On December 14, the National Labor Relations Board (NLRB) issued two decisions that (1) provide clarity to employers grappling with wording employment policies without running afoul of the National Labor Relations Act (NLRA), and (2) reject the joint employer standard established only two years ago in Browning-Ferris.
Boeing Decision Overturns Employee Handbook Precedent
Since 2004, the accepted, albeit murky, precedent has been that an employment policy violates the NLRA if it could reasonably be construed to bar employees from exercising their rights under the Act. Many employers, union and non-union alike, have become painfully aware of the nuances in wording found acceptable by the NLRB and have struggled to apply the “reasonably construe” standard in a practical way. In the Boeing decision, the NLRB overturned this precedent and acknowledged the confusion that the previous standard had caused, as well as its failure to give due credence to the “real-world ‘complexities’ associated with many employment policies, work rules and handbook provisions.” The Boeing Company and Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, 365 NLRB No. 154 (Dec. 14, 2017).
Establishing a new standard, the NLRB declared that it will evaluate facially neutral policies by assessing (1) the nature and extent of the potential impact of any such policy on NLRA rights, and (2) legitimate justifications associated with the rule. Applying this new standard, the NLRB ruled that The Boeing Company’s policy, which prohibited camera-enabled devices to capture images or video without a valid business need and approved camera permit, was lawful. In addition to the no-camera policy at issue, the NLRB explicitly stated that rules requiring employees to abide by basic civility standards are part of a category of rules designated as lawful (overturning earlier case finding that requiring “harmonious interactions and relationships” violated the NLRA). Taken together, the new standards also expand protection for confidentiality and trade secret policies and allow for companies to have some control over social media campaigns by current employees.
Joint Employer Standard Restored to Pre-Browning-Ferris
In the wake of the 2015 Browning-Ferris Industries decision, 362 NLRB No. 186 (2015), employers were left attempting to apply a broad and ambiguous “direct or indirect” control test to determine potential liability as a joint employer. In addition to its challenging application, this decision was considered by many to be responsible for stifling certain industries, such as staffing agencies and businesses that rely on a franchisor-franchisee relationship. In the recent Hy-Brand decision, although the NLRB ultimately found the two construction companies at issue to be joint employers, it ruled that the Browning-Ferris test exceeded the Board’s statutory authority and returned to the previous “direct control” test. Hy-Brand Industrial Contractors, Ltd. And Brandt Construction Co., 365 NLRB No. 156 (Dec. 14, 2017). To be deemed a joint employer under this restored standard, there must be evidence that an entity exercised control over the essential employment terms of another entity’s employees, “directly and immediately” in a manner that is not limited and routine. While there is still the potential for joint employer liability, businesses are likely to have more latitude under the Hy-Brand standard and may want to reevaluate or consider entering into business relationships they would have previously avoided.
In total, these two decisions overturn several years of challenging standards for employers, and the new rulings should make it easier for companies to comply with the NLRA going forward.