Handbooks after Boeing–Reasonableness in the NLRB?
By: James M. Kalny
Regardless of whether a company is unionized it is subject to Section 7 of the National Labor Relations Act (the “Act”) which guarantees employees 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…
Section 8 of the Act makes it an unfair labor practice to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7…”
In Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), the NLRB prohibited employers from putting any rules in their handbooks that could affect Section 7 rights. Over time the NLRB grew the Lutheran Heritage decision to prohibit any work rule that could in any way be conceived to inhibit employees from talking about organizing or razing a concerted defense or concerted complaint about management. Particularly during the Obama administration the pro-labor reasoning of the NLRB, remarkably expanded Lutheran Heritage to strike work rules that had the audacity to require employees to “be respectful to the company, other employees, customers, partners and competitors”; the outrageously evil company directive that employees not make “insulting, embarrassing, hurtful or abusive comments about other company employees online,”; and malicious requirement that employees “avoid the use of offensive, derogatory, or prejudicial comments.”
The recently Trump appointed majority in the NLRB appears to have changed all that. In The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), the NLRB reassessed its standard for when work rules violate Section 8(a)(1) of the Act and implemented a new test:
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.
In short, the NLRB will no longer limit its review of work rules to whether the rule could conceivably interfere with rights to concerted activity. Instead, the NLRB will consider the way the rule might affect those employee rights and, if so, to what degree. More importantly, the NLRB will now consider the reason behind the rule. The Lutheran Heritage rule only considered potential impact on employees. It left a deaf ear to any legitimate management reasons for the rules.
The new NLRB went further and held that in future decisions, three categories of rules will be delineated to provide greater clarity and certainty to employees, employers, and unions.
- 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.
- 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.
As an example of a Category 1 rule, the NLRB referenced rules requiring employees to abide by basic standards of civility. The Board specifically overruled a cases in which the Board held that employers violated the NLRA by maintaining rules requiring employees to foster “harmonious interactions and relationships”.
An example of the Category 3 rule would be a rule that prohibits employees from discussing wages or benefits with one another. Clearly that would directly inhibit the rights of employees to share the information necessary to take concerted activity. No example of a Category 2 rule is provided in the decision.
The NLRB in Boeing supported its decision by explaining:
Opportunity to organize and proper discipline are both essential elements in a balanced society. ‘Since Lutheran Heritage, the Board has far too often failed to give adequate consideration and weight to employer interests in its analysis of work rules.
From a management standpoint Boeing is not only a significant precedent enabling reasonable rule-making, it is a recognition of the exercise of reasonable management prerogative that has long been absent from the NLRB.
For those companies that went through the painful reworking of work rules under the Lutheran Heritage decision, it is time to pull out those rules again and update them to include draconian provisions like directing employees to avoid the use of offensive, derogatory, or prejudicial comments while at work, without the fear of inciting a prohibited practice.
James M. Kalny serves as Chair of Davis|Kuelthau, s.c.’ s Labor & Employment Team and is located in Green Bay. Mr. Kalny provides counsel to public and private sector employers on a wide variety of labor and employment law matters. Mr. Kalny can be reached at email@example.com or 920.431.2223.
This article was published in the September 2018 edition of The Business News.