On December 14, 2017, the National Labor Relations Board (the “Board”), in The Boeing Co., 365 NLRB 154 (2017), established a new standard for evaluating the validity of employer rules, policies, and handbook provisions under the National Labor Relations Act (the “Act”). Over the last several months, the Board was busy putting together Memorandum GC 18-04, which guides employers (and their attorneys) about the legality of specific handbook rules.
In 2004, the Board decided Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), which said that the mere maintenance of a neutral work rule violated Section 8(a)(1) of the National Labor Relations Act if employees could reasonably construe that the rule would prohibit protected concerted activity under Section 7 of the NLRA.
The 2004 Board established a three-prong test to determine whether a rule that does not explicitly restrict activities protected by Section 7 nevertheless violates the Act. The violation of the Act was dependent on a showing of one of the following, “(1) employees would reasonably construe the language 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.”
Notice the “or,” this means that if any of the three prongs are found, then the handbook rule in question would have been found to violate the Act.
Since 2004, most of the cases decided under the Lutheran Heritage been decided under the “reasonably construe” first prong. According to the Board, this has resulted in “rampant confusion” for employers and for the Board itself when attempting to apply the standard. The Board found that by focusing on how the employees would “reasonably construe” a handbook rule, that it excluded from consideration any justifications associated with policies, rules, and those handbook provisions. This has resulted in arbitrary results because of the singular focus on how the employee would construe the workplace rule.
Handbooks Going Forward
The Boeing Co. Decision radically changes how the Board evaluates employer rules, including rules that regulate employee conduct in and out of the workplace – including social media.
The Board implemented and applied a balancing test that favors the maintenance of rules, which will expand the scope and type of rules that the Board will find lawful. The Board directs that they must evaluate workplace rule consistent with the Board’s duty to strike the proper balance between “asserted business justifications” and “the invasion of employee rights in light of the Act and its policy,” focusing on the perspective of the employees.
The Board established three categories of employment policies, rules, and handbook provisions:
Category 1 – Deemed Lawful
These are rules that are lawful to maintain because (I) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA right, OR (ii) the potential adverse impact on protected rights is outweighed by the justifications associated with the rule
Category 2 – Requires Individual Scrutiny
Rules must be individually scrutinized to determine if they interfere with NLRA rights, and if so, whether there any adverse impact on the NLRA protected conduct is outweighed by the legitimate justifications.
Category 3 – Unlawful Rules
These are rules that violate the NLRA because they prohibit or limit NLRA protected conduct, and the adverse impact in the protected rights is not outweighed by the justifications associated with the rule, ex. employees discussing wages or benefits with one another.
Category 1 - Lawful Rules
No photography or recording rules
Insubordination, non-cooperation, and refusal to comply with orders rules
Disruptive behavior rules
Rules protecting disclosure of confidential, proprietary, and customer information
Rules against defamation or misrepresentation
Rules prohibiting use of employer’s logos or intellectual property
Rules requiring authorization to speak on behalf of the company
Rules banning disloyalty, nepotism, or self-enrichment
Category 2 - Requires Scrutiny
Broad conflict of interest rules that do not specifically target fraud and self-enrichment and that do not restrict membership in a union
Confidentiality rules encompassing employer business or employee information
Rules preventing disparagement of the employer
Prohibiting or regulating use of the employer's name
Restricting employees from speaking to the media
Banning off-duty conduct that would harm the employer
Prohibiting making false statements
Category 3 - Unlawful Rules
Rules specifically regarding wages, benefits, or working conditions
Rules against joining outside organizations or voting on matters concerning employer
If you need help determining whether your handbook or workplace rules are in line with this new labor regulation, click here to schedule a call.