Reversing the Course: Changes Coming to the NLRB - The Board Reverses Course on Handbooks and Joint Employers While the General Counsel Announces More to Come
Peter B. Robb took over as General Counsel of the National Labor Relations Board ("Board") on November 17, 2017, and soon after issued an official memorandum signaling his intention to reexamine Board precedent from the prior administration. Less than two weeks later, two Board rules from the prior administration were reversed.
Of interest to most employers is the decision in The Boeing Company
where the Board considered Boeing’s policy against the use of cameras (including cell phone cameras) on its property. A Board Administrative Law Judge held this “no camera” policy violated the National Labor Relations Act (the “NLRA”) because employees would “reasonably construe” the rule to prohibit an employee’s right to engage in concerted activities for the purpose of mutual aid or protection (“Section 7 rights”). The full Board overturned the “reasonably construe” rule as being “too simplistic at the same time [as being] too difficult to apply.” From now on, when the Board is evaluating a policy that is not obviously intended to interfere with Section 7 rights, it “will evaluate two things: (i) the nature and extent of the potential impact on NLRA [Section 7] rights, and (ii) legitimate justifications associated with the rule.”
The Board announced this will result in three categories of rules:
- Category 1 – Rules that should not impact Section 7 rights, or that may impact Section 7 rights, but that impact is outweighed by the rule’s justification. These rules are permissible.
- Category 2 – Rules that warrant individual scrutiny because they interfere with protected conduct or may not be justified.
- Category 3 – Rules that are unlawful because they interfere with Section 7 rights, such as a rule that prohibits employees from discussing wages with each other.
The upshot of this decision is that handbook policies will be judged on a more realistic scale of whether they truly interfere with protected rights without justification, instead of merely whether it is possible to “reasonably” construe such interference. For instance, Boeing’s “no camera” rule was considered permissible because “restrictions on the use of camera-enabled devices on Boeing property outweigh the rule’s more limited adverse effect on the exercise of Section 7 rights.”
But the Board was not finished. In Hy-Brand Industrial Contractors
, the Board found two employers to be joint employers, but importantly did so under a new legal standard. The prior rule had been that two employers could be “joint employers based on the mere existence of ‘reserved’ joint control or based on indirect control or control that is ‘limited and routine.’” The Board overruled this standard and announced it was reverting to its prior precedent that required actual supervision and direction
by one employer of another’s employees for there to be a joint employer. Importantly, the Board cited with approval a decision that found “limited and routine” supervision to be insufficient. In short, joint employer status will now require active supervision and control, which is easier for those involved to regulate or limit.
These rules may just be the start of a significant rollback of the precedent stemming from the prior administration. Technically, the General Counsel’s memorandum instructed regional offices to submit significant legal issues to the NLRB's Division of Advice so the General Counsel may issue mandatory guidance to the regional offices on how to present the issue to the Board. This is critical because it will allow the new General Counsel to argue to the full Board that some precedent may need to be revised. The General Counsel then provided a list of “examples” of issues where the General Counsel may “want to provide the Board with an alternative analysis”:
- Finding that conduct was for mutual aid and protection when only one employee had a stake in the outcome;
- Handbook rules prohibiting “disrespectful” conduct or requiring employees maintain confidentiality of a workplace investigation (or prohibiting a no camera policy);
- Finding employees have a presumptive right to use their employer’s email system to engage in Section 7 activities;
- Expanding what is permissible conduct by a union representative in a Weingarten interview; and
- Finding joint employer status based on indirect or potential control.
It is telling that two of the “examples” provided by the General Counsel were the subject of a Board change in precedent shortly thereafter. It is fair to say any of the more hotly contested decisions cited in his memorandum are ripe for reversal.
The General Counsel also rescinded several memos issued by his predecessors and certain advice memos seeking cases that could potentially have expanded employee rights to use employer-provided electronic systems beyond email to engage in Section 7 activities. In all, the General Counsel's memo indicates a likely return to prior Board precedent on a number of significant legal issues and signals the end of the activism that the prior Board was known for.