Hunton Employment & Labor Perspectives

The National Labor Relations Board (the “Board”) under the current administration continues to issue employer friendly rulings in the context of evaluating whether employer work rules violate the National Labor Relations Act (the “Act”).   In LA Specialty Produce Company, 368 NLRB No. 93 (October 10, 2019) (“LA Produce”), the Board’s first ruling applying the standard in The Boeing Co., 365 NLRB No. 154 (2017) for determining the validity of rules, policies and handbook provisions under the Act, the Board’s three-member majority opined that the employer’s rules limiting workers’ comments to reporters and blocking them from sharing certain information about clients are legal despite a union’s claims that the rules encroach on workers’ rights under the Act. The decision offers the first glimpse at how the Board’s Republican leadership will balance workers’ rights and their employers’ interests. The Board’s approach in LA Produce is likely to please businesses and their advocates, as it gives greater weight to the business reality and the business justification for an employer’s work rules, policies, and handbook provisions.

As we previously reported, the Boeing test replaced a 2004 test that said seemingly neutral workplace rules are illegal if workers would “reasonably construe” them to limit rights under the Act, such as those empowering workers to form unions or join together to voice complaints. Under President Barack Obama, the Board applied that earlier test to strike down a variety of rules, including bans on employees making recordings of the workplace and criticizing their employers on social media.

The Boeing test takes a more employer-friendly approach, directing the ALJs who resolve disputes to look at whether a reasonable employee would interpret a rule as restricting their rights. If the rule is found to brush up against the Act’s protections, then the ALJ must weigh its effects on workers’ rights against the employer’s reasons for maintaining the rule.  If the latter outweighs the former, the rule stands.

The Board in LA Specialty Produce applied the Boeing test to two rules a Teamsters unit alleged infringed workers’ rights: (1) a “confidentiality rule” making workers keep certain employer secrets; and (2) a “media contact rule” limiting what workers can say to reporters.

The majority, composed of Chairman John Ring and members Marvin Kaplan and Bill Emanuel, said reasonable workers would not read either rule as restricting their union rights. It also said rules like those of LA Specialty Produce are presumptively legal, giving other employers a green light to place similar limits on workers.

Among other things, LA Produce’s confidentiality rule makes workers protect client and vendor lists, which the ALJ said workers may understand to block them from exercising their right under the Act to appeal to customers in labor disputes. But the rule only bars workers from sharing these lists, not from speaking to the businesses named on them, the majority said.

And while the media contact rule says employees “cannot provide … any information” when approached by members of the media, this is in the context of designating the company president as its sole spokesperson, the majority said. As such, reasonable workers would not read it to bar them from exercising their right to press labor concerns to the media.

The LA Specialty Produce decision shows that this Board will give employers the benefit of the doubt when analyzing workplace rules’ effects on workers’ organizing rights. Under the prior test, the Board strained to find ways a rule could potentially encroach on rights under the Act. But under the new, more employer-friendly test, the Board’s analysis is more realistic.  While the LA Specialty Produce decision highlights a positive trend for employers under the Trump Board, employers should remember that the Board’s composition could change after the 2020 presidential election.