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Posts Tagged ‘NLRA’

Gone In A Flash: NLRB Overrules Employee Handbook Standard

Posted on: December 20th, 2017

By: William E. Collins, Jr.

On December 14, 2017, in a case involving the Boeing Company, the National Labor Relations Board (“NLRB”) overruled the Lutheran Heritage workplace policy standard that stood for over 13 years, and ushered in a new standard for workplace policies. This decision is a significant shift in labor policy, leaving many hopeful that the new standard will provide consistency and give employers a clear picture of compliance.

Under the now overruled Lutheran Heritage standard, policies, rules, and handbook provisions that appeared neutral still violated the National Labor Relations Act (“NLRA”) if an employee could “reasonably construe” the policy to prohibit protected activity. As you can imagine, discerning what an employee would “reasonably construe” often led to puzzling results.

Departing from the “reasonably construed” standard, the Boeing decision sets out that an employer’s rule violates the NLRA only if the reasonable interpretation of the policy would potentially interfere with an employee’s ability to engage in protected activity.  The NLRB will look at two factors:

(1) the nature and extent of any potential impact on the protected activity; and

(2) the legitimate justifications associated with the rule.

Under this standard, the NLRB will categorize employer rules in one of three categories:





Category 1 The rule is lawful to maintain.

The rule is lawful because:

(a) when reasonably interpreted the rule has no tendency to interfere with the ability to engage in protected activity; or

(b) while the rule may have some tendency to interfere with an employees rights, the risk of interference is outweighed by the corresponding justifications.

Category 2 It is unclear whether the rule, as a general matter, would prohibit or interfere with an employee’s right to engage in protected activity. These rules warrant “individualized scrutiny” to determine if there is interference and whether the interference is outweighed by the specific justifications in the case.
Category 3 The rule is unlawful. The rule prohibits or limits an employee’s right to engage in protected activity and that limitation is not outweighed by the justifications.


Applying this new standard, the NLRB held that the Boeing “no-camera” policy was a Category 1 policy. While the policy requiring a camera permit to take pictures inside Boeing’s facilities could interfere with protected activity, the NLRB found that the justification for the rule outweighed this risk because it serves to protect information that is proprietary and involves national security.

While this more objective standard should remove some of the guesswork, employers are wise to revisit their employee handbooks to determine whether their policies fall into Category 1, or are at least defensible under Category 2. As you prepare your 2018 employee handbooks, members of the FMG National Employment Law Practice Group are available to assist your organization review and finalize these documents.

If you have any more questions or would like more information, please contact Will Collins at [email protected].


NLRB Delivers One-Two Punch to Pair of Standards that Have Dogged Employers

Posted on: December 18th, 2017

By: Paul H. Derrick

In a stunning development, the National Labor Relations Board has overruled a pair of controversial standards that have caused headaches in the business community for years.

In the first case, the NLRB reversed an Obama-era decision that put employers potentially on the hook for labor law violations committed by their subcontractors and franchisees.  By a 3-2 vote, the Board erased its decision in a case known as Browning-Ferris Industries, which found a company to be a joint-employer with a subcontractor or franchisee if it had “indirect” control over the terms and conditions of the terms and conditions of the workers’ employment or had the “reserved authority to do so.”

Since that broad standard was adopted, the Board has used it to bring literally hundreds of cases against McDonald’s and other businesses for the alleged acts of their contractors and franchisees.  Going forward, however, the NLRB says that two or more entities will be deemed joint employers under the National Labor Relations Act only if there is proof that one entity actually exercised direct and immediate control over essential employment terms of another entity’s employees.  Proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will no longer be sufficient to establish a joint-employer relationship.

In a second unexpected development, also by a narrow 3-2 margin, the NLRB overturned its 2004 decision in Lutheran Heritage Village-Livonia, under which many seemingly harmless workplace rules were deemed unlawful.  The Board had determined in that case that employer rules violate the NLRA if they “could be reasonably construed” by employees to prohibit the exercise of rights under the NLRA.

Going forward, the NLRB says that it will consider the nature and extent of a challenged rule’s potential impact on employee rights under the NLRA and the legitimate justifications associated with the rule.  The Board also announced three categories into which it will now classify rules to provide greater clarity and certainty to employees, employers, and unions.

The first category covers 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; the second covers rules that are legal in some cases, depending on their application; and the third covers rules that are always unlawful because they interfere with workers’ rights and cannot be outweighed by business interests.  Notably, the Board also announced that it will no longer find a rule to be unlawful simply because it requires employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace.

Because of ongoing changes in the NLRB’s composition and the recent nomination of a new General Counsel, these latest decisions will certainly be the subject of challenge and much debate.  If you have any questions or would like more information, please contact Paul Derrick at [email protected].

Updates on the “Joint Employer” Standard

Posted on: October 10th, 2017

By: Tim Holdsworth

More than two years have passed since the National Labor Relations Board (“NLRB”) handed down its new and controversial joint employer standard in Browning-Ferris Industries of California, 362 NLRB No. 186 (August 27, 2015). As you may recall, that decision greatly expanded the standard under which an entity could be found as a joint employer under the National Labor Relations Act (“NLRA”). In departing from its own well-established standards, the NLRB announced that they will no longer require a joint employer to possess and exercise authority to control employees’ terms and conditions of employment, but instead will find sufficient control if the entity merely reserves this authority. They also announced they will no longer require the employer’s control to be exercised directly and immediately. Instead, the NLRB declared that control exercised indirectly, such as through an intermediary, can establish the requisite control.

The U.S. Department of Labor (“DOL”) adopted a similar standard for who it considered a “joint employer” under the Fair Labor Standards Act (“FLSA”) and the Migrant and Seasonal Agricultural Worker Protection Act shortly thereafter.

Neither of these controversial steps has fared well. The Browning-Ferris decision has been under attack in courts, while the DOL rescinded its guidance earlier this year under new Labor Secretary Alex Acosta.

Legislative efforts also have been made to give further guidance to businesses that have struggled with the uncertain and convoluted joint employer scheme. Recently, the U.S. House of Representatives Education and Workforce Committee approved a bill that would amend both the NLRA and FLSA to require that a company exert “direct, actual and immediate” control over workers to be considered an employer.

We will continue to monitor this legislation and provide any updates. For now, however, employers need to know that the Browning-Ferris standard is still in effect.

If you have any questions about federal, state, or local wage and hour laws, please contact Tim Holdsworth at [email protected] or any of the attorneys in FMG’s Labor & Employment Law Section.

Do Mandatory Arbitration Agreements with Concerted Action Waivers Violate Employee Rights?

Posted on: September 8th, 2016


By: Pamela Everett

The United States Court of Appeals for the 11th Circuit is poised to address whether Samsung Electronics America, Inc. violated Section 8(a)(1) of the NLRA by requiring its employees to sign an arbitration agreement waiving their rights to maintain class or collective work-related claims in any forum. The ruling in this case could force the Supreme Court to address this issue soon to resolve a widening circuit split.

On August 18, 2015, in the case of Samsung Electronics America, Inc. f/k/a Samsung Telecommunications America, LLC, Case No. 12-CA-145083, Administrative Law Judge Joel Biblowitz struck down a provision requiring employees and the company to arbitrate any class action lawsuit. However, he did not find that Samsung had unlawfully interrogated an employee regarding her protected activity. On February 3, 2016, the NLRB issued Order 363 NLRB No. 105, applying its decisions in D. R. Horton, Inc., 357 NLRB No. 184 (2012). In its Order, the NLRB affirmed Judge Biblowitz’s findings that the Samsung violated Section 8(a)(1) by maintaining and enforcing an arbitration agreement that requires employees, as a condition of employment, to waive their rights to pursue class or collective actions involving employment-related claims in all forums, whether arbitral or judicial. However, the NLRB reversed Judge Biblowitz’s ruling that Samsung had not unlawfully interrogated an employee about her protected, concerted activity. The appeal of this case was transferred from the 5th Circuit to the 11th Circuit on February 25, 2016.

Most recently, the Seventh Circuit, in Lewis v. Epic Sys. Corp., and the Ninth Circuit, in Morris v. Ernst & Young, adopted the NLRB’s position that mandatory arbitration agreements with concerted action waivers violate Sections 7 and 8 of the NLRA. However, the Fifth and Eighth Circuits have enforced mandatory arbitration agreements with class action waivers citing the Federal Arbitration Act. Murphy Oil, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015); Cellular Sales of Missouri, LLC v. NLRB, 824 F.3d 772 (8th Cir. 2016).

Stay tuned…

Fourth Circuit Voids NLRB Posting Rule

Posted on: June 18th, 2013

By: Anthony Del RioUnion

Last week the Fourth U.S. Circuit Court of Appeals struck down the National Labor Relation Board’s (NLRB) 2011 poster rule.  The rule required employers to post information regarding employees’ rights to organize under the National Labor Relations Act (NLRA).  The Fourth Circuit is the second appeals court to strike down the rule, the D.C. Circuit having done so a month prior.

The poster language crafted by the NLRB stated that employees had the right to form and join unions, collectively bargain with representation, discuss the terms of their employment and take action to improve working conditions. Employers who did not post the notice would have been found to have committed an unfair labor practice.

The D.C. Circuit rejected the rule based on First Amendment grounds, but the Fourth Circuit did not find it necessary to reach the constitutional challenge.  The Fourth Circuit disagreed with the NLRB’s proactive rulemaking (historically, it has only been the NLRB’s responsibility to react to NLRA violations, not to proactively prevent them). The Fourth Circuit held that the NLRB had exceeded their legal authority because the National Labor Relations Act did not charge the NLRB with notifying employees of their rights.