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NLRB GC’s Attempt At Summary Judgment In Handbook Case Rejected By NLRB Majority

The change in a presidential administration always brings changes to government agencies, including the NLRB, as new appointments are made reflecting the policy preferences of the administration.  The NLRB is not immune to this change and it has been historical practice for the president to appoint three members from the party of the administration and two members from the opposing party.  Of the five positions on the NLRB two are vacant, and both eventually will be filled by the Republican administration, presumably by management-oriented members.  If that happens, then it is a sure bet there will be changes to existing case law.

While the world awaits these changes (or at least the fraction of the world that cares about labor relations), however, the NLRB continues on with its business as if nothing has changed.  The agency continues to push the envelope on its initiatives.

NLRB GC Attempts To Forego Hearing Altogether By Filing Motion For Summary Judgment

In a recent case,  Mercedes-Benz U.S. International, Inc., 365 NLRB No. 67 (May 5, 2017)  a two person NLRB majority rejected the General Counsel’s attempt to gain summary judgment in a handbook case.  Chairman Miscimarra (a Republican) and Member McFerran (a Democrat) denied a motion of the General Counsel to find a violation of the Act based solely on the employer’s maintenance of a rule prohibiting the use of cameras and recording devices in its manufacturing facility without prior authorization.  The Board majority found summary judgment to be inappropriate because the employer had raised arguments about its “asserted business justification, and about whether the rules were communicated or applied in a manner that clearly conveyed an intent to permit protected activity.”

Member Pearce, in a lengthy dissent, stated he would grant the motion for summary judgment, asserting that the defenses raised by the employer would not matter, “Even assuming the truth of the [employer’s] claims, they do not cure the unlawfulness inherent in the [language of the] rule.”

Significance Of The Case:  Employers Can Continue To Litigate Policy Issues

This two page decision is remarkable for a few reasons.  First, the whole concept of the handbook violations has been based on the language of the policy itself, and usually all other matters are irrelevant. Under the NLRB’s analysis in Lutheran Heritage Village-Livonia, 343 NLRB 646, 647  (2004), assuming there has not been application of the rule in a discriminatory manner or that it was promulgated in response to protected activity, then the primary inquiry is whether “employees would reasonably construe the language to prohibit Section 7 activity.” This analysis is essentially the Board’s review of the language at issue to make the determination. Thus, the employer’s business justification for the rule may not be apparent from the handbook rule itself and thus would not factor into the analysis.

Second, it is surprising the General Counsel hasn’t attempted to obtain summary judgment in handbook cases in the last several years the Lutheran Heritage standard has been in existence.  Those who have the pleasure of being involved in these cases know that the majority are usually submitted to the Administrative Law Judge or Board directly by stipulation because there is no dispute over the language of the policy; in the vast majority of cases there is no evidence of actual impact on identifiable employees. The argument that there are not any facts in dispute would seem to have been viable for many years.

Third, one can only guess as to why this is being attempted now but it seems logical, and likely, that the change in administration has prompted the NLRB to continue pushing the agenda in a new and aggressive manner while it awaits new appointments. Precluding the employer from having a hearing on the matter by obtaining summary judgment could potentially cut months off of the litigation and get to a remedy much faster.  Of course, employers dislike these types of cases because of the fact it is seemingly illogical that common workplace policies, many of which have been in place for years and evince common sense standards could somehow hypothetically be interpreted in such manner as to violate the Act.  Employers also find this area of the law puzzling because of the vagueness of the standard (which often is decided by two Board members) and the potential serious consequences of a finding of a handbook violation of the Act despite the fact there is rarely, if ever, any evidence identifying employee who impacted, let alone actually read the policy in question.

The Change That Is Coming Likely Will Involve Changes To The Lutheran Heritage Standard

Of the many decisions the NLRB may revisit in the coming months, Lutheran Heritage is certainly on the list.  In prior dissents, then Member Miscimarra has expressed his view that the standard in Lutheran Heritage is unworkable and needs to be changed.  See, e.g., William Beaumont Hospital, 363 NLRB No. 162 (2016) (“This case presents a tragic example presented by the Lutheran Heritage standard”).  Given these strong pronouncements it is very likely we will see some change to the standard if not an outright reversal.

Changes to NLRB precedent could still take months.  For any change to occur, the case law has to be challenged in pending cases and that position has to be advanced up to the Board in the event of an adverse decision.

© 2017 Proskauer Rose LLP.

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