims in the employee’s suit started to accrue before he signed the arbitration agreement, so arbitration couldn’t be compelled.  The employer appealed and the Court of Appeal overturned the lower court’s decision.

California Court of Appeals Rules that Unfair Competition Law Claims Are Arbitrable

In Clifford v. Quest Software Inc., the California Court of Appeals addressed whether an employee’s claim against his employer for unfair competition under Business and Professions Code section 17200 (the UCL) was arbitrable, ruling that it was.  The employee brought various wage and hour claims against his employer, and the employer moved to compel arbitration based on the parties’ arbitration agreement.  The trial court granted the motion in part and ordered to arbitration every cause of action except the employee’s UCL claim, which the court concluded was not arbitrable.  The Court of Appeals reversed, holding that the employee’s UCL claim was subject to arbitration along with his other causes of action—more good news for California employers.

© 2019 Mitchell Silberberg & Knupp LLP

Running Backs NLRB Petition Seeks To “Stiff Arm” NFL Players Association With New Bargaining Unit

An upstart labor organization, the International Brotherhood of Professional Running Backs (IBPRB), has filed a petition with Region 13, the Chicago office of the National Labor Relations Board (NLRB), seeking to form a separate union for the National Football League’s running backs. The unit clarification petition, NLRB Case No. 13-UC-246227, seeks to sever and create a separate running back bargaining unit from the National Football League Players Association (NFLPA), which has historically represented all NFL players regardless of position.

A unit clarification or “UC” petition generally is used to resolve disputes regarding the unit placement of disputed positions, typically newly created positions, in a process referred to as an accretion. However, a UC petition also can be used as a method to affect the subdivision of an existing bargaining unit, as the IBPRB seeks to do here. A severance effort is most often undertaken when some changed circumstances have occurred that have negated any “community of interest” (similarity of terms and conditions of employment) that may have previously existed among the bargaining unit and raise uncertainty regarding the continued appropriateness of the existing bargaining unit.

The petition filed by the IBPRB cited “the unique career structures” of running backs as its basis for the loss of the necessary community of interest between the running backs and the other NFL player members of the NFLPA.

For a successful UC petition, the petitioner must show “recent, substantial changes in their operations, or that other compelling circumstances exist which would warrant disregarding the long-existing bargaining history” of the parties. In Batesville Casket Company, Inc., 283 NLRB 795 (1987), the NLRB relied upon the standard established in Rock-Tenn Co., 274 NLRB 772 (1985), and dismissed a UC petition because the employer-petitioners did not show any “recent, substantial changes in their operations, or that other compelling circumstances which would warrant disregarding the long-existing bargaining history” of the parties.

It may be difficult for the IBPRB to meet the “recent, substantial changes” test.

While the role of a running back has evolved over recent years as the passing game has become the dominant force in offensive schemes, the basic mission of the position– to carry the ball, catch passes, and block – is unchanged. Whatever may be the unique career structures to which the IBPRB referred in the petition (the average career of an NFL running back is 2.5 years compared to 3.3 years for all positions), it may be difficult for the union to show that there have been “recent, substantial changes” in the running back position to satisfy the Batesville Casket threshold for unit clarification.

In representation cases such as this, the regional office of the NLRB conducts an initial investigation and holds a hearing if appropriate. A notice of hearing has not yet been issued. The NLRB may still be in a huddle.

Jackson Lewis P.C. © 2019

More sports law on the National Law Review Entertainment, Sports & Art law page.

NLRB Will No Longer Require Employers to Permit Union Organizers in “Public Space” on Employers’ Property

Overruling 38 years of precedent, the NLRB has determined employers have no duty to permit union organizers to use “public space” to solicit union support on their property.  UPMC and SEIU, 368 NLRB No. 2 (June 14, 2019).

UPMC is a hospital system based in western Pennsylvania.  SEIU organizers visited the hospital cafeteria and distributed organizing materials to employees over lunch discussing union organizing activity. The hospital maintained a no-solicitation practice that prohibited nonemployees from using the cafeteria for purposes of solicitation.  When the hospital learned of the union organizers’ presence and purpose, they were asked to leave the cafeteria by security guards, and when they refused, local police were summoned and escorted the organizers off the property.  The Union filed unfair labor practice charges, alleging that this act was illegal.

The NLRB disagreed. Since 1981, the NLRB has created an entitlement to union agents to obtain access to “public space” – or, space in an employer’s property open to the public – for the purpose of soliciting union support among employees.  Typically, the “public space” involved a cafeteria or a restaurant, and union agents were permitted to use the space in a manner consistent with its intended use as long as they were not disruptive.  Montgomery Ward & Co., 256 NLRB 800, 801 (1981).

“The Board’s approach has been soundly rejected by multiple circuit courts (of appeal).”  In support of this finding, the Board recited decisions from the circuit courts of appeal of the 6th, 4th and 8th circuits, concluding the “public space” exception was insupportable in light of the United States Supreme Court decisions that permit employers to prohibit union agents from entering an employer’s property for organizing activity if the union could appeal to employees through other means and if the employer does not discriminate against unions by permitting other persons or organizations from soliciting on its property.  NLRB v. Babcock & Wilcox, 351 U.S. 105, 112 (1956).  Even when those conditions exist, the United States Supreme Court has held both of these exceptions are “narrow” and unions have a “heavy” burden of proof to establish the exception.  Sears Roebuck & Co. v. San Diego District Council of Carpenters, 436 U.S. 180, 205 (1978).

The NLRB agreed with the judicial criticism of its previous precedent and held:

… to the extent that Board law created a “public space” exception that requires employers to permit nonemployees to engage in promotional or organizational activity in public cafeterias or restaurants absent evidence of inaccessibility or activity-based discrimination, we overrule those decisions.

While the NLRB decision stops short of rejecting the policy of “nonacquiescence” where the Board ignores circuit court precedent which refuses to enforce its orders, it is illustrative of a growing sensitivity to the maintenance of Board law that is inconsistent with the precedent of the United States’ courts which refuse to enforce flawed NLRB precedent.

© 2019 Dinsmore & Shohl LLP. All rights reserved.
This article was written by Mark A. Carter and Brian J. Moore from Dinsmore & Shohl LLP.
For more on Union matters, see the National Law Review Labor & Employment page.

Can You Prohibit Employees From Using Cell Phones At Work?

With the prevalence of cell phones in today’s society, many companies struggle with how to manage employee time spent on personal mobile devices. But there are legal limits on what employers can do on this front. The National Labor Relations Board (NLRB) has taken the position that employees have a presumptive right, in most instances, under the National Labor Relations Act (NLRA) to use personal phones during breaks and other non-working times.

A recent advice memo issued by the agency has reaffirmed its stance – even since the NLRB generally has taken a more lax view of employer personnel policies over the last year. At issue, in this case, was a company policy that limited employees’ use of personal cell phones in the workplace. The relevant analysis in the NLRB memo states:

“This [company’s] rule states that, because cell phones can present a ‘distraction in the workplace,’ resulting in ‘lost time and productivity,’ personal cell phones may be used for ‘work-related or critical, quality of life activities only.’ It defines ‘quality of life activities’ as including ‘communicating with service or health professionals who cannot be reached during a break or after business hours.’ The rule further states that ‘[o]ther cellular functions, such as text messaging and digital photography, are not to be used during working hours.’ This rule is unlawful because employees have a [NLRA] Section 7 right to communicate with each other through non-Employer monitored channels during lunch or break periods. Because the rule prohibits use of personal phones at all times, except for work-related or critical quality of life activities, it prohibits their use on those non-working times. The phrase regarding text messaging and digital photography is more limited, but still refers to ‘working hours,’ which the Board, in other contexts, has held includes non-work time during breaks. Although the employer has a legitimate interest in preventing distractions, lost time, and lost productivity, that interest is only relevant when employees are on work time. It, therefore, does not outweigh the employees’ Section 7 interest in communicating privately via their cell phones, during non-work time, about their terms and conditions of employment.” (emphasis added)

In other words, while an employer may be able to limit employee use of personal mobile devices during working time in order to minimize distractions, having a policy in place that is worded in a way that limits that activity during non-working time may run afoul of the NLRA.

This is another reminder for employers to ensure their policies are drafted in a way that conforms to applicable NLRB standards. A poorly drafted rule – even with the best intentions – can result in legal headaches for a company.

 

© 2019 BARNES & THORNBURG LLP
This post was written by David J. Pryzbylski of Barnes & Thornburg LLP.
Read more employer HR policies on the labor and employment type of law page.

Woo-Hoo! Workplace Civility Rules Upheld by NLRB General Counsel

Between 2009 and 2017, the National Labor Relations Board (NLRB) invalidated countless workplace employment policies – including those of non-union employers – where the agency found them to potentially infringe on workers’ rights under the National Labor Relations Act. Among the types of policies overturned were “positive workplace” or “workplace civility” rules, which were said to limit employees’ right to discuss the terms and conditions of their employment. While courts sometimes intervened to strike down these board decisions, the NLRB nevertheless largely held to its view.

However, in the wake of the Boeing case last year, the agency has been taking a fresh look at workplace civility rules. And those results are refreshing.

This week, the NLRB General Counsel’s office released a memo in which it analyzed a “Commitment to My Co-Workers” policy of a company. That policy required workers to “maintain healthy relationships” and to address conflicts with co-workers directly instead of behind their backs. Before the new standard announced in Boeing, that policy almost certainly would have been found to be unlawful. But relying on Boeing, the NLRB General Counsel determined the workplace civility rules at issue were permissible and that the company could require employees to sign off on the policy and even terminate ones who refused to do so.

This is great news for companies who want to promote positivity and healthy relationships in the workplace. It also serves as a reminder that under the NLRB’s current employment policy test enunciated in Boeing, many workplace policies that may have been rescinded due to board decisions issued between 2009-2017 may be worth revisiting in 2019.

 

© 2018 BARNES & THORNBURG LLP
This post was written by David J. Pryzbylski of Barnes & Thornburg LLP.

You’ve Got Mail: NLRB Requests Briefing on Standard for Employee Use of Employer Owned Electronic Communication Systems

In what could signify the beginning of the end for Purple Communications, Inc., 361 NLRB 1050 (2014) and guaranteed employee access to Employer computer systems for union organizing purposes, the NLRB issued a notice on August 1 inviting the filing of briefs on whether the Board should uphold, modify or overrule the decision.  Under Purple Communications (which we previously covered here), employees have a presumptive right to use their employer’s e-mail system to engage in protected activity under Section 7 of the NLRA on nonworking time, unless the employer can demonstrate circumstances allowing it to restrict such use.  Overturning Purple Communications could return the Board to the standard under Register Guard, 351 NLRB 1110 (2007), which permitted employers to impose Section 7-neutral restrictions on an employee’s non-work use of their e-mail systems, even if those restrictions ultimately limited the employee’s use of the employer’s e-mail for communications involving protected activity.

The NLRB issued the notice in response to a 2016 ALJ decision finding that an employer’s computer usage policy did not comply with Purple Communications standard, because it prohibited employees from using their work e-mail for any nonbusiness purpose.  Board Members Pearce (who was in the Purple Communicationsmajority) and McFerran dissented from the decision to solicit briefs.  Both dissenting Members contended that issuing the notice was inappropriate in light of the pending appeal of Purple Communications before the Ninth Circuit and their view that there has been no change in workplace trends or evidence showing that Purple Communications has created significant challenges for employers, employees, unions or the Board.

Perhaps in recognition that workplace communication technology has clearly expanded beyond e-mail, the notice welcomes briefing on what standard the Board should apply to other methods of employee communication on employer-owned equipment (e.g., instant messages, text messages, and social media postings). While the Board has limited its holdings in the area of computer usage to employer e-mail systems, this notice may indicate a move by the Board to apply a consistent standard to all forms of workplace communication platforms.

 

© 2018 Proskauer Rose LLP.
This post was written by Michael J Lebowich and Jordan Simon of Proskauer Rose LLP.
For more labor and employment news, check out the National Law Review’s Labor and Employment Page.

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.