Executive Summary: On December 14, 2017, in a 3-2 decision, the National Labor Relations Board (NLRB or Board) overruled the “reasonably construe” standard it established in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), to determine whether a facially neutral rule or handbook policy violates an employee’s Section 7 rights. See The Boeing Company and Society of Professional Engineering Employees in Aerospace, IFTPE Local 2001, Cases 19-CA-090932, 19-CA-090948, and 19-CA-095296.

Lutheran Heritage

In Lutheran Heritage, the NLRB determined that facially neutral handbook policies that employees could “reasonably construe” to prohibit Section 7 activity would be deemed to violate the National Labor Relations Act (NLRA). The NLRB would not take into account any legitimate justifications associated with the policies, rules or handbook provisions.

The Boeing Company

In Boeing, the Board addressed the company’s policy restricting the use of camera-enabled devices such as cell-phones on its property, which was justified by the need to ensure the security of highly sensitive and classified information.

The Board adopted a new standard when evaluating facially neutral policies, rules or handbook provisions (referred to generally as “rules”). If, when reasonably interpreted, the rule would potentially interfere with the exercise of an employee’s Section 7 rights, the NLRB will take a two-pronged approach to determine whether the rule is unlawful. The NLRB will evaluate the nature and extent of the potential impact the rule will have on NLRA rights and the legitimate justification associated with the rule. The Board emphasized that a proper balance must be struck between the asserted business justification and the potential impact on employee rights in light of the NLRA and its policy.

New Categories for Employment Rules

Going forward, the Board will outline three categories of employment rules:

Category 1 includes rules that the Board designates as lawful to maintain because: 1) when reasonably interpreted they do not prohibit or interfere with the exercise of NLRA rights or 2) the potential adverse impact on protected rights is outweighed by the justification associated with the rule. Such rules may include prohibiting the use of threatening and/or abusive language toward other employees.

Category 2 includes rules that require individualized analysis to determine whether the rule would prohibit or interfere with NLRA rights and, if so, whether the adverse impact on NLRA-protected conduct is outweighed by legitimate justifications. In this category the Board may draw distinctions among industries, and parties may be given an opportunity to introduce evidence regarding a particular rule’s impact on protected rights or the work-related justification for the rule.

Category 3 includes rules that the Board will deem unlawful because they prohibit or even limit NLRA-protected conduct, and the adverse impact on the rights of employees is not outweighed by the justifications associated with the rule. Such rules include those prohibiting employees from discussing wages or benefits with one another.

Effect on Employers:

This decision is welcome news for employers. Those with pending handbook or policy cases will get the benefit of this decision, as it will be applied retroactively to all pending cases. Employers can again introduce rules that impose civility in the workplace and rules that are a business necessity, for example, prohibiting cameras or videos in facilities where highly sensitive work is being conducted.