The NLRB’s Holiday Gift to Employers
The new General Counsel for the NLRB recently issued a memorandum explaining that the NLRB would be moving swiftly to review several of the more controversial, and arguably anti-employer, decisions issued in the last eight years. On December 14, thirteen days later, on the third night of Hanukkah, nine days before Festivus, and less than two weeks before Christmas, the NLRB took the first steps towards fulfilling this promise, when it issued two employer-friendly decisions that overturned two of the most controversial rulings of the NLRB under the Obama administration. Happy Holidays, Employers!
First, in Hy-Brand Contractors the NLRB overturned the Browning-Ferris joint employer standard. When issued, the Browning-Ferris decision was shocking as it changed years of NLRB precedent. Through the Hy-Brand decision, NLRB has returned to the long-standing test for joint employment that focuses on whether joint control is exercised (rather than merely reserved), whether such control has a “direct and immediate” impact on employment terms (rather than a merely indirect impact), and whether such control is not merely “limited and routine.”
Next, in Boeing Co. & Society of Professional Engineering Employees in Aerospace, the NLRB overturned the somewhat paternalistic Lutheran Heritage standard that has been used to invalidate policies in employee handbooks if it was determined by the NLRB that employees could “reasonably construe” the policy as barring them from exercising their rights under the NLRA. In application, the Lutheran Heritage standard was often applied in a way that caused employers to opine that the NLRB thought employees were lacking in intellect or common sense if they were to construe the policies as chilling or prohibiting their rights. On pages 3-4 of the Boeing opinion, the NLRB states that the new standard will be as follows:
Under the standard we adopt today, when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule. We emphasize that the Board will conduct this evaluation, 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 employees, which is consistent with Section 8(a)(1).
As the result of this balancing, in this and future cases, the Board will delineate three categories of employment policies, rules and handbook provisions (hereinafter referred to as “rules”):
- 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. Examples of Category 1 rules are the no-camera requirement in this case, the “harmonious interactions and relationships” rule that was at issue in William Beaumont Hospital, and other rules requiring employees to abide by basic standards of civility.
- 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. An example of a Category 3 rule would be a rule that prohibits employees from discussing wages or benefits with one another.
Although this standard is somewhat complicated, it should provide employers more confidence in their ability to have appropriate policies for their workplaces, including those that have business justifications which outweigh potential adverse impacts on employees’ protected rights.
In addition to the foregoing, on December 12, 2017, the NLRB issued a Request for Information Regarding Representation Election Regulations and in doing so provided employers with hope that the 2014 “quickie election rule” may eventually be a rule of the past.
Hopefully, the holiday gifts from the NLRB continue through the season.
This post was co-authored by Gail E. Farb and Jennifer Fowler-Hermes.
Gail E. Farb