Twas eleven days before Christmas, when all through the land, the National Labor Relations Board (NLRB) announced it was taking a stand. What came as welcome news just two weeks ago, appears to be a mere preview to a really great show. As children wrote letters to Santa full of holiday wishes, the new NLRB General Counsel released a list nothing short of ambitious.
The General Counsel’s “wish list” referenced above was released on December 1, 2017 in a memorandum to all regional directors. However, instead of asking for the newest tablet, state-of the-art phone, scooter, or doll, his list included, among other things, a mandatory advice submissions list requiring certain significant legal issues be submitted for review. Included in this list were cases that: (1) over the last eight years, overruled precedent and involved one or more dissents; (2) have not been decided by the NLRB previously; and (3) involve other issues that would be important to the General Counsel. NLRB decisions in cases referenced in the memorandum resulted in uncertainty for employers over the last several years.
Just two weeks later, on December 14, 2017, the NLRB announced two new decisions related to issues referenced in the General Counsel’s memorandum. The first, Hybrand Industrial Contractors, Ltd. et al., overturns the NLRB’s 2015 decision in Browning-Ferris, by restoring a joint employer standard based on an employer’s exercise of control. Specifically, the decision provides that two or more entities are joint employers if there is proof that an entity exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately in a manner that is not limited and routine. If an entity merely has indirect control, contractually reserved control that it has never exercised, or limited and routine control, then that is not sufficient to establish a joint employer relationship. This standard applies to all future and pending cases.
The second case, The Boeing Company and Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, creates a new test that overturns the previous standard for analyzing whether facially neutral workplace rules, policies, or handbook provisions (rules) violate National Labor Relations Act (NLRA) protections. The new test considers: (1) the nature and extent of the rules’ potential impact on NLRA rights; and (2) legitimate justifications associated with the rule. Additionally, the NLRB provided a roadmap for employers to implement policies, rules, or handbook provisions that align with NLRA protections:
- Category 1 are rules that are lawful to maintain because when reasonably interpreted they do not prohibit (or interfere with) NLRA rights, or their potential adverse impact on NLRA protected rights is outweighed by justifications associated with the rules.
- Category 2 are rules requiring case-by-case analysis to determine whether they would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.
- Category 3 are rules that are unlawful to maintain 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. For example, a rule that prohibits employees from discussing wages or benefits with one another.
The Boeing no camera case was an example of a Category 1 rule. Boeing implemented a policy that restricts the use of camera-enabled devices (no camera rule) on its property due to the highly-sensitive sometimes classified work done on site. Boeing’s policy was intended to protect both business and national security interests; however, the policy was challenged as a violation of Section 7 of the NLRA using a former standard or test known as the Lutheran Heritage “reasonably construe” standard.
As the NLRB notes, the “reasonably construe” standard often resulted in decisions where business policies or rules with legitimate justifications unrelated to NLRA rights were found unlawful and provided an inflexible approach to analyzing similar cases. In applying its new test, the NLRB determined that Boeing’s no camera rule was lawful because any impact it may have had on an employee’s exercise of NLRA rights was outweighed by important justifications such as national security.
Given the directives in the General Counsel’s memorandum, we can expect that the NLRB’s early gift to employers in these two decisions is just the beginning. Employers now have specific guidance to help them analyze their employee rules, policies and handbooks using the NLRBs roadmap in the Boeing no camera case. Additionally, employers who don’t exercise sufficient control over another entity’s employees may no longer be held responsible for the other employer’s workplace protection violations. Both are welcome news for employers.
ThinkHR encourages employers to work with their employment counsel to evaluate the impact of these decisions on their business or business practices. In the meantime, ThinkHR will continue to monitor NLRB decisions and provide updates.