As is often the case when a Board Member’s term winds down, this week has seen a flurry of activity. Back in May, when nominations to seat a full Board were still just being rumored, we identified a handful of the more extreme and overreaching decisions of the Obama Board certain to find themselves in the cross-hairs. With decisions issued yesterday, the Board has knocked two of the bigger items off that list – one of which is the overruling of the Lutheran Heritage Village-Livonia standard by the decision in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017). In Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), the Board announced the standard for determining whether the mere maintenance of a facially neutral work rule might still be found to violate the National Labor Relations Act because “employees would reasonably construe the language to prohibit Section 7 activity.” Since then, however, the Board repeatedly ignored context, and completely disregarded employer explanations unrelated to union activity, to cite this decision as support to outlaw historically common work rules such as rules:
Boeing is a prominent government contractor and manufacturer of military and commercial aircraft at numerous production facilities throughout the United States. Because it is a prime target for unfair competition, industrial and national security espionage, and other security and safety risks, the company has maintained a blanket ban on use of camera-enabled devices such as smart-phones on its premises. That rule [PRO 2783] read, in part:
Possession of the following camera-enabled devices is permitted on all company property and locations except as restricted by government regulation, contract requirements or by increased local security requirements.However, use of these devices to capture images or video is prohibited without a valid business need and an approved Camera Permit that has been reviewed and approved by Security: [list of devices omitted]. Id. [Emphasis in original.]
The Administrative Law Judge, relying primarily on Lutheran Heritage, placed the burden entirely on the employer and discounted the context, declaring the rule unlawful:
I find that Respondent’s facially overly broad and ambiguous rule PRO 2783 would reasonably tend to chill employees in the exercise of their Section 7 rights and that an employee would reasonably construe the language to prohibit Section 7 activity.
The Board majority, however, has set forth a detailed critique of the historical application of Lutheran Heritage, asserting that it has disregarded legitimate employer interests, elevated the need for impossible linguistic precision, ignored varying industrial realities, and ultimately failed to provide predictable results. In explaining these findings, the decision highlights one of the most serious traps the expanding standard had set for employers:
The Lutheran Heritage standard, especially as applied in recent years, reflects several false premises that are contrary to our statute, the most important of which is a misguided belief that unless employers correctly anticipate and carve out every possible overlap with NLRA coverage, employees are best served by not having employment policies, rules and handbooks.
Accordingly, the Board announced a new standard thus:
In cases in which one or more facially neutral policies, rules, or handbook provisions are at issue that, when reasonably interpreted, would potentially interfere with Section 7 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 requirement(s). Again, we emphasize that the Board will conduct this evaluation, consistent with the Board’s “duty to strike the proper balance between…asserted business justifications and the invasion of employee rights in light of the Act and its policy.”
In this case, the Board considered the employer’s justifications – the rule’s role in maintaining federal contractor accreditation and compliance with federal “export control” information disclosure regulations; protection of proprietary information; and other security and privacy concerns – and weighed them against the lack of evidence that the rule had actually interfered with any Section 7 activity. On balance, the Board held the “no-camera” rule is lawful.
Members Pearce and McFerran – Democrat appointees – each filed a dissent, criticizing the majority for overturning precedent without seeking input from a broader universe of “stakeholders in industry and labor”; asserting that the newly announced standard is actually more complex than Lutheran Heritage; and, expressly defending the old standard’s protection of vulgar and disrespectful conduct by employees.
Going forward, employers should ensure that policy statements and work rules remain facially neutral and that they may assure employees that they do not interfere with their Section 7 rights. Moreover, in drafting policy language, employers should still attempt to narrowly tailor prohibitions to well-defined legitimate employer interests. Finally, they should follow the Board’s application of this new standard to varying facts and circumstances, to try to discern the emerging patterns, as the Board itself indicates in the Boeing decision that it will categorize its future decisions into three categories: (1) rules which are lawful to maintain because they are not reasonably read to interfere with Section 7 rights, or potential impact is so slight as to be outweighed; (2) rules which require individualized scrutiny to determine if they would interfere, or whether such interference might be outweighed by the justification; and (3) rules which are unlawful because interference is not outweighed by justifications.