Labor Board Position on Employer Rules May Shift Very Soon

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By Lawrence E. Dubé

The National Labor Relations Board could soon make a major change in how it determines when employer handbooks, rules, and policies overstep the labor rights of their employees.

Chairman Philip A. Miscimarra (R) has argued in a series of dissenting opinions that the board should shift from its traditional focus on employees’ possible misunderstanding of rules to a more detailed balancing of the rights and interests of both employees and employers. And soon, the chairman will be working with a Republican board majority.

If the board adopts Miscimarra’s balancing test, the NLRB’s analysis may become more transparent and employers, employees, and unions may have a better idea what the board requires for an employer rule to pass legal muster, although there will still be disagreement about particular rules and policies.

There’s “absolutely no question” that the board should change course on its treatment of employer rules, according to former NLRB member Brian E. Hayes. The board has spent substantial resources on a “completely non-useful means of analysis,” he told Bloomberg BNA. Hayes now represents employers as a shareholder at Ogletree, Deakins, Nash, Smoak & Stewart P.C. in Washington.

But Seth Goldstein, senior business representative for Office and Professional Employees International Union Local 153 in New York and a lawyer, said the NLRB’s current practice allows fair consideration of employer rights. Adopting Miscimarra’s proposed test would be “terrible” for employees, he said.

New Majority Could Act Quickly

A Republican majority on the NLRB will soon be in position to outvote Democrats Mark Gaston Pearce and Lauren McFerran, who have supported the board’s traditional analysis, which has been in use since 2004.

Republican Marvin E. Kaplan was recently confirmed as a board member, and William J. Emanuel, a veteran management practitioner from Littler Mendelson P.C., is expected to win confirmation when the Senate returns from its August recess.

Hayes said the pace of Senate confirmations has been slow but that he expects Emanuel to be confirmed and sworn in by about the end of September, giving Republicans a 3-2 majority on the board.

Miscimarra is leaving the NLRB when his term ends in December, but that still could be enough time to find an appropriate case and issue an order changing the board’s test on the issue.

If the new board majority finds an appropriate case on its docket, Hayes said, it “certainly is possible” that in the 11 weeks from September to the end of Miscimarra’s term, the chairman and his new colleagues could draft, circulate, and issue a board order changing the board’s test on employment rules and policies.

Among the cases already teed up for the board is one in which Verizon is appealing the ruling of an administrative law judge that it maintained unlawful rules on employee recordings, solicitations, outside activities, and other subjects.

The company has challenged the ALJ’s findings on the individual rule violations but also argues the NLRB should abandon its traditional approach to employee rules and “adopt the standards articulated in Chairman Miscimarra’s dissents.”

Lutheran Heritage at Center of Debate

The current test for workplaces rules goes back to 2004, when the board held in Lutheran Heritage Village-Livonia that it would consider a rule unlawful if it explicitly restricts the rights of employees under the National Labor Relations Act, including rights to engage in union activity, group complaints, or protests.

An employer rule also can be held unlawful if an employer adopts it in response to union activity or uses the rule to restrict employee rights.

Perhaps most importantly, the Lutheran Heritage board said a rule that appears legitimate on its face will be considered unlawful if employees would “reasonably construe” it to prohibit activity protected by the NLRA.

The NLRB has cited Lutheran Heritage in more than 220 board decisions since 2004, according to a review of Bloomberg Law data. The “vast majority” of violations under the precedent are found under the “reasonably construe” standard, board’s general counsel said in a 2015 report.

NLRB panels and the agency’s administrative law judges have relied on the test to invalidate apparently neutral policies that didn’t refer to employees’ union activities or legally protected complaints or protests. Examples of rules and policies that were cited as “unfair labor practices” under the NLRA have included prohibitions on making false or threatening statements or using abusive language, and even rules prohibiting employees from displaying “negative energy or attitudes.”

Lutheran Heritage has also been cited in cases in which the board found that employer rules on photography and recording, leaving work, and conflicts of interest were overly broad and unlawful.

NLRB Chairman Leads Movement for Change

Miscimarra took a major role in the debate over employment rules in 2016, writing a lengthy dissent in the board’s William Beaumont Hospital decision .Lutheran Heritage should be overruled by the Board and, if not, repudiated by the courts,” he said.

The board’s focus on employee rights and the potentially chilling effect of ambiguous employer rules is “too simplistic at the same time it is too difficult to apply,” Miscimarra said. He urged the board to shift to a two-step analysis addressing both “(i) the potential adverse impact of the rule on NLRA-protected activity, and (ii) the legitimate justifications an employer may have for maintaining the rule.”

Under such a new approach, Miscimarra said, the board would have flexibility to distinguish between NLRA-protected activities that are “central to the Act” and others that are “more peripheral.”

Miscimarra wrote that “though well-intended, the Lutheran Heritage standard prevents the Board from giving meaningful consideration to the real world complexities associated with many employment policies, work rules and handbook provisions.”

Demanding “linguistic precision” of employers could convince them to simply abandon the use of employee manuals or handbooks, Miscimarra warned. “In this respect, Lutheran Heritage requires perfection that literally has become the enemy of the good.”

Miscimarra’s arguments have persuaded at least one former board member who signed the Lutheran Heritage decision in 2004. Ronald Meisburg, a Republican member at the time and now special counsel at Hunton & Williams in Washington, told Bloomberg BNA he would now support Miscimarra’s balancing test, though he declined to comment further on the issue.

Momentum for Change

Whether or not the NLRB acts before Miscimarra’s term ends on Dec. 16, former board member Hayes predicted the new majority will change its analysis of employer rules and policies.

If the board adopts Miscimarra’s proposed balancing or a similar test, there may still be vigorous disagreements about whether particular rules or policies are unlawful, he said.

However, he expects that in applying a new balancing test, the NLRB will look beyond speculation about the meaning of rules on paper and will require empirical evidence that an allegedly illegal rule actually has affected employees’ exercise of their NLRA rights.

Such a change, Hayes said, would at least produce a “more rational” record for NLRB decisions and give stakeholders a better idea of why the board finds rules unlawful.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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