If you are a non-union business, odds are you don’t pay much attention to National Labor Relation Board (NLRB) decisions. But ignoring the NLRB can be costly, even for non-union businesses. In the past few years many of these decisions have impacted non-union businesses just as much as they have impacted union businesses. Most of those rulings were significate and created a large burden on employers – forcing them to update Employee Handbooks and company policies to comply with new NLRB tests and standards.
Recently two NLRB rulings have started to reverse this trend. These rulings have gone far to ease the burdens placed on businesses triggered by past NLRB decisions.
The Boeing Company Ruling:
A New NLRB Standard for Reviewing Handbooks and Employment Policies
Previously, the NLRB test regarding policies and their application on restricted protected activities was: even if a rule did not explicitly restrict protected activity, it still violated the National Labor Relations Act if: “(1) employees would reasonably construe the language to prohibit Section 7 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.” Lutheran Heritage, 343 NLRB 646, 646-47 (2004) (emphasis added). That test, as interpreted by the prior NLRB, led to numerous decisions where the Board “had invalidated a large number of common-sense rules and requirements that most people would reasonably expect every employer to maintain.”
On December 14, 2017, the NLRB reversed this test in its ruling on The Boeing Company case. (https://www.nlrb.gov/case/19-CA-090932).
In The Boeing Company case, the NLRB expressly overruled the “reasonably construe” standard and developed a new test. Under the new test, to evaluate a workplace rule, policy, or handbook provision that may be reasonably interpreted to potentially interfere with NLRA rights, “the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.” Id. at 3 (emphasis added). This standard allows the NLRB to strike a more equitable balance between employees’ rights under the NLRA and employers’ business justifications for their policies. This new standard will be applied retroactively to all pending cases.
The Board delineated three categories of employment policies, rules and handbook provisions that will result from this test:
- Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA
rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.
- Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule, when reasonably interpreted, would prohibit or interfere with the exercise of NLRA rights, and if so, whether any adverse impact on NLRA protected conduct is outweighed by legitimate justifications.
- Category 3 will include rules that the Board will designate as 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. An example would be a rule that prohibits employees from discussing wages or benefits with one another.
The categories are not part of the test it-self. The Board will determine, in future cases, what types of additional rules fall into which category. The Board stated that “Although the legality of some rules will turn on the particular facts in a given case, we believe adherence to the analysis we announce here will ultimately provide far greater clarity and certainty to employees, employers and unions regarding whether and to what extent different types of rules may lawfully
be maintained.”
Hy-Brand Industrial Contractors, Ltd Ruling:
NLRB Reversal of the Joint-Employment Test
On the same day, the NLRB also eliminated the expansive joint employment test decided in the 2015 Browning-Ferris decision. In Browning-Ferris, the NLRB expanded the joint employer test by determining that even when two entities have never exercised joint control over essential terms and conditions of employment, and even when any joint control is not “direct and immediate,” the two entities still will be joint employers based on the mere existence of “reserved” joint control, or based on indirect control or control that is “limited and routine.”
On December 14, 2017, the NLRB returned to its prior standard for determining joint employer status in the Hy-Brand Industrial Contractors, Ltd. (https://www.nlrb.gov/case/25-CA-163189) case.
In Hy-Brand, the NLRB overturned Browning Ferris, indicating it “is “a distortion of common law,” “contrary to the Act,” “ill-advised as a matter of policy,” and “prevent[s] the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations.”
The NLRB “new” standard is to return to its prior standard. The Board held that, “a finding of joint-employer status requires proof that the alleged joint-employer entities have actually exercised joint control over essential employment terms (rather than merely having “reserved” the right to exercise control), the control must be “direct and immediate” (rather than indirect), and joint-employer status will not result from control that is “limited and routine.”
This “new” standard will be applied retroactively to all pending cases.
Conclusion:
Even non-union business should pay close attention to National Labor Relation Board (NLRB) decisions. While these two NLRB rulings have started to reverse this trend, many other NLRB rulings still exist that create a burden on employers. As new rulings are made, make sure you are confident your employment policies are in compliance with the NLRB tests and standards that impact your business.
Should you have any questions about how these new National Labor Relation Board rulings, and other National Labor Relation Board rulings could impact your businesses, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.
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