Labor Board’s Pending Work Rule Change Muddles Employer Strategy

Betty Q. Hixson

The National Labor Relations Board’s reconsideration of its Trump-era legal framework for workplace rules and employee handbooks has put companies in limbo, with management-side lawyers divided on whether businesses should begin retooling policies or wait until the board rules.

Public comments are due Monday on the NLRB potentially scrapping the standard from its 2017 Boeing ruling and replacing it with a more restrictive test for determining if employer policies unlawfully infringe on employees’ rights to work together to improve job conditions. The board likely won’t rule in that case, which involves Stericycle Inc., for several months at the earliest.

“Are we living in a Boeing world or a post-Boeing world?” said John Giovannone, an attorney with CDF Labor Law LLP. “What I can tell you is there’s no uniform approach to an uncertain future.”

The NLRB’s legal framework for work rules has a significant impact in both union and nonunion workplaces. The lawfulness of employer policies on a wide range of issues has been heavily litigated at the board over the past decade, labor lawyers said.

The Trump-era NLRB applied its Boeing standard to bless a range of employer policies, including decisions approving rules on arbitration agreements, social media use, moonlighting, strikes, cell phones, contact with the media, gag orders in disciplinary probes, and on-duty conduct.

But with the Democratic-majority board expected to tighten the standard, some lawyers who advise companies said that it’s not too early to start reassessing policies to avoid being the test case for the application of that new precedent. Others said it would be premature to set new rules before the board announces its new standard.

Some management-side attorneys said companies should regularly review their handbook policies regardless of an impending change in board law, giving more risk-averse firms the opportunity to consider what might replace the Boeing test.

“An employee handbook is like a car,” said Daniel Schudroff, an attorney with Jackson Lewis P.C. “You give a car an oil change to make sure it’s up and running. An employer should do an annual handbook review as preventative maintenance, with an eye towards the future.”

‘Reasonable Reader’

The NLRB’s Boeing decision overturned the part of the NLRB’s 2004 Lutheran Heritage Village-Livonia ruling that said a neutrally worded rule would violate the National Labor Relations Act if employees would “reasonably” read it as restricting their rights under that law.

The Boeing decision said the lawfulness of rules should depend on their impact on employee rights as well as the employers’ legitimate interests for having the rules. The ruling also created categories of rules depending on whether they’re lawful, unlawful, or require “individualized scrutiny” to determine their legality.

The NLRB will likely revert to something at least as restrictive as the Lutheran Heritage ruling’s “reasonable reader” test, according to several management-side lawyers.

“Whether it’s Lutheran Heritage or a different standard, the outcome of the lawfulness of a rule that goes through the analysis will likely be the same,” said Kimberly Harding, an attorney with Nixon Peabody LLP.

Guide from the Past

While a Republican-majority board created the Lutheran Heritage standard, it became more problematic for employers during the later Obama years, said attorneys who advise companies. The general counsel’s office grew more aggressive on handbooks, even as the board’s view of what a worker would reasonably view as chilling their legal rights broadened, they said.

Rulings from that period applying Lutheran Heritage give a rough indication of what the current board majority may find unlawful under its new standard, lawyers said.

For example, the NLRB nixed employer rules that barred posting inaccurate information and making disparaging or false comments on social media; prohibited making false, profane, or malicious statements about the employer or coworkers; and banned participating in off-work activities that hurt the employer’s image or reputation.

The board’s new standard may focus on employee communication beyond what’s in Lutheran Heritage, potentially expanding what worker conduct is covered by federal labor law, said Ginger Schroder of Schroder, Joseph & Associates LLP.

“There could be a stretch of what constitutes protected concerted activity,” Schroder said.

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