Whenever the White House switches from one party to the other, there are risks because new appointments to the National Labor Relations Board (NLRB) mean changes will occur in how it interprets and enforces the National Labor Relations Act (Act). Based on a recently issued notice and invitation to file briefs, all signs indicate we’ll soon see changes in the standard the Board uses to determine whether work rules interfere with employee rights under the Act.
Since December 2017, the NLRB’s standard to determine whether facially neutral employer work rules violate the NLRA considers (1) the policy’s potential impact on protected concerted activity and (2) the employer’s legitimate business justifications for maintaining it. Under the standard, if the justifications for the rule outweigh its potential impact on employee rights, then the rule is considered lawful. If, on the other hand, the potential impact on employee rights outweighs the justifications for the rule, then it’s unlawful.
In one case where the NLRB applied the current standard, the employer had a work rule restricting the use of camera-enabled devices such as cell phones. Using the devices to capture images or video was prohibited without a valid business purpose and a camera permit reviewed and approved by the company’s security department. “Business purpose” was defined as a “determination made by the authorizing manager that images or videos are needed for a contractual requirement, training, technical manuals, advertising, technical analysis, or other purposes that provided positive benefit to the company.”
Applying the standard, the NLRB determined the employer’s camera use rule may potentially affect the exercise of NLRA Section 7 rights but that the potential adverse impact was comparatively slight. The Board also found the employer’s justification for the rule (i.e., protecting information implicating national security, proprietary trade secrets, and employee personal information) outweighed the potential impact on employee rights. In gauging the potential impact on protected concerted activity, the current standard is to look at the rule from the standpoint of an objectively reasonable employee.
It has been increasingly difficult for employers and attorneys to write work rules, policies, and handbook provisions to control employee behavior. The rules or policies are routinely attacked on the grounds they interfere with Section 7 rights guaranteed to employees under the NLRA. For the last four years, employers have at least known what standard will be applied to the rules when they’re challenged. Even then, the outcome of applying the standard to the challenged rule has been very difficult to predict.
Currently, the NLRB sorts employer rules into three categories:
- Category 1: Rules the NLRB designates as “lawful to maintain” either because (1) the policy, when reasonably interpreted, doesn’t prohibit or interfere with the exercise of Section 7 rights or (2) the potential adverse impact on protected rights is outweighed by justifications for the measure;
- Category 2: Rules requiring individualized scrutiny in each case to determine whether the standard would prohibit or interfere with Section 7 rights and, if so, whether any adverse impact is outweighed by legitimate justifications; and
- Category 3: Rules the NLRB has determined are unlawful to maintain because (1) they either prohibit or limit Section 7 rights, and (2) the adverse impact on Section 7 rights isn’t outweighed by the justifications.
Recent Case Triggers NLRB to Ask 3 Questions
The issue of whether facially neutral work rules interfere with Section 7 rights recently came before the NLRB in Stericycle, Inc. In the case, the employer had work rules addressing “personal conduct,” “conflicts of interest,” and “confidentiality of harassment complaints.” The administrative law judge (ALJ) applied the current standards we have described above when considering whether maintaining the rules was unlawful.
Specifically, the ALJ found the personal conduct policy and the conflict-of-interest policy (both of which prohibited conduct or conflicts affecting the company’s reputation or integrity) infringed on employees’ Section 7 rights, and no business justification would outweigh the infringement. As for the policy on the confidentiality of harassment complaints, the judge again determined it interfered with Section 7 rights, and there was no legitimate business justification. Stericycle, Inc., 371 NLRB No. 48 (2022).
Both the general counsel and the employer filed exceptions to the ALJ’s supplemental decision. In response to the exceptions, the NLRB has decided to invite briefs to consider whether it should adopt a new legal standard to apply in cases when the maintenance of a facially neutral work rule allegedly violates Section 8(a)(1) of the NLRA. Specifically, the Board has asked parties filing briefs to address the following questions:
- Should the NLRB continue to adhere to the current standard?
- In what respects, if any, should the Board modify existing law addressing the maintenance of employer work rules?
- Should the Board continue to hold that certain categories of work standards, such as investigation confidentiality rules, nondisparagement polices, and rules prohibiting outside employment, are always lawful to maintain?
The fact that the NLRB has invited briefs foreshadows a change in the current standard being applied to facially neutral work rules and policies. Consequently, you would be hard-pressed to rely on the current state of the law when evaluating work rules and policies. After all, if the Board’s approach to the policies changes, the law will likely be different when those cases are heard than what currently exists. It’s also concerning that specific rules the Board has determined are lawful to maintain may now become invalidated in the future.
Once again, employers are going to be subjected to the political whims of the NLRB’s makeup. Although nobody can specifically predict the future, so far the cards on the table suggest many workplace rules and policies that pass legal muster today could be found unlawful tomorrow.
This article, slightly modified to note recent updates, was featured online in the Wisconsin Employment Law Letter and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.