The NLRB has recently brought a measure of common sense back to its review of employer policies, including employee handbooks. Since 2004, as a result of the NLRB’s Lutheran Heritage Village-Livonia decision, many facially neutral workplace rules and handbook policies have been held to be an unlawful interference with employees’ rights protected by the NLRA.
Under the Lutheran Heritage standard, a workplace rule or handbook policy—even though not specifically prohibiting NLRA-protected activities—could still be unlawful if it could be “reasonably construed” as restricting the exercise of an employee’s NLRA rights.
Last month, the NLRB reconsidered the Lutheran Heritage standard, and in a 3-2 decision involving The Boeing Company, determined that the standard was unworkable, difficult to apply, and led to immense uncertainty for employers. The NLRB spent significant time highlighting the “absurdity” of the prior standard, which led the NLRB to invalidate many common sense workplace rules “that most people would reasonably expect every employer to maintain.”
Accordingly, the NLRB established a new test with respect to the legality of facially neutral work rules and handbook policies. Now, the NLRB will consider two factors when evaluating whether a facially neutral work rule or policy potentially interferes with employees’ exercise of their NLRA rights: (1) the nature and extent of the potential impact on NLRA rights; and (2) legitimate justifications associated with the employer’s rule.
In setting forth its new test, the NLRB has established three new “categories” of employer work rules:
Category 1: Rules that have been designated by the NLRB as lawful to maintain, either because (a) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (b) the potential adverse impact on employees’ protected rights is outweighed by justifications associated with the rule. The NLRB noted that rules requiring employees to maintain harmony and basic standards of civility in the workplace are lawful Category I rules.
Category 2: Rules that warrant individual scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether such an adverse impact on employees’ NLRA rights is outweighed by a legitimate justification. The NLRB did not cite specific examples of Category 2 rules.
Category 3: Rules that have been designated by the NLRB as unlawful because the rule would prohibit or limit protected conduct, and the adverse impact on NLRA rights is not outweighed by a legitimate justification. As an example, the NLRB cited work rules prohibiting employees from discussing their wages or benefits with each other.
Through the newly established categories of work rules, the NLRB hopes to strike a proper balance between the asserted business justifications of employers and the potential invasion of NLRA rights of employees.
In its recent decision, the NLRB applied its new test to The Boeing Company’s “no camera” rule, which restricted the use of camera-enabled devices on its property. The ALJ in the case, applying the Lutheran Heritage standard, had determined that the rule was unlawful, finding it could be reasonably construed as interfering with employees’ Section 7 rights.
The NLRB reversed the ALJ’s decision, finding the no camera rule can be classified as a Category 1 work rule. Even though Boeing’s no camera rule may potentially affect employees’ Section 7 rights in some circumstances, the NLRB held that the risk was comparatively slight and largely outweighed by Boeing’s substantial justifications for the rule. These justifications included security protocols for classified government work, protecting proprietary information, and reducing the risk of terrorist attacks.
While the NLRB’s new standard is a step in the right direction to restore legitimate work rules regarding civility and other legitimate conduct concerns, only time will tell how the NLRB decides to characterize various work rules and policies. The NLRB noted that it will need to determine in future cases what types of work rules (beyond the few examples given) fall into each of the three categories.
Nonetheless, employers should be encouraged that the NLRB is slowly returning to a more common-sense approach to employment policies, recognizing that employers have the right and ability to place reasonable controls on employee conduct issues that are not meant to restrict the NLRA rights of employees.