E-Blasts

The National Labor Relations Board (“NLRB”) continued rolling back anti-employer decisions by overturning its standard for reviewing the legality of employee handbook policies.  The new standard moves towards a balancing test that will take into account the handbook policies’ impact on employee rights and the employer’s reasons for maintaining the policy. 

The old standard, as established in the 2004 Lutheran Heritage case, provided that a policy was illegal if employees could “reasonably construe” the policy to prevent them from exercising their rights under the National Labor Relations Act (“NLRA”), and in particular, their Section 7 “right to self-organization, to form, join, or assist labor organizations, to bargain collectively…and to engage in concerted activities…” This broad standard under Lutheran Heritage led to increased filings and put employers in an impossible situation of being unable to defend themselves by pointing to a legitimate business purpose in creating the policy.

The case in which the NLRB overturned the Lutheran Heritage standard is a good example of the standard’s serious deficiencies.  The case involved Boeing, which designs and manufactures military and commercial aircraft. Boeing had a “no camera policy” which restricted the use of camera-enabled devices at its facilities, including cell phones. Boeing created the “no camera rule” because the work it does is highly sensitive and in some cases classified, and Boeing’s facilities are targets for espionage by competitors, foreign governments, and terrorists.  Despite having valid business reasons for its “no camera rule,” the Administrative Law Judge gave no weight to Boeing’s security concerns and found that the rule unlawful under the Lutheran Heritage standard.

In doing away with the Lutheran Heritage standard, the NLRB explained that the standard was improper because it did not permit any consideration of legitimate justifications that underlie many policies, rules and handbook provisions.  Moving forward, the Board will review a policy by evaluating two things: (1) the nature and extent of the potential impact the policy has on the worker’s NLRA rights, and (2) the legitimate justifications associated the employer’s reasons behind the policy. The Board will then balance those to factors on a case-by-case basis to determine whether there is a sufficient business justification to support the policy.

In applying the new standard to Boeing’s no camera rule, the Board evaluated whether the rule, when reasonably interpreted, would potentially interfere with an employee’s Section 7 rights, and if so: (1) the nature and extent of the no-camera rule’s adverse impact on Section 7 rights, and (2) the legitimate business justifications associated with the no camera rule. The Board said that any adverse effect on the exercise of Section 7 rights was slight in this case where there were substantial and important justifications associated with Boeing’s no-camera rule. Thus, the rule was not illegal.

COUNSEL TO MANAGEMENT:

This ruling brings back the common-sense balancing of an employer’s legitimate business purpose against the concern that a policy could interfere with an employee’s Section 7 rights. Employers that have questions about policies in their employee handbooks or compliance with the NLRA should contact the experts at The Saqui Law Group.

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