NLRB Establishes New Guidance for Employer Workplace Rules

The National Labor Relations Board (“NLRB”) has set new standards for determining whether an employment policy strikes the appropriate balance between employees’ ability to exercise their rights under Section 7 of the National Labor Relations Act (“NLRA”) and an employer’s right to maintain discipline and productivity in the workplace. These standards apply whether or not the employer has union employees.

Summary of New Standards

For more than a decade, the NLRB has analyzed claims of workplace rule violations under the three-part test described in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004). Under this test, the analysis begins with determining whether the workplace rule explicitly restricts activities protected by Section 7. If it does, it is unlawful. If the rule does not explicitly restrict protected activity, the rule is still unlawful if (1) employees would reasonably construe the language to prohibit protected activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. The reasonably construe prong, under which the majority of subsequent cases have rested, has caused confusion for employers and even difficulty for the NLRB to apply consistently.

In The Boeing Company, 365 NLRB 154 (2017), the NLRB acknowledged that the reasonably construe prong was unworkable. Recognizing that the test had unintended implications because it gave no weight to a company’s particular and sometimes complex business needs–in the case of Boeing, a prohibition of camera-enabled devices such as cell phones on company property to maintain security-the NLRB adopted a new standard in its place. Under the new test, the validity of a facially neutral policy will depend on a balancing of (1) the nature and extent of the potential impact on NLRA rights, and (2) legitimate justifications associated with the rule. In implementing this new balancing test, the NLRB sorted workplace rules into three categories:

• Category 1: Rules that are lawful either because (1) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (2) the potential adverse impact on protected rights is outweighed by business justifications associated with the rule. Rules that may fall under this category include civility rules; no-photography and no-recording rules; rules against insubordination, non-cooperation, or on-the-job conduct that adversely affect operations; disruptive behavior rules; rules protecting confidential, proprietary, and customer information or documents; rules against defamation or misrepresentation; rules against using employer logos or intellectual property; rules requiring authorization to speak for the company; and rules banning disloyalty, nepotism, or self-enrichment.
• Category 2: Rules that are not automatically deemed lawful or unlawful. These rules must be evaluated on a case-by-case basis to determine whether they would prohibit or interfere with NLRA rights, and if so, whether the impact is outweighed by legitimate justifications. Rules that may fall under this category include: broad conflict of interest rules; confidentiality rules; civility rules prohibiting disparagement of employers; rules regulating use of the employer’s name; rules generally restricting speaking to the media or third parties; rules banning off-duty conduct that might harm the employer; and rules against making false or inaccurate statements.
• Category 3: Rules designated as unlawful because they prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule. These rules include: confidentiality rules specifically regarding wages, benefits, and working conditions; and rules against joining outside organizations or voting on matters concerning the employer.

Key Takeaways

The new test is meant to provide employers with clarity in implementing workplace rules. However, because the new test is highly fact-specific, its workability is yet to be determined. Employers implementing new workplace rules or updating an employee handbook should assess whether they can survive the new balancing test in light of legitimate business needs.