NLRB Upends Obama-Era Legal Test for Employee Handbook Rules

    The newly Republican-majority National Labor Relations Board (“NLRB” or “Board”) has wasted no time setting aside controversial Obama-era Board decisions. This week’s blog focuses on last week’s decision in The Boeing Company,[1] which concerns the legality of employee handbook rules.  Next week we will discuss the Board’s reversal of the Obama-era rule governing joint employer status.

    During President Obama’s administration, the Board expanded its reach into non-unionized workplaces through its enforcement of employees’ right to engage in protected concerted activities under Section 7 of the National Labor Relations Act (“NLRA”).[2] The Obama Board “invalidated a large number of common-sense rules and requirements that most people would reasonably expect every employer to maintain.”[3] It did so under the test set forth in Lutheran Heritage Village-Livonia,[4] which asked whether employees “would reasonably construe [a policy] to prohibit Section 7 activity.”[5]

    Applying this test, the administrative law judge in The Boeing Company invalidated Boeing’s policy restricting cameras and recording devices Lutheran Heritage test. The Board reversed the judge’s decision and overruled Lutheran Heritage test, reasoning that that test improperly failed to take into account legitimate justifications that may support management policies, rules, and handbook provisions. The Board held that, when evaluating facially-neutral policies, rules and handbook provisions, it must evaluate: (a) the nature and extent of the potential impact on NLRA rights, and (b) legitimate justifications associated with the rule. The Board further stated that it will categorize workplace rules in its future cases, in order to provide clarity and certainty to employers.

    Applying the new test, the Board held that although Boeing’s no-camera rule could in some circumstances impact employees’ engagement in protected concerted activity, the slight adverse impact was outweighed by the substantial security and confidentiality justifications associated with Boeing’s rule.

Practical Takeaway

    The Board’s updated test for employee handbook policies gives employers greater flexibility in implementing social media policies, no-recording or camera rules, or civility policies, where such policies are plainly supported by reasonable business justifications. Employers are cautioned to proceed carefully as the Board begins to decide cases under the new test, and are encouraged to consult with a labor attorney before implementing changes.

[1] The Boeing Company and Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, 365 NLRB No. 154 (Dec. 14, 2017) (“The Boeing Company”).

[2] Section 7 of the NLRA protects the rights of employees to form or join unions, bargain, or otherwise engage in concerted activities for their mutual aid or protection, and also protects the right to refrain from such activities. Section 8(a)(1) of the NLRA makes it an unfair labor practice “to interfere with, restrain, or coerce employees in the exercise of” their Section 7 rights. NLRA § 8(a)(1), 29 U.S.C. § 158(a)(1).

[3] The Boeing Company, 365 NLRB No. 154, slip op. at 2.

[4] Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) (“Lutheran Heritage”).

[5] The Boeing Company, 365 NLRB No. 154, slip op. at 1.

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