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Unions Beware: NLRB’s LA Specialty Produce Decision ‘Provides More Clarity’ On Employee Handbook Rule Standards

Published Friday, December 6, 2019
by The National Law Review
Unions Beware: NLRB’s LA Specialty Produce Decision ‘Provides More Clarity’ On Employee Handbook Rule Standards

(WASHINGTON, D.C.) - On October 10th, 2019, the National Labor Relations Board’s (NLRB) decision in LA Specialty Produce Company provided some employer-friendly clarification of its standard for assessing the lawfulness of Employee Handbook Provisions under the National Labor Relations Act (NLRA), and in doing so, categorized two specific types of policies as generally lawful. 

In this case, the NLRB analyzed the following two handbook rules maintained by LA Specialty Produce to determine whether the rules improperly impeded or chilled Employees’ NLRA rights to engage in protected concerted activity for the purpose of their mutual aid and protection:

  • Confidentiality and Non-Disclosure: “Every Employee is responsible for protecting any and all information that is used, acquired or added to regarding matters that are confidential and proprietary of (LA Specialty Produce) including, but not limited to client/vendor lists…”
  • Media Contact: “Employees approached for interview and/or comments by the news media, cannot provide them with any information. Our President is the only person authorized and designated to comment on Company policies or any event that may affect our organization.”

As you may recall, under the previous Presidential Administration, when the NLRB was comprised of a majority of Democrat appointees, common-place, common sense employer rules such as these were frequently found to violate Employees’ Rights under the NLRA. 

However, as you may also recall from our previous post, in 2017, the new Republican-majority Board announced a revised test in The Boeing Company, abandoning the prior Lutheran Heritage Village-Livonia test under which so many policies were deemed by the previous NLRB to be unlawful

The new Boeing Test narrowed the types of policies that would be considered to violate the NLRA going forward

In a nutshell, the standard utilized immediately prior to Boeing allowed the NLRB to find unlawful any policy that “could” be interpreted to interfere or chill Section 7 rights, whether or not that interpretation was reasonable or likely

But under the Boeing Test, as the LA Specialty Produce decision explains, the NLRB “must not presume improper interference with Employee Rights” and instead now considers (i) the nature and extent of a policy’s or rule’s impact on NLRA rights, and then, (ii) the legitimate employer justifications associated with the rule. 

The LA Specialty Board also reiterated the following three Employee Rule categories, guided by United States Supreme Court precedent: Rules that, when reasonably interpreted, do not interfere with the exercise of NLRA Rights, or the potential adverse impact on protected rights is outweighed by justifications associated with the rule; 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; and Rules that are unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.

The LA Specialty Board clarified that a determination as to which category a specific rule falls in should be the result of an analysis under the Boeing test, and not part of the test itself, and that, to the extent the Board can categorically place specific types of rules or policies into one of these categories, it will bring significant clarity to employers as they draft their own Employee Rules.

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