The National Labor Relations Board (“NLRB”) has adopted a new, more employer-friendly standard for evaluating the legality of employment policies, rules, and handbook provisions. In doing so, the NLRB overturned its 2004 decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004). The new standard aims to take a “real world” view of handbook provisions, scrapping Lutheran Heritage’s focus on simply whether rules could be “reasonably construed” by employees to prohibit the exercise of NLRA rights. The new standard instead focuses on the “nature and extent” of a contested rule’s “potential impact” on employees’ rights under the National Labor Relations Act ("NLRA") and its “legitimate justifications.”
In recent years, the NLRB has taken a highly aggressive position against many commonly utilized employee handbook policies. Unbeknownst to many employers, the NLRA's prohibition against unfair labor practices also extends to non-union employers. The NLRB previously alleged that overbroad employment policies could have a chilling effect on employees’ concerted activities protected by Section 7 of the NLRA. Generally speaking, there is protected concerted activity when two or more employees act together to improve their terms and conditions of employment. Employees have a right to advocate in this manner even where there is no union involved.
However, on December 14, 2017, the NLRB issued its decision in The Boeing Company, 365 NLRB 154 (2017). The decision centered on a handbook provision prohibiting the use of cameras to capture images or videos on Boeing property. The provision was facially neutral: it did not expressly restrict Section 7 activity, was not adopted in response to NLRA-protected activity, and had not been applied to restrict NLRA-protected activity. The purposes of the policy included preventing disclosure of confidential and proprietary information, limiting the risk of release of employees’ personally identifiable information, and maintaining security protocol necessary to keep federal contractor accreditation.
Reversing an administrative law judge’s finding that Boeing’s no-camera rule violated the NLRA, the NLRB expressly overruled Lutheran Heritage. Among other reasons for its decision, the majority explained that Lutheran Heritage’s “reasonably construe” standard does not permit any consideration of the legitimate justifications underlying many policies, rules, and handbook provisions. The majority also explained that the “reasonably construe” standard, which narrowly examines a disputed rule’s language for its potential to interfere with Section 7 rights, cannot be reconciled with other NLRB decisions that explicitly balance employees’ Section 7 rights against legitimate employer interests. According to the majority, Lutheran Heritage does not allow sufficient consideration of the unique characteristics of particular work settings and different industries.
The NLRB replaced Lutheran Heritage’s “reasonably construe” standard with a standard that strives to bring predictability and clarity to employers and employees. Under the new standard, where a facially-neutral policy, rule, or handbook provision can be reasonably viewed as potentially interfering with Section 7 rights, the NLRB will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) the employer’s legitimate justifications for the policy, rule, or provision.
The results of this analysis will then be used to place the particular policy, rule, or provision into one of three categories. The first category includes all policies, rules, or provisions that are legal in all cases because, when reasonably interpreted, they do not prohibit or interfere with employees’ rights or because any interference is outweighed by the employer’s legitimate justifications. The second category includes all policies, rules, or provisions that warrant individualized review on a case-by-case basis because they may or may not be considered legal depending on their application. The third category includes all policies, rules, or provisions which are illegal in all cases because they prohibit or interfere with employees’ rights in a manner not outweighed by the employer’s justifications.
Going forward, Boeing Company makes clear that finding a facially-neutral policy, rule, or provision, when reasonably interpreted, potentially interferes with Section 7 rights is no longer dispositive. Rather, the NLRB will evaluate the nature and extent of the potential impact with employers’ legitimate justifications for the rule or provision. As compared to the “reasonably construe” standard, the NLRB's new approach should afford employers greater leeway in promulgating and applying facially-neutral policies, rules, and provisions.