NLRB Calls Employment Policies Into Question

Posted on Wednesday, June 5th, 2024.

The National Labor Relations Board has taken a troubling position on facially neutral employment policies.

Section 7 of the National Labor Relations Act guarantees workers the right to “self-organization, to form, join, or assist labor organizations, to bargain collectively…, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Employers may not prohibit employees from engaging in such “collective activity” or adopt rules that have a “chilling effect” on collective activity. Work rules that expressly interfere with collective activity are clearly unlawful. But what about facially neutral work rules that may have an impact on collective activity? How is the employer’s right to manage its business balanced against the employees’ right to engage in such activity?

This is an issue on which the Board has taken vacillating positions, alternating between employer-friendly and employee-friendly approaches. The pendulum has now swung back to “employee-friendly.” An employer must show that its facially neutral work rules “advance a legitimate and substantial business interest” and are narrowly tailored to achieve the employer’s objective. Notably, when considering claims under this framework, the Board will now assess whether the challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights from the perspective of an employee who is economically dependent on the employer, who contemplates Section 7 activity, but who wishes to avoid the risk of being disciplined or discharged for violating the challenged rule.

Under this standard, the Board has deemed rules prohibiting “disrespect toward supervision” and “dishonesty or falsification of any company records” to have an unlawful chilling effect, as have rules prohibiting obscene or abusive language, prohibiting employees from restricting production, and prohibiting unauthorized use of telephones. A NLRB Administrative Law Judge recently held that Starbuck’s policies stating that “[employees] are expected to communicate with other [employees] and customers in a respectful manner at all times,” and that “[w]e treat each other with dignity and respect” were unlawful.

The employer may defend a policy by showing that the policy “advances a legitimate and substantial business interest” that cannot be advanced with a more narrowly tailored rule. This is a very difficult standard to meet. No categories of policies are considered presumptively valid. Each employment policy must be analyzed on a case-by-case, fact-specific basis.

The right to engage in “collective activity” is not limited to unionized employers. All business owners and non-profits are subject to NLRB rulings pertaining to “collective activity” even if their workers are not unionized or not seeking to unionize.

Employers must review their personnel policies to assure compliance with the new NLRB standards. Contact Trimboli & Prusinowski at 973-660-1095 to schedule a consultation.

Latest News