Balancing Interests

The National Labor Relations Board chair's dissent on a case centered on employee handbooks portends the board's future direction, legal experts say.

Wednesday, March 29, 2017
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Upholding a 2015 decision by an administrative law judge in its San Francisco branch, the National Labor Relations Board recently ruled that Verizon Wireless Inc. maintained numerous handbook rules that were too restrictive on employee communications and behavior.

In Cellco Partnership d/b/a Verizon Wireless, an employee filed an unfair labor practice charge alleging five provisions of the company's code of conduct unlawfully interfered with the right of employees to engage in concerted activity in violation of the National Labor Relations Act.

In her ruling, the judge held that Verizon's restrictions relating to "solicitation and fundraising," which prohibited employees from using company email to distribute materials to one another, including during non-working time, and the "prohibited activities" section, which forbid employees from using company email to communicate with each other on behalf of a labor organization, were overly broad and infringed upon employees' NLRA rights.

The ruling relied heavily on the standard established in 2004 in Lutheran Heritage Village-Livonia, which deemed work rules and handbook provisions unlawful if employees "would reasonably construe" them to prohibit activities under Section 7 of the NLRA, which grants employees the right to engage in concerted, protected activities.

The board's decision was not unanimous, however.

Acting -- and likely future -- NLRB Chairman Philip Miscimarra wrote a lengthy dissent in which he called upon the board to overturn and reject the Lutheran Heritage standard. Harkening back to his dissent in last year's William Beaumont Hospital ruling, Miscimarra called for the board to abandon its existing analysis and adopt a new "balancing test" that would take into account an employer's legitimate justifications for a particular policy or rule.

"The 'reasonably construe' standard defies common sense and is contrary to the Act in numerous respects," writes Miscimarra. "It entails a single-minded consideration of NLRA-protected rights . . . without taking into account the many legitimate justifications associated with particular policies, rules and handbook provisions, which may have as their purpose avoiding potentially fatal accidents, reducing the risk of workplace violence, or preventing unlawful harassment."

For their part, employment-law practitioners agree with Miscimarra's argument, which comes on the heels of eight years of "social engineering" by the board during the Obama administration, according to Robert Carrol, a partner in the labor and employment and alcohol beverage practice groups at Arent Fox in San Francisco. Many attorneys find fault with the "reasonably construe" standard because, they say, it can be interpreted too broadly.

"The NLRB has taken many garden-variety and innocuous employment policies and asked whether the employees might 'reasonably construe' them as limiting their Section 7 rights," says Laurent Drogin, a partner at New York-based Tarter Krinsky & Drogin, head of the firm's labor and employment practice and co-head of its restrictive covenant subgroup. "The board's view of how an employee might 'reasonably construe' a policy has been carried to an illogical place."

While he holds that ruling on unfair labor practices became somewhat of a "cottage industry" for the NLRB during the Obama years, Steven Swirsky, a member in the employment, labor and workforce management and health care and life sciences practices at New York-based Epstein Becker Green, believes Miscimarra's dissent offers hope to employers who have been struggling to draft policies and handbooks that will pass muster with the NLRB.

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"It's been a real challenge for employers because the pendulum has swung very far in one direction," says Swirsky. "The dissent calls for is a more balanced approach that considers why the employer says they need this policy and then looks to see how it's applied and how it's done in practice as opposed to finding these perceived violations based on the existence of the policy without any evidence it ever inhibited anybody from exercising their rights."

According to Swirsky, Miscimarra's dissenting opinion bears "real predictive value" when it comes to future actions of the board. Currently, however, Republican Miscimarra is in the minority, as the other two members of the board, Mark Gaston Pearce and Lauren McFerran, are Democrats. When President Trump fills the two existing vacancies, the NLRB will likely adopt a much more employer-focused approach to the interpretation of labor law, according to Carrol.

"The chairman has laid out a very workable test, this balancing test, that strikes the right approach," says Carrol. "There's probably a sporting chance, a better than 50-percent chance that ultimately his dissent will cause that intellectual conversation to gather momentum, but it's not going to happen next week or next month."

In the meantime, Carrol recommends HR executives take a critical look at their employee handbook, seek to simplify the language and look for ways to make them "more protected, even under the current 'would reasonably construe' standard." Always, he says, it's advisable to consult with counsel to make sure they are not "trampling on employees' Section 7 rights."

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