United States: NLRB – The Boeing Company Case Marks A Return To Civility And Common Sense For Workplace Rules

In December of 2017, the National Labor Relations Board (NLRB or the Board) issued its decision in The Boeing Company (Boeing), which overruled Lutheran Heritage Village-Livonia, to establish a new standard for evaluating the validity of employer rules, policies and handbook provisions under the National Labor Relations Act (NLRA or the Act). The 3-2 decision in Boeing, one of a few parting decisions involving Board Member Philip Miscimarra, contains a balancing test which considers the potential impact on NLRB rights of the rule(s) in questions and the employer's reasons for the rule(s).

The issue in Boeing was whether the mere maintenance of a facially neutral policy is unlawful under the Lutheran Heritage "reasonably construe" standard, which is known as prong one of the three-prong standard set in Lutheran Heritage. Under Lutheran Heritage, if a rule does not explicitly restrict activity protected by Section 7 of the NLRA, the violation is dependent upon a showing of one of the following: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. In Boeing, the administrative law judge ruled that the employer maintained a no-camera rule that employees could "reasonably construe" to interfere with the exercise of protected rights in Section 8(a)(1) of the NLRA. In making his findings, the judge disregarded any reason submitted by the company to support such a rule, including that it was required to have such a rule as a contractor to the federal government and for national security reasons.

Upon appeal of Boeing to the Board, the NLRB first noted that the no-camera rule in issue was "facially neutral." It did not explicitly restrict activity protected by Section 7 of the Act; it was not adopted in response to NLRA-protected activity; and it was not applied to restrict such activity. In effect, it did not violate the other standard and prongs set in Lutheran Heritage. So, the only basis for finding such a rule unlawful was due to prong one in the Lutheran Heritage "reasonably construe" test. This prong has been used to challenge the most basic work rules and has created much uncertainty for employers, unions, employees, as well as the Board and various courts.

The Boeing case was intended to overcome several defects inherent with the test set forth in Lutheran Heritage. Knowing these corrective results can help employers fashion the justifications they will need to support any rules, policies or handbook provisions that may get called into question by the Board:

  1. From now on, under Boeing, the Board will not decide if a rule, policy or handbook provision violates NLRA protected rights without taking into account any legitimate justifications associated with the policies, rules or handbook provisions;
  2. Contrary to the impact of the "reasonably construe" test on handbooks, policies and rules, the Boeing test underscores that employees are best served by having employment policies, rules and handbooks, and that perfection in drafting is not always needed.
  3. The Boeing test will permit the Board to recognize that some types of Section 7 activity may lie at the periphery of the NLRA, and it will afford greater protection to Section 7 activities which are central to the Act.
  4. The Boeing test will permit the Board to differentiate, to a sufficient degree, between and among different industries and work settings, and to take into consideration specific events that may warrant a conclusion that particular justifications outweigh a potential future impact on some type of NLRA-protected activity.

The Boeing decision also noted that the prong-one test had invalidated many common-sense rules that most people would expect every employer to maintain. Such rules covered confidentiality, use of logos and trademarks, use of social media, etc., and were held to be unlawful. The Boeing Board stated it did not believe Congress intended the NLRA in 1935 to invalidate rules that require employees to "work harmoniously" or conduct themselves in a "positive and professional manner." Yet, this is exactly what happened in at least one case set in a hospital that had a rule that nurses and doctors should foster "harmonious interactions and relationships."

The new test set by Boeing for evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, requires the NLRB to consider two things: (1) the nature and extent of the potential impact on NLRA rights, and (2) the legitimate justifications associated with the rule. Importantly, the Board added, "We emphasize that the Board will conduct this evaluation, consistent with the Board's 'duty to strike a proper balance between . . . asserted business justifications and the invasion of employee rights in light of the Act and its policy.'"

Boeing also set up three categories of employment rules. Category 1 includes rules that the NLRB designates as lawful to maintain, either because (a) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (b) the potential adverse impact on protected rights is outweighed by justifications associated with the rules. Examples of Category 1 rules are the no-camera rule in Boeing, the "harmonious interactions and relationships" rule mentioned above for a hospital, and other rules requiring employees to abide by basic standards of civility. The Board noted for Category 1 rules that, while their maintenance may be lawful, the application of such rules may violate the NLRA, depending on the facts of each case.

Category 2 includes 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 such conduct is outweighed by legitimate justifications.

Category 3 includes rules that the Board designates as unlawful to maintain because they would prohibit or limit NLRA rights, and the adverse impact is not outweighed by justifications for the rule, such as a rule prohibiting employees from discussing wages or benefits with one another.

These categories represent a classification of results from the Board's application of the new test; however, the categories are not part of the test itself. As the test is applied in future cases, it is expected that the Board will decide what types of additional rules fit into which category, and some rules may need to be moved from one category to another. However, such changes are not expected to occur frequently.

Applying this new test to Boeing, the Board decided that the company lawfully maintained its no-camera rule that prohibited employees from using camera-enabled devices to capture images or video without a valid business purpose and an approved camera permit. The Board's decision reasoned that although the rule potentially impacted the exercise of NLRA rights, the impact was slight and outweighed by important justifications like national security concerns.

Employers already appreciate this and other decisions coming from the current NLRB, as these cases indicate that the 'rule of reason' is coming back to the Board after being stifled for many years under the Obama-era. Now, under Boeing, companies have at least an opportunity to present a "justification" defense to the Board's scrutiny of workplace rules. Where companies can show justifications for their rules that otherwise would have been considered unlawful under the "reasonably construe" test of Lutheran Heritage, such rules now have a fair chance of passing the balancing test set up in Boeing.

This does not mean all rules can be justified. Boeing had some pretty solid reasons for its no-camera rule that most companies may not be able to present to support their rules. Here, the reasons for the rule were objective and were required by outside parties as an obligation. Obviously, the more subjective the reasons, the more scrutiny the Board may give to the rules in question. Additionally, the reasons may not rise to the same level of justification as rules imposed by third parties. So, employers should review their policies, rules and handbook provisions to consider if some of them should be revised or modified to better fit the Boeing test, should the justifications ever need to be presented. At least now the Board will consider these reasons, and that makes the balancing test of Boeing more acceptable and workable for employers and employees.

In Boeing, Board Chairman Philip Miscimarra was joined by Board Members Marvin Kaplan and William Emmanuel in the majority opinion; Members Mark Gaston and Lauren McFerran dissented in the opinion.

Originally published in HR Professionals

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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