For well over a decade the National Labor Relations Board has freely invalidated seemingly neutral, common-sense workplace rules simply because employees might understand them to limit their rights under federal labor law. Rules were held unlawful even if they were neither intended to limit employee rights nor ever applied in a way that actually interfered with those rights. However, a recent decision by a newly constituted, Republican-majority board adopts a new analysis for determining if workplace rules are lawful.1The new test will be applied to future cases as well as all pending cases. Practically speaking, this is one of the most significant and employer-friendly legal decisions of 2017 in the labor and employment law arena.

All employees, unionized or not, have the right to engage in concerted employment-related activities under the National Labor Relations Act (NLRA).2 Since 2004, the board has held that workplace rules violate the NLRA if employees might “reasonably construe” them to interfere with their rights.3

Instructing employees to be civil in the workplace could very well be unlawful, for example, because that requirement might be interpreted to prohibit protests of working conditions.4 Furthermore, any ambiguity in a rule was construed against the employer.

Workplace rules have fallen left and right under that test, and most employee handbooks probably contain provisions that would not pass muster under the test. For example, in a single case last year, the board struck down all of the following:

• a rule prohibiting employees from allowing unauthorized individuals to access information without prior written approval;
• a Code of Business Conduct provision that prohibited arguing with co-workers, subordinates or supervisors; failing to treat others with respect; or failing to demonstrate appropriate teamwork;
• a rule requiring employees “to maintain a positive work environment by communicating in a manner that is conducive to effective working relationships;” and,
• a rule prohibiting employees from making recordings in the workplace.5
• Applying the 2004 test, the board determined that all four of the rules violated the NLRA and could be reasonably construed to discourage unionizing or other concerted activities protected by the act.6

Despite compelling criticism that the 2004 test led to federal micromanagement of the workplace, that test has survived – until now. The new board decision involved a Boeing policy that prohibited employees from taking photos or videos at Boeing worksites without a valid business need and approval. The policy further provided that an authorizing manager would decide if there is a business need for camera use (e.g., as necessary to meet contractual commitments, for training or for other purposes that provide a positive benefit to the company). An administrative law judge struck down the policy because Boeing had adequate protections for its secured military and commercial information, and the policy amounted to an impermissible infringement on NLRA rights because it could chill employees from exercising those rights. The board reversed that ruling.

The new framework established in the Boeing case requires balancing the nature and extent of a workplace rule’s potential limitation on NLRA rights against the employer’s business justifications for the rule. (Of course, a rule is lawful, and no balancing is required, if it has no tendency in the first place to interfere with employee rights.) In addition, as part of the balancing analysis, the board is to keep in mind certain aspects of its duties. The duties are to 1) provide parties certainty and clarity; 2) distinguish among types of NLRA protected activities and compare to different types of business justifications; 3) refrain from further analysis of a facially neutral rule that, when reasonably interpreted, does not violate NLRA rights; 4) focus on an employee’s perspective when evaluating a rule’s impact on employees; and 5) find that a rule can be maintained even if the rule cannot be applied against employees engaging in NLRA protected conduct. If the justifications for the rule outweigh its adverse impact on NLRA rights, then the rule is lawful; conversely, if the impact outweighs the justifications, it is unlawful.

Applying the new standard, the board held that Boeing’s policy limiting camera use was lawful. The board reasoned that, while the rule may, in some circumstances, affect the exercise of NLRA rights, the adverse impact is comparatively slight. The board further concluded that the policy’s potential adverse impact is outweighed by the substantial and important justifications, such as Boeing’s need to maintain heightened security protocols to maintain its accreditation as a federal contractor.

The board further announced that, going forward, three categories of rules will be delineated to provide greater clarity to employees, employers and unions. The first category will include rules that the board designates as lawful to maintain, either because 1) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or 2) the potential adverse impact on protected rights is outweighed by justifications associated with the rules. Examples of these types of rules are those such as the one at issue in Boeing and rules requiring employees to abide by basic standards of civility and to maintain harmonious relationships in the workplace.

The second category will include rules that warrant scrutiny, on a case-by-case basis, 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. Finally, the third category 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. As an example, the Boeing decision indicates that a rule that prohibits employees from discussing wages or benefits with one another would fall into this third category.

The Boeing decision should offer employers a greater sense of certainty and an increased level of predictability regarding the lawfulness of their workplace policies. However, with the chairman’s departure earlier this month at the end of his term, the board is now split two and two along party lines. Further application of the new Boeing test by the board will likely be delayed until a new board member is nominated and confirmed, which is likely several months away.

ABOUT THE AUTHORS
Donn Meindertsma is a partner in Conner & Winters LLP’s Washington, D.C., office. Mr. Meindertsma has been assisting clients with labor and employment law issues for more than 30 years. He frequently appears before administrative and regulatory agencies, including the EEOC, Department of Labor and National Labor Relations Board.

Hayley Stephens is an associate at Conner & Winters LLP. Ms. Stephens is based in the firm’s Tulsa office where she practices labor and employment law and tort defense. Prior to joining Conner & Winters, she earned a Bachelor of Arts, summa cum laude, from the University of Arkansas and obtained her J.D. from Vanderbilt University Law School.

1.See Boeing Co., 365 NLRB 154 (2017) (abrogating the Lutheran Heritage “reasonably construed” standard).
2. Pursuant to Section 7 of NLRA, “[e]mployees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. §157. Section 8(a)(1) provides enforcement of that policy by stating that it shall be “an unfair labor practice” to “interfere with, restrain, or coerce employees in the exercise of the rights” protected.
3. See Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) (adopting the “reasonably construed” standard for determining whether a facially neutral policy was unlawful under the NLRA), abrogated by Boeing, 365 NLRB 154 (2017).
4. Many neutral, well-intentioned and seemingly lawful employer policies have been held unlawful under the “reasonably construed” standard. See, e.g., Hills & Dales General Hosp., 360 NLRB 611, 612 (2014) (finding that employee handbook provision requiring employees to represent the employer “in the community in a positive and professional manner in every opportunity” was an unlawful violation of the NLRA); William Beaumont Hosp., 363 NLRB No. 162 (April 13, 2016) (board majority finding unlawful a rule that prohibited employees from engaging in conduct that “impedes harmonious interactions and relationships” and from making “negative or disparaging comments about the . . . professional capabilities of an employee or physician to employees, physicians, patients, or visitors.”).
5. T-Mobile USA, Inc., 363 NLRB No. 171 (April 29, 2016).
6. On appeal, the 5th Circuit found that the board had erred in finding that a reasonable employee would construe the first, second and fourth rules as prohibiting protected activity. T-Mobile USA, Inc. v. NLRB, 865 F.3d 265, 268 (5th Cir. 2017).

Originally published in the Oklahoma Bar Journal -- OBJ 89 pg. 36 (April 2018)