On October 10, 2019, the National Labor Relations Board issued an important decision in LA Specialty Produce Co., 368 NLRB No. 93 (2019). In its first ruling applying the standard established in The Boeing Co., 365 NLRB No. 154 (2017) for determining the validity of rules, policies and handbook provisions under the National Labor Relations Act (NLRA), the Board majority simplified and curtailed its analysis, and made short work of challenges to rules pertaining to confidential client and vendor lists and responses to media inquiries made on behalf of the employer. The Board concluded both types of rules are categorically lawful.
As previously reported,1 in The Boeing Co., the Board brought an end to its focus on whether specific language used in rules arguably restricts employees’ rights under the NLRA. The Board announced that when reviewing a rule that reasonably interpreted would interfere with the exercise of protected rights, it will balance (i) the nature and extent of the potential impact on employee rights, and (ii) the legitimate justifications associated with the rule. If the justifications for a rule outweigh potential restrictions, it will be found lawful.
The Boeing Co. decision expanded the universe of rules that employers may lawfully maintain by making it possible to justify rules that may chill protected, concerted activities. Importantly, LA Specialty Produce focuses on the initial burden the government faces when challenging a disputed rule. If a rule, reasonably construed, would not restrict employees’ protected activities, the analysis ends there; the rule must be considered valid. The Board emphasized that this test is met only when a “reasonable employee” rather than an NLRA subject matter expert would read a rule to restrict protected activities.
Consequently, the majority held that a rule protecting “any and all information…regarding matters that are confidential and proprietary” to the employer, including “client/vendor lists,” was lawful because it would not reasonably be viewed as a restriction on protected discussions with or about clients or vendors generally. The rule simply applied to protect the employer’s nonpublic proprietary records. Likewise, a general statement prohibiting employees from providing “any information” when approached by the media also was lawful when coupled with the statement that the employer’s president acts as its exclusive designated spokesman. Because the rule as a whole would be construed to mean that employees must not speak on behalf of their employer, it did not restrict protected employee communications at all.
Certainly, restrictions may be found in rules that do not explicitly mention rights protected by the NLRA, but the decision in LA Specialty Produce makes it clear that for the current Board majority, those cases will be few and far between. Reasonable employees, in the majority’s view, simply do not review rules and policies in search of implicit, unintended restrictions on their legal rights. Rather, a reasonable employee interprets work rules “as they apply to the everydayness of his job” considering ordinary, commonplace usage and understanding. The Board’s prior decisions finding implicit restrictions under the NLRA patronized employees and treated them as being “akin to an insecure child, cautious, fearful, vulnerable and easily chilled.”
Lawful rules under The Boeing Co. and LA Specialty Produce need not be expertly crafted to prevent any implication of interference with rights protected by the NLRA. For drafters and reviewers of rules, however, it is important to bear in mind that the same is not true of the application of those same rules. After all, the Board does not require an improper motive to find disciplinary action unlawful, even when it is based on a facially lawful rule. Particularly in the areas of confidentiality and public communications, where the NLRA strongly protects employee rights, well written rules provide guidance to supervisors and others who are responsible for their administration to prevent confusion and avoid unlawful applications.