NLRB general counsel urges Board to flip-flop on workplace rules standards

Recent history of workplace rule board jurisprudence

In 2004, the Board issued its decision in Lutheran Heritage. There, the Board held that a facially neutral rule in an employee handbook could be unlawful if employees “would reasonably construe the language to prohibit” Section 7 rights. Over the next decade, the Board relied on Lutheran Heritage to overturn many facially neutral employer policies, like promoting “harmonious interactions and relationships,” prohibiting “loud, abusive, or foul language,” and requiring employees to “keep customer and employee information secure.”

In December 2017, the Board scrapped Lutheran Heritage and issued a new, more employer-friendly standard in Boeing Co. Under Boeing Co., the Board would no longer ask how an employee “would reasonably construe” a facially neutral rule. Rather, a facially neutral rule would be presumed lawful if either “(i) the rule, when reasonably interpreted, does not prohibit or interfere with protected NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.” Two years later, in LA Specialty Produce Co., the Board issued the employer-friendly clarification that under Boeing Co., the party contesting a workplace rule always bears the burden, before any consideration of the employer’s business interests, “to prove that a facially neutral rule would in context be interpreted by a reasonable employee” to interfere with Section 7 rights (emphasis in original).

In December 2019, in Apogee Retail, the Board issued another win for employers when it applied Boeing to a rule requiring employee confidentiality in connection with workplace investigations. In its decision, the Board held, in relevant part, that rules requiring confidentiality in connection with workplace investigations are per se lawful, at least where they are limited to the duration of the investigation.

The GC's proposal in Stericycle, Inc.

The GC’s brief in Stericycle takes aim at Boeing Co. and its progeny. At issue in Stericycle were workplace rules that addressed “personal conduct,” “conflicts of interest,” and “confidentiality of harassment complaints.” An administrative law judge found that these rules violated the Act. The employer appealed, and the Board invited briefing from the parties and interested amici – including the GC – regarding whether the Board should maintain or modify the Boeing Co. standard.

The GC, in its brief, urged that Boeing Co. be overruled  in favor of a standard based on, but somewhat different than, Lutheran Heritage. The elements of the GC’s proposal are as follows:

• The Board should consider workplace rules in context on a case-by-case basis to determine whether “employees could reasonably construe the language to unlawfully prohibit Section 7 activity.”
• The Board should presume that a workplace rule violates the Act “when one reasonable interpretation of a rule is to prohibit Section 7 activity, even if that is not the only reasonable interpretation.”
• It should be an affirmative defense for an employer to “demonstrate” that a workplace rule is lawful, even if it can be reasonably read to prohibit Section 7 activity, because it “is justified by ‘special circumstances’ outweighing employees’ Section 7 rights and that the rule is narrowly tailored to those circumstances.”
• The Board “should formulate a model prophylactic statement of rights, which affirmatively and specifically sets out employee statutory rights and explains that no [workplace] rule should be interpreted as restricting those rights.” If an employer prominently includes such a statement in their workplace policies, “the Board should apply a presumption that employees could not reasonably construe those rules to prohibit Section 7 activity.”

Drawing from this proposal, the GC also asked the Board to overturn Apogee Retail’s categorical endorsement of investigative confidentiality rules. The GC pushed instead for a standard that “place[s] on employers the burden to prove that confidentiality was necessary for a particular investigation, on a case-by-case basis, based on objectively reasonable grounds for believing that the integrity of an investigation would be compromised without it.”

If the Board adopts the GC’s proposal, it will significantly restrict employers’ discretion to impose and enforce workplace rules, both generally and with respect to investigative confidentiality. No longer will certain categories workplace rules be per se lawful. Rather, the burden will shift to employers to defend challenges to their policies on a case-by-case basis. Employers should begin preparing for this outcome and revisit workplace rules that may be deemed to run afoul of the GC’s proposed standard.

Authored by David Baron and Kayla Strauss.