Seyfarth Synopsis: The National Labor Relations Board, pushed out a number of noteworthy decisions early this week. The Board’s holiday rush coincided with the departure of its sole Democratic member, Lauren McFerran, who ended her term on December 16, 2019.
The National Labor Relations Board, pushed out a number of noteworthy decisions last week. The Board’s holiday rush coincided with the departure of its sole Democratic member, Lauren McFerran, who ended her term on December 16, 2019. The end of McFerran’s term was no different. While a number of the decisions issued in the final days of her term were business as usual for the now-exclusively Republican Board, some represented major shifts from precedents set in Obama-era rulings. The move is consistent with the Board’s historical reluctance to overturn precedent without having a member of the minority party involved in the decision or, as McFerran has often done, writing in dissent.
Here are some of the key outcomes employers need to know:
Rules Requiring Confidentiality During Workplace Investigations Are Permissible
On December 16, 2019, the Board issued its decision in Apogee Retail LLC, 368 NLRB No. 144 (2019). Apogee establishes that work place rules requiring confidentiality during investigations are lawful under the National Labor Relations Act. The decision conclusively resolves a long-standing tension between employers’ interests in conducting confidential investigations and employees’ Section 7 rights and reverses an Obama Board ruling that required employers to prove the need for confidentiality on a case-by-case basis. See, Banner Estrella Medical Center, 362 NLRB 1108 (2015) (“Banner Health”).
In Banner Health, the Board held that employers were prohibited from implementing blanket policies requiring confidentiality during ongoing investigations. Instead, employers had the burden of conducting an individualized assessment of each investigation to determine whether the integrity of the investigation would be compromised without confidentiality and whether its interest in preserving the integrity of its investigation outweighed employees’ Section 7 rights.
A 3-1 Republican Board majority overruled Banner Health, explaining that the decision improperly placed the burden of balancing employer and employee interests on the employer. The Board also found that Banner Health’s prohibition on investigative confidentiality rules ran contrary to guidance from the EEOC, which endorses the adoption of blanket rules requiring confidentiality during employer investigations.
The Board went on to conclude that Boeing Company, 365 NLRB No. 154 (2017) laid out the proper framework for analyzing rules involving investigatory confidentiality. Boeing places work rules into three categories based on the impact they may have on workers protected rights under the National Labor Relations Act. Category 1 rules are deemed lawful because they either do not interfere with employee rights, or the employer’s justification for the rule outweighs any adverse impact. Category 2 rules require an individualized assessment to determine the balance of employer and employee interests. Category 3 rules are deemed unlawful, and include those rules where business justifications cannot outweigh the adverse impact employees’ protected rights. Seyfarth wrote on Boeing and its three work rule categories here.
The Apogee decision determined that rules requiring confidentiality during the course of investigations belong in Category 1. As such, these rules are lawful. This means that employers can create and promulgate confidentiality rules that apply to any workplace investigation without running afoul of the NLRA. Confidentiality rules that expand beyond open investigations, however, belong in Category 2. Rules that require confidentiality after an investigation concludes or rules, like the one in Apogee, that are silent as to duration, will still require an individualized assessment to determine their lawfulness.
We also note that Apogee did not invalidate an employer’s obligation to disclose confidential witness statements collected during an investigation to union representatives processing a grievance. Similar to the now defunct Banner Health balancing test, employers seeking to maintain the confidentiality of witness statement have to demonstrate that their interest in confidentiality outweighs the union’s need for information. This disclosure obligation was established in American Baptist Homes of the West d/b/a Piedmont Gardens, 362 NLRB No. 139 (2015) ("Piedmont Gardens"). Piedmont Gardens remains good law, but the Board majority in Apogee indicated it was ready to revisit the decision if raised in a future case. This issue remains one to watch.
Policies Prohibiting Email Use for Non-work Purposes are Permissible for Most Employers
In Caesars Entertainment, 368 NLRB No. 143, issued on December 16, 2019, a Board majority ruled that employers have the right to restrict employees from using work email, and other company communication systems, for non-business related purposes.
In this long-anticipated decision, the Board determined that, with limited exception, employees have no right under the National Labor Relations Act to use employer email and information systems to engage in Section 7 protected communications (i.e. communications regarding wages, hours, working conditions, and union activities). The Caesars decision makes clear that employers have the right to control the use of their equipment and can restrict employees’ use of their equipment for certain purposes, so long as the restrictions are not discriminatory.
Caesars expressly overrules Purple Communications, Inc., 361 NLRB 1050 (2014), a controversial decision, which held that employees had a presumptive right to use company email for Section 7 purposes, and that even facially neutral policies prohibiting non-work-related email use were presumptively unlawful. Seyfarth previously blogged about the battle over Purple Communications and employee use of employer email systems here.
With its rejection of Purple Communications, the Board also reinstated its holding in Register Guard, 351 NLRB 1110 (2007), a pre-Obama Board decision governing employee use of company email. Like Caesar’s, Register Guard recognized that employers have a strong property interest in controlling the use of their email systems. In recognition of this right, employers under Register Guard were allowed, without exception, to implement bans on using work email for non-work purposes. Caesars, however, recognizes an exception to this rule. Under the new rule, employees’ use of company email for Section 7 communications will be protected “in those rare cases where an employer’s email system furnishes the only reasonable means for employees to communicate with one another.”
Although the Caesars decision anticipates that in a “typical workplace” employees will have adequate opportunities to communicate face to face and through other avenues, such as text and social media, the Board declined to discuss head on whether these private means of communication would adequately address the rights of dispersed and remote workers. With employers’ use of remote workers on the rise, the Caesars exception is sure to be tested.
Employers Can Stop Collecting Union Dues Once a CBA Expires
In yet another 3-1 ruling, the Board restored employers’ rights to stop collecting and remitting union dues after a collective bargaining agreement with a dues check off arrangement expires. Valley Hospital Medical Center, 368 NLRB No. 139 (2019), overruled the Obama Board’s decision in Lincoln Lutheran of Racine, 362 NLRB 1655 (2015), which held that employers had a statutory obligation to continue checking off union dues after the expiration of a collective bargaining agreement.
By overruling Lincoln Lutheran, the Board returned to its prior, longstanding rule established by Bethlehem Steel, 136 NLRB 1500 (1962). Like in Bethlehem Steel, the Board in Valley Hospital held that dues check off provisions fall within the “limited category of mandatory bargaining subjects that are exclusively created by contract.” As such, these provisions are only enforceable for the duration of the contract and an employer has no obligation under the Act to continue dues checkoff once a contract expires.
This shift back to established law will likely create an additional incentive for unions to agree to reasonable employer terms during negotiations prior to a contract’s expiration.
This recent slew of cases signals that Employers can likely expect even more management-friendly decisions in the year to come. But, Employers should bear in mind that the Board’s rulings are almost always subject to change with the political tide. While these rules are likely to remain in place for now, their longevity—like the longevity of the rules they replaced—may depend on the results of next year’s election.