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NLRB Adopts New Test for Evaluating Workplace Policies

On the eve of former Chairman Philip Miscimarra's departure from the National Labor Relations Board (NLRB), the Board Thursday created a new test for determining the lawfulness of workplace policies, overturning the test articulated in its 2004 Lutheran Heritage-Livonia decision. In The Boeing Company and Society of Professional Engineering Employees in Aerospace (Boeing), the Board rejected the more-than-decade-old "reasonably construe" test in favor of an assessment seeking to balance employer and employee interests.

In Boeing, the Board upheld an employer policy prohibiting cameras and the use of devices with cameras in the workplace without first demonstrating a business need and obtaining a permit. In reaffirming the policy, the Board found that the employer's justifications—including national security concerns—outweighed the potential impact on protected activity. This decision overturned Lutheran Heritage, which held that it was unlawful to maintain workplace rules that could be reasonably construed to chill employee exercise of rights protected by Section 7 of the National Labor Relations Act (NLRA). Under Lutheran Heritage, workplace policies having nothing to do with prohibiting or limiting protected conduct could still be found unlawful if a reasonable employee might construe the rules as discouraging protected activity.

The Board's decision in Boeing was foreshadowed by a partial dissent of then-member Miscimarra in the 2016 William Beaumont Hospital case, which advocated abandonment of the "reasonably construe" test in favor of one that included consideration of employer justifications. Boeing largely tracks Miscimarra's dissent in Beaumont, finding the Lutheran Heritage test problematic because it invalidated neutral workplace rules and limited the Board's ability to apply its discretion in considering whether the mere existence of policies with substantial justifications outweighed what would be minimal, if any, impact on perhaps only peripherally protected activity.

Boeing establishes a new test for workplace policies, which requires evaluation of two factors: the nature and extent of the potential impact on Section 7 rights, and legitimate justifications associated with the rule. The Boeing test will aim to "strike the proper balance between asserted business justifications and the invasion of employee rights … focusing on the perspective of the employee."

Boeing "provide[s] greater clarity and certainty to employees, employers, and unions" by classifying the work rules and policies into three categories. The first category includes rules designated as lawful because, as reasonably interpreted, they do not interfere with the exercise of Section 7 rights or because any potential adverse impact is outweighed by employer justifications. The second category includes rules warranting individualized scrutiny in order to conduct the balancing test where the rules are found to interfere with protected rights. The third category includes rules designated as unlawful because they prohibit or limit protected rights and the adverse impact is not outweighed by the rule's justifications.

Notably, Boeing maintains one aspect of Lutheran Heritage: although mere maintenance of a rule may not be unlawful, a challenge can still be made as to an employer's application of the rule. Where an employer applies a lawful rule to discipline employees who have engaged in protected activity, the application of it could violate the NLRA even when the rule on its face does not.

Copyright © by Ballard Spahr LLP

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Daniel Johns, Ballard Spahr Law Firm, Philadelphia, Labor and Employment Attorney
Partner

Daniel V. Johns is the Leader of Ballard Spahr's Higher Education Group and is a member of the firm's Labor and Employment Group. Mr. Johns represents and advises employers and management in a variety of labor and employment issues, including discrimination, harassment, and other civil rights litigation; interest and grievance arbitrations; at-will litigation; restrictive covenant/trade secret claims; benefits litigation; independent contractor classification issues; collective bargaining; union avoidance; and unfair labor practice litigation before the National Labor...

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Mary Cate Gordon, Ballard Spahr Law Firm, New Jersey, Labor and Employment Litigation Attorney
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Mary Cate Gordon represents employers in all aspects of labor and employment law. Her employment litigation experience includes defending wage and hour, harassment, discrimination, retaliation, breach of contract, unfair competition, and wrongful termination claims. Ms. Gordon counsels employers on workplace issues such as hiring and discharge matters, reductions in force, wage and hour compliance, drug testing, and disability accommodations. She has experience assisting employers with drafting and reviewing workplace policies and agreements, including social media policies, employment agreements, and separation agreements.

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Sade Calin, Ballard Spahr Law Firm, New Jersey, Litigation Attorney
Associate

Sadé Calin is a member of the Litigation Department. Her experience includes the handling of labor and employment disputes, including discrimination cases, and serving as a court-trained mediator in landlord-tenant and municipal cases in Camden County, New Jersey. Before joining the firm full time, Ms. Calin was a summer associate at Ballard Spahr. She assisted with a variety of research projects, helped author chapters focused on at-will employment and attorney's fees in discrimination cases for the Employment Litigation in New Jersey treatise, and played a significant...

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