Commentary

What the change in NLRB precedent means for restaurant employers, workers

Assuming employers draft their rules in accordance with the general counsel's revised guidance, the ruling should result in fewer unfair labor practice charges brought for alleged unlawful rules and policies.

January 15, 2019

By Steve Miller, managing partner, Fisher Phillips

After the 2016 election, the Trump Administration appointed two members to the National Labor Relations Board, a federal agency that makes decisions interpreting the National Labor Relations Act and helps set the direction for the broader policy of U.S. labor law. Since that time, the reconstituted labor board has issued a number of decisions that challenge long-standing NLRB precedent.

One rapidly evolving area of labor law involves written employer work rules and policies. In recent years, the NLRB issued a number of decisions finding that work rules in employee handbooks interfered with employees' right to engage in conduct protected by the NLRA, such as employees' right to raise concerns regarding the terms and conditions of their employment. Because the written policies of both unionized and non-unionized employers are subject to violations, these decisions potentially affected virtually any restaurant operator. Many operators who drafted or revised their employment policies in the last several years grew frustrated by these restrictions.

By 2015, the NLRB had issued so many decisions attacking employer rules that the Board's general counsel published a memorandum providing guidance to employers in this area. The memorandum discussed numerous allegedly unlawful rules that might be found in an employee handbook, including rules restricting employees from engaging in the following conduct:

Disclosing employee information or confidential business information.
Engaging in insubordination or other forms of employee misconduct toward the employer.
Making or posting statements on social media or to outside parties that were inaccurate or that defamed or disparaged an employer.
Using an employer's logo or trademarks without approval.
Restricting the use of cellular phones or recording devices in the workplace.

Upcoming changes in NLRB precedent
At the end of 2017, the NLRB issued a decision involving the Boeing Company that reshaped the law regarding employer work rules. In the Boeing case, the NLRB issued a new test for determining whether “facially neutral” work policies (meaning rules that do not explicitly state they are limiting protected employee rights) interfere with employees exercising their rights under the NLRA. Previously, the NLRB held that neutral work rules that did explicitly restrict employees' rights were nevertheless unlawful if employees would “reasonably construe” the rule to prevent them from exercising their rights. The focus of this test was on how employees could interpret work rules to restrict their rights.

Under the Boeing decision, the NLRB eliminated this test. Using a phrase that will be music to every employer's ears, the NLRB now will seek to “ensure a meaningful balancing of employee rights and employer interests” when analyzing NLRA-based attacks on handbook rules and policies. In its place, the NLRB established the following two-prong test:

When evaluating a facially neutral policy, rule or handbook provision that would potentially interfere with the exercise of NLRA rights, the NLRB will evaluate: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate business justifications associated with the rule. In light of this new balancing of interests, and for attempted clarity, the NLRB also created three categories of policies and rules. Rules are subject to different levels of scrutiny depending on where they fall in these categories.

For example, if a restaurant has a rule limiting the use of recording with a cell phone in the kitchen, the NLRB can now place more significant emphasis on the legitimate employer justifications for such a rule (e.g., employee productivity, worker safety, preventing theft of trade secrets or confidential information) against the potential impact the rule may have on an employee's rights (e.g., limiting their ability to record information that might be the subject of legitimate employee concerns regarding the terms and conditions of their employment).

In consideration of this change, the NLRB's general counsel issued a memorandum on June 6, 2018, that provided revised guidance regarding employer work rules. The memorandum provides specific examples of written work rules and policies and illustrates how they fall within the three separate categories articulated under the Boeing case. While this memorandum is not binding (unlike an NLRB decision), it provides key insight as to how an NLRB regional office might interpret and enforce the Boeing decision when conducting an investigation.

How does this affect my restaurant policies?
Without question, this is a good development for written employer work rules and policies. The NLRB will give weight to the business justification of such rules, in addition to the potential impact under the NLRA. Assuming that employers draft their rules in accordance with the general counsel's revised guidance, this should result in fewer unfair labor practice charges brought for alleged unlawful rules and policies.

In consideration of these changes, employers who previously had revised their rules for legal compliance are encouraged to review their handbook policies to see where they might be able to articulate stronger expectations. Employers should not assume that all work rules restricting employee rights are suddenly legal – rather, an analysis of the individual rule in consideration of the revised legal test and guidance should be considered.

Cover photo: iStock