Handbook and Policy Gift from the National Labor Relations Board

Starting the new year with a gift to employers, the National Labor Relations Board (“NLRB”) issued a decision overturning its prior, controversial standard for reviewing employee handbooks and policies.

For a little background, under the National Labor Relations Act (the “Act”), employees have the right to “to engage in…concerted activities for the purpose of…mutual aid or protection,” and it is an unfair labor practice for employers to interfere with such rights. In layman’s terms, this means that even non-union employees have the right to join together to raise grievances and attempt to improve working conditions. This is not controversial.

However, in interpreting this provision of the Act in 2004, the NLRB issued a decision, Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), under which it held that any provision of a handbook or policy that could be “reasonably construed” by employees to restrict their concerted activity rights would be deemed illegal. Thus, even a good-faith employer policy that was not intended to interfere with employee rights could be invalidated if a “reasonable” employee could come to a different conclusion about the policy’s meaning. This general principle led to controversial results when seemingly innocuous statements like “Be respectful to others and the Company,” or something like “Don’t pick fights online” were deemed to violate the Act. Employers became concerned that even the simplest and most common-sense workplace rules could be ruled illegal.

In a welcome turnaround, the NLRB has reversed its prior decision and has implemented a new standard that should allow employers to adopt more common-sense policies for their employees. Specifically, in Boeing Co., 365 NLRB No. 154 (2017), the NLRB has now held that it would focus its review of an employer’s policy on not just the “nature and extent” of the potential impact on employee rights, but also on the legitimate business justifications associated with the policy. In short, rather than solely focus on how an employee could interpret a policy, the NLRB will now consider the employer’s intent and business needs. If the employer’s legitimate needs outweigh the potential impact on employees’ concerted activity rights, the NRLB will uphold the policy.

While the NLRB did not address every type of policy in its decision, it made clear that policies intended to promote professional and harmonious workplaces are more likely to be found legal under its new standard. However, policies that prohibit employees from discussing wages and other work conditions with each other are still prohibited.

This is good news for employers since it will allow for more flexibility in creating and enforcing common-sense workplace polices and rules. If you made significant changes during your last handbook review that you feel have negatively impacted your business, it may be worth revisiting those changes with legal counsel to determine if it makes sense to revert to your prior language or to adopt a new policy.

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