With a new Administration, comes a new approach on how labor law should be enforced. The National Labor Relations General Counsel Jennifer Abruzzo released General Counsel Memorandum 21-04 “Mandatory Submissions to Advice” on August 12, 2021. Abruzzo’s Memo indicates changes to come with respect to evaluating whether an employer rule violates employees’ Section 7 rights.
Abruzzo’s Memo emphasized how certain doctrinal shifts from the previous Administration overruled many legal precedents which “struck an appropriate balance between the rights of workers and the obligations of unions and employers.” Abruzzo identified “Employer Handbook Rules” as an area where the previous Board “overruled legal precedent.” The Memo specifically identified decisions in The Boeing Co., 365 NLRB No. 154 (2017) and L.A. Specialty Produce Co., 368 NLRB No. 93 (2019). Abruzzo’s Memo suggested a return to prior legal standards in the area of employee handbooks driven by cases across the country, day to day investigations, and prosecutions by the NLRB.
Section 7 of the National Labor Relations Act (the Act) guarantees employees "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection," as well as the right "to refrain from any or all such activities." Section 8(a)(1) of the Act makes it an unfair labor practice for an employer "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7" of the Act.
In The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), the Board reversed Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) and adopted a three category approach to evaluating workplace rules. Category 1 provides that rules are lawful to maintain when “(i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.” Category 2 “include[s] rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights.” Category 3 rules are unlawful “because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.”
The Boeing test had the impact of narrowing the types of policies that would be considered to violate Section 7 rights. On October 10, 2019, the Board issued a decision in LA Specialty Produce Company wherein the Board applied the Boeing standard and categorized two specific types of policies regarding confidentiality/non-disclosure and media contact as lawful. These policies were frequently scrutinized and found to violate employees’ Section 7 rights under the previous presidential Administration.
Under the previous Lutheran Heritage Village test, the mere maintenance of a neutral policy violated Section 8(a)(1) of the Act if employees would reasonably construe the rule to prohibit union and other protected activity. The Board decided whether an employer’s rule violated § 8(a)(1), by first considering whether the rule would reasonably tend to chill employees in the exercise of their statutory rights. Guardsmark v. NLRB, 475 F.3d 369, 374 (D.C. Cir. 2007) (citations and internal quotation marks omitted). In order to answer that question, the Board determined whether the rule restricted § 7 activity explicitly. If not, the Board proceeded to the next step and asked whether the rule (1) could be reasonably construed by employees to restrict § 7 activity, (2) was adopted in response to such activity, or (3) has been used to restrict such activity. Id. An affirmative answer to any of these inquiries meant that the employer could retain the rule only by showing an adequate justification. As a result, rules that were ambiguous as to their application to Section 7 activity and did not contain limiting language or context that would clarify to employees that the rule did not restrict Section 7 rights were found unlawful. Particular policies related to confidentiality; employee conduct; company logos, copyrights, and trademarks; photography and recording; leaving work and conflict of interest were generally disfavored under the Lutheran standard (GC Memorandum 15-04).
The new Administration’s initiatives signal a less-employer friendly interpretation of workplace rules. Employers should expect the NLRB to assert jurisdiction over a broad scope of private sector workplaces as well as issues which many have considered outside the typical scope of labor law. Nonunion employers especially should recognize the change in administration and new NLRB initiatives stands to impact their workforce as rules and policies are implemented and updated. Even the mere phrasing of policy language, without an ascertainable victim, may be viewed as unlawful intrusion onto employee rights. As a result, employers should stay tuned and include labor counsel when adopting or updating policies.