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Author: Scarinci Hollenbeck, LLC
Date: August 3, 2018
The Firm
201-896-4100 info@sh-law.comEmployee handbooks are intended to reduce legal risks in the workplace. However, if not properly drafted to comply with state and federal laws, they can sometimes do more harm than good. The National Labor Review Board (NLRB or Board) recently issued new guidance regarding when employee handbooks may violate the National Labor Relations Act (NLRA). In good news for New Jersey employers, the new guidance is more business-friendly.
In 2017, the NLRB established a new test for evaluating employers’ work rules. The Board’s decision in The Boeing Company, 365 NLRB No. 154 (2017) reflects a more business-friendly standard that focuses on the balance between the rule’s negative impact on employees’ ability to exercise their Section 7 rights and the rule’s connection to employers’ right to maintain discipline and productivity in their workplace.
The new test provides that the Board will find a rule unlawful if it explicitly restricts employees’ protected concerted activity. If the rule is not explicitly unlawful, the Board will evaluate two things: (1) the rule’s potential impact on protected concerted activity; and (2) the employer’s legitimate business justifications for maintaining the rule. If the justifications for the rule outweigh the potential impact on employees’ rights, the rule is lawful. Conversely, if the potential impact on employees’ rights outweighs the justifications for the rule, it is unlawful.
In Boeing, the NLRB also divided employment policies, rules, and handbook provisions into three categories:
In GC Memorandum 18-04, the General Counsel of the NLRB notes that that ambiguities in rules should no longer be interpreted against the drafter. Moreover, generalized provisions should not be interpreted as banning all activity that could conceivably be included within the rule. Accordingly, Regional Offices must now determine whether a rule would be interpreted as prohibiting Section 7 activity, as opposed to whether it could conceivably be so interpreted. The General Counsel also advises the Board’s regional directors into which of the three categories certain workplace rules fall.
Category 1 Rules
Category 1 rules are generally considered lawful. They include:
As the NLRB highlights, merely maintaining a facially lawful rule does not determine whether the rule was applied lawfully. Accordingly, simply because a rule falls in Category 1 does not mean an employer may lawfully use the rule to prohibit protected concerted activity or to discipline employees engaged in protected concerted activity.
Category 2 Rules
Category 2 rules are not obviously lawful or unlawful. Accordingly, they must be evaluated on a case-by-case basis pursuant to Boeing to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications. Examples include:
Category 3 Rules
Category 3 rules are generally unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule. Examples include:
Prior to the Board’s reversal in position, employers were understandably wary of prohibiting employee conduct when drafting workplace rules for fear that they could be interpreted as potentially restricting employees’ rights under Section 7. The Boeing decision and subsequent NLRB guidance give employers greater flexibility when drafting employee handbook provisions. Of course, employers must ensure that they follow the NLRB’s guidance and should always consider having an experienced New Jersey employment attorney review any handbook changes.
If you have any questions or if you would like to discuss the matter further, please contact me, Sean Dias, at 201-806-3364.
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