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Davis Brown Employment and Labor Law Blog

National Labor Relations Board Reverses Two Obama-Era Decisions - December 15, 2017

On Thursday, December 14, the National Labor Relations Board overturned two Obama-era decisions favoring employee and union rights over reasonable business decisions. 


Employer policies

The first decision, “Boeing,” overturned the 2014 Lutheran Heritage Village-Livonia standard for weighing the legality of employee handbook provisions. The 2014 decision was criticized widely for stating that any employer policy that could “potentially” impact a worker’s right to organize or bargain was a violation of the National Labor Relations Act.

For the past three years, the Board has struck down any policy where employees could "reasonably construe" the policy to bar them from exercising their rights to band together under the NLRA. The employer’s legitimate business decision for adopting the policy was irrelevant.

The Board had used that standard to strike down a variety of employer policies, including rules blocking workers from criticizing their employers on social media or making recordings in the workplace. In a victory for businesses, the Board reverted to the long-standing precedent that it will balance the nature and extent of a challenged rule's potential impact on NLRA rights against the legitimate justifications associated with the rule.

Rule classification

The Boeing decision lays out three categories into which the board will classify rules.

  1. Rules that are legal in all cases because they cannot be reasonably interpreted to interfere with workers' rights or because any interference is outweighed by business interests. Examples of this are rules that prohibit use of cameras on a company’s property or rules that require employees to act with civility toward one another. 
  2. Rules that are legal in some cases depending on their application. 
  3. Rules that are always illegal because they interfere with workers' rights in a way not outweighed by business interests. In this case, a blanket rule that prohibits employees from discussing their salary with other workers will remain an illegal restraint on an employee’s rights.

What this means to employers is yet to be determined. Certainly, employers will be anxious to see future decisions, particularly as it relates to an employee’s use of social media to comment about an employer or a fellow employee.

Addressing the most controversial aspect of the Lutheran Heritage Village-Livonia decision, the Board said that was now overruling all cases where it had nixed rules requiring employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace. The Board said such rules requiring employees to get along “reflect common-sense standards of conduct that advance substantial employee and employer interests, including the employer’s legal responsibility to maintain a work environment free of unlawful harassment based on sex, race or other protected characteristics, its substantial interest in preventing workplace violence, and its interest in avoiding unnecessary conflict that interferes with patient care (in a hospital), productivity and other legitimate business goals; and nearly every employee would desire and expect his or her employer to foster harmony.”

Joint Employers Definition Altered

In an equally significant, but much less impactful decision, “Hy-brand Industrial Contractors,” the Board reversed the controversial Browning-Ferris Industries ruling, which held that two partners in a business relationship are joint employers under the NLRA when one has even "indirect control" over the other's workers. 

The decision restored the NLRB's prior "direct control" standard for weighing joint employer status. That means that in order to be considered a joint-employer, the Board will require proof that the entities have exercised joint control over essential employment terms, the control must be ‘direct and immediate, and joint-employer status will not result from control that is limited and routine. 

The Board said that the Browning-Ferris standard was a distortion of common law as interpreted by the Board and the courts, was contrary to the NLRA, was ill-advised as a matter of policy, and prevented the Board from encouraging stability in labor-management relations.