The new Republican-led National Labor Relations Board (NLRB) has wasted little time in reconsidering decisions made during the Obama Administration. In its Boeing, Inc., decision, announced on Thursday, Dec. 14, 2017, the board overturned its Lutheran Heritage Village-Livonia decision that has guided its evaluation of employee handbook policies for the past 13 years and most recently has come under intense criticism from the employer community for chipping away at common employee handbook policies.
During the past eight years, the Obama era board had used Lutheran Heritage to find seemingly innocuous employment policies that, for instance, instructed employees to “work harmoniously” together or to or conduct themselves in a “positive and professional manner” to be unlawful because those policies could be “reasonably construed” by employees to prohibit them from engaging in protected concerted activity. In Boeing, the board has created a new standard for evaluating such policies that, it says, balances (i) the nature and extent of any potential impact on employee NLRA rights and (ii) legitimate employer justifications associated with the rule. The Board majority stated that this test was designed to foster more clarity and certainty for all concerned and to eliminate the arbitrary results obtained through the “reasonably construe” standard.
The board announced three categories of cases that will present employment policies requiring it to engage in such balancing.
- 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.
Based on its new standard for reviewing employment policies, the board upheld Boeing’s policy that restricted the use of camera-enabled devices such as cell phones on its property. In reaching the conclusion that Boeing’s no-camera rule was lawful, the board relied on undisputed evidence that the policy is an integral component of its security protocols, which are necessary to maintain Boeing’s accreditation as a federal contractor to perform classified work for the United States Government. Second, the board found that Boeing’s no-camera rule plays a key role in ensuring that it complies with its federally mandated duty to prevent the disclosure of export-controlled information or the exposure of export-controlled materials to unauthorized persons. The board also concluded that Boeing’s no-camera rule helps prevent the disclosure of Boeing’s proprietary and employee personally identifiable information. And finally, the board concluded that the no-camera rule limits the risk of Boeing becoming a target of terrorist attack. With all of these employer justifications weighing in favor of the no-camera policy, the Board majority had little difficulty concluding that Boeing’s policy was lawful.
While employers undoubtedly are celebrating the board’s new standard for evaluating handbook policies, they must understand that the board still will undertake a case by case analysis of the lawfulness of such policies. The balancing test worked in Boeing’s favor because of the nature of its business as an airplane manufacturer; it may not weigh in favor of other more restrictive no-camera policies or in other industries where national security concerns are not implicated. In addition, the balancing test identified in Boeing addresses only employer concerns raised by the first (and admittedly most problematic) part of the Lutheran Heritage standard, but not the second and third parts. Thus, the board still can be expected to give serious scrutiny to and potentially invalidate policies that were adopted in response to union activity and those that actually are applied in a manner to restrict employee rights under the NLRA.