On December 14, 2017, in a 3-2 decision involving The Boeing Company, the National Labor Relations Board (the Board) overruled Lutheran Heritage Village-Livonia, which set the Board’s previous standard governing whether facially neutral workplace rules, policies, and employee handbook provisions unlawfully interfere with employees’ exercise of Section 7 rights under the National Labor Relations Act (NLRA).

Under the previous Lutheran Heritage standard, the Board held that maintaining workplace rules that would be “reasonably construed” by an employee to prohibit the exercise of NLRA rights violated the NLRA.  Workplace rules could be impermissible under the Lutheran Heritage standard even if those rules were facially neutral, meaning that they did not explicitly prohibit protected activities, were not adopted in response to such activities, or were not applied to restrict such activities. In practice, the Board has applied the Lutheran Heritage standard over the past eight years in a manner that essentially meant that any ambiguous or broad policy governing employee conduct was unlawful.

In The Boeing Company decision, the Board replaced the Lutheran Heritage “reasonably construe” standard with the following new test: “when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.” 

The Board applied the new standard to a Boeing no-camera rule restricting the use of camera-enabled devices on its property.  The Board noted that as a military defense contractor, Boeing’s work is highly sensitive, and often classified.  Allowing employees to use cameras on its property could raise national security concerns.  With this in mind, the Board upheld Boeing’s no-camera policy, ruling that while it potentially may affect the exercise of NLRA rights, that potential impact was relatively slight.  The Board further found that the potential impact to employees is outweighed by substantial and important justifications associated with Boeing maintaining the rule.

In an attempt to clarify the new standard, the Board also announced that, moving forward, it will begin placing employment policies, rules, and handbook provisions it reviews into one of three categories:
 

• Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.  The Board noted that, in general, no-camera rules like Boeing’s fall into this category.  The Board cited rules requiring employees to abide by basic standards of civility as another example of a Category 1 rule.  Thus, the Board overruled past cases where, under the prior standard, the Board held that employers violated the NLRA by maintaining rules requiring employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace. 
   
• Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.
   
• Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and where the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.  An example would be a rule that prohibits employees from discussing wages or benefits with one another.
   

Under the now-overruled Lutheran Heritage standard, the Board regularly found a myriad of employer policies unlawful, including confidentiality, dress code, social media, workplace conduct, off-duty access, and employment at-will policies, among others.  By announcing that it will begin categorizing employer policies into one of the three categories described above, the Board is expected to provide employers with better guidance on the types of policies they may lawfully include in their employee handbooks in the future.  The examples the Board has provided in Category 1 already indicate a much more permissive approach. This should spell relief for many employers who may have removed seemingly benign policies from their handbooks out of fear that the Board would find them unlawful. We will continue to monitor additional developments as the Board reviews employer policies using the new standard and apprise you of any updates.