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Dec 2017
15
December 15, 2017

NLRB Overturns Employee Handbook Standard

On December 14, the National Labor Relations Board (NLRB) revised its standard for determining whether employer work rules and policies impermissibly interfere with employees’ Section 7 rights. For more than ten years, the NLRB had employed the framework from its Lutheran Heritage Village decision. A decision which would hold employers accountable for violating the National Labor Relations Act (NLRA), and interfering with employee rights when promulgating a facially neutral rule or policy where:
 
  1. “Employees would reasonably construe [it]. . .to prohibit Section 7 activity;”
  2. “The rule was promulgated in response to union activity;” or
  3. “The rule has been applied to restrict the exercise of Section 7 rights.”

Applying Lutheran Heritage, the Obama Board invalidated a whole host of rules dealing with issues ranging from workplace gossip, civility and respectful treatment, use of phones or recording devices in the workplace, and confidential information.

Familiar Rule/New Outcome

In Boeing Co, the Board faced a work rule prohibiting cameras in the workplace. Under Lutheran Heritage, the Board had routinely struck such rules down. In Boeing, however, rather than apply Lutheran Heritage's “reasonably construe” standard, the Board overruled it and established a new test claiming to provide greater clarity to employees, employers and unions. Under the new standard, when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, could potentially interfere with the exercise of NLRA rights, the Board will evaluate two things:
 
  1. “The nature and extent of the potential impact on Section 7 rights;” and
  2. “Legitimate business justifications for the contested rule.” 

The Board will now balance these competing interests. Although the Boeing Board found that the company's no-camera rule could potentially affect the exercise of NLRA rights, the impact was comparatively slight and was outweighed by important business considerations, including national security.

The Boeing Board also outlined three categories of rules that will come from this test:

Category 1 will include rules that the Board designates as lawful to maintain, 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.”

Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.”

Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.” The NLRB emphasized that “The above three categories will represent a classification of results from the Board’s application of the new test. The categories are not part of the test itself.” 

While employers faced a steep uphill battle defending their work rules under the Lutheran Heritage standard, the new Boeing standard should ensure that employer interests are considered in the overall analysis. Employers may wish to take this opportunity to review their employee handbooks and policies in light of this important development.

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