Yesterday, December 14, 2017, the National Labor Relations Board issued two decisions particularly important to employers. In the first decision, the NLRB overturned the 2015 decision, Browning-Ferris Industries. In that decision, the Obama-era NLRB decided that indirect control of an employee could constitute a joint-employer relationship. As a result of yesterday’s decision, however, a company is deemed a joint employer only if there is proof that the employer exercised direct control over employment terms of the employee at issue.
Despite the NLRB’s decision yesterday to overturn the 2015 Browning-Ferris Industries decision, Browning-Ferris is still pending as a case at the D.C. Circuit Court of Appeals. Yesterday’s NLRB decision, however, may make the D.C. Circuit Court of Appeals case moot. We will wait and see what the court does.
The other decision involved The Boeing Company and in that decision, the NLRB overruled Lutheran Heritage Village-Livonia, a previous NLRB decision that outlined the NLRB’s standard governing whether facially neutral workplace policies and handbook provisions unlawfully interfered with employees’ rights under the National Labor Relations Act (i.e., protected concerted activity rights). Under that previous decision, the NLRB found that employers violated the NLRA even with workplace policies that did not explicitly prohibit NLRA-protected rights if the rules could be “reasonably construed” by an employee to prohibit the exercise of NLRA-protected rights. It was this standard that resulted in the rewriting or removal of many employers’ handbook provisions.
Yesterday’s decision, however, created a new standard in place of the “reasonably construe” standard. Now, when evaluating a facially neutral policy that when reasonably interpreted would potentially interfere with the exercise of NLRA-protected rights, the NLRB will evaluate (1) the nature and extent of the potential impact on NLRA rights and (2) legitimate justifications associated with the policy.
In addition, the NLRB prospectively announced three categories of rules to provide clarity:
• Category 1: Rules that are designated as lawful because (a) the policy, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA-protected rights or (b) the potential adverse impact on NLRA-protected rights is outweighed by justifications associated with the rule. The prime example here are rules that require employees to abide by basic standards of civility (i.e., positive/harmonious working environment types of policies).
• Category 2: Rules that warrant individualized scrutiny in each case as to whether the rules would prohibit or interfere with NLRA-protected rights, and if so, whether any adverse impact is outweighed by legitimate justifications.
• Category 3: Rules that are designated as unlawful because they would prohibit or limit NLRA-protected activity and the adverse impact is not outweighed by legitimate justifications for the rule. The primes example here is a policy that prohibits employees from discussing wages with one another.
In addition to the new standard and the prospective categories, yesterday’s decision also specifically addressed The Boeing Company’s policy that prohibited employees from using camera-enabled devices to take pictures or record video without a valid business need and an approved camera permit. The NLRB considers such a no-camera rule a Category 1 rule and specifically held that although the rule potentially affected NLRA-protected rights, the adverse impact was minimal and was outweighed by legitimate justifications, such as national security concerns.
What All This Means
First, to avoid a joint employer situation, companies should avoid direct control over the employment terms of any individuals for which they do not wish to be a joint employer.
With respect to policies and handbook provisions, there is now a relaxing of the lawfulness standards and employers can reinstate some policies that previously were removed.
One point of caution, however, regarding the workplace policies decision: In July of this year, the U.S. Court of Appeals for the Fifth Circuit issued a decision interpreting NLRB rules and found the NLRB rule regarding workplace recording to be lawful. As such, that case prohibited blanket prohibitions against audio/video recording in the workplace. Despite the NLRB ruling yesterday, that case is still good law and employers should avoid blanket prohibitions against recording. Furthermore, any pending lawsuits involving NLRB rules should be monitored in the event further decisions are handed down.
What Employers Should Do Now
There is not necessarily anything that you must do now. That said, if you previously removed or relaxed policies and/or handbook provisions and you wish to reinstate them and or strengthen them, you may do so. We encourage you to be careful, however, and remember the standards in place by the NLRB. To the extent you will now have policies that could reasonably be interpreted to prohibit or interfere with NLRA-protected rights, be sure that you have legitimate justifications for the policies and draft the policies such that any adverse impact is minimal.
We encourage you to utilize legal counsel to assist you in these efforts so that you remain in compliance with the current NLRB standards and applicable law.