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December 22, 2017

NLRB Overrules Lutheran Heritage and Eliminates the “Reasonably Construe” Standard to Determine the Lawfulness of Workplace Policies

On December 14, 2017, the National Labor Relations Board (the “Board”) issued The Boeing Company and Society of Professional Engineering Employees in Aerospace, case numbers 19–CA–090932, 19–CA–090948, and 19–CA–095926 (“Boeing Company”), which overruled Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) (“Lutheran Heritage”).  Under Lutheran Heritage, a facially neutral workplace policy, rule, or handbook provision (“policy”) that was neither enacted in response to employees’ collective bargaining activity nor applied to restrict employees’ exercise of protected collective bargaining rights could nonetheless be found to violate the National Labor Relations Act (the “NLRA”) if employees could “reasonably construe” it to prohibit protected collective bargaining activity.  Since 2004, this standard has been applied to invalidate many facially neutral workplace policies governing workplace civility and standards of conduct, such as those prohibiting employees from criticizing their employer on social media and those advising employees to “work harmoniously” with each other or conduct themselves in a “positive and professional manner.”  Many employers found the Board’s application of Lutheran Heritage to be overbroad and unpredictable.

In Boeing Company, the Board in a 3-2 decision overruled Lutheran Heritage, and explained that it would “no longer find unlawful the mere maintenance of facially neutral employment policies, work rules and handbook provisions based on a single inquiry, which made legality turn on whether an employee ‘would reasonably construe’ a rule to prohibit some type of potential [collective bargaining] activity that might (or might not) occur in the future.”  Instead, the Board will now determine the lawfulness of a facially neutral workplace policy by balancing (i) the nature and extent of the policy’s potential impact on collective bargaining rights from the perspective of the employee with (ii) the legitimate justifications for the policy’s enactment given the specific facts and circumstances of a case. 

After conducting this balancing test, the Board will then classify the challenged policy into one of three categories. 

Category 1 Policies are always lawful to maintain.  This category includes (i) policies that cannot be reasonably interpreted to have a tendency to interfere with collective bargaining rights, thus obviating the need to balance employees’ rights with employer justifications, and (ii) policies that could be reasonably interpreted to have a tendency to interfere with collective bargaining rights, but the relatively low risk of this interference is always outweighed by the justifications for the rule.  According to the Board, examples of Category 1 Policies are those prohibiting employees from using personal electronic devices equipped with cameras when working with confidential information, those requiring employees to develop positive working relationships with coworkers, “and other rules requiring employees to abide by basic standards of civility.” 

Category 2 Policies may be lawful to maintain in some cases and unlawful to maintain in others, depending on whether the specific facts of a given case show the policy’s interference with collective bargaining rights to be outweighed by the justification for the policy.  The Board did not provide any examples of a Category 2 Policy.

Category 3 Policies are always unlawful to maintain regardless of the circumstances because they can be reasonably interpreted to have a tendency to interfere with collective bargaining rights and this risk of interference can never be outweighed by any legitimate justification.  According to the Board, an example of a Category 3 Policy is one that prohibits employees from discussing wages or benefits with each other.  

The Board also emphasized that although it may be lawful for an employer to maintain a Category 1 or Category 2 Policy, it remains unlawful for an employer to selectively enforce a Category 1 or Category 2 Policy in a manner than restricts protected collective bargaining activities.  For example, a group of employees seeking to unionize cannot be terminated for violating a Category 1 Policy requiring harmony and inclusion in the workplace because although this policy is lawful, the effect of this application is not. 

In support of its decision to overrule Lutheran Heritage, the Board explained “[t]hough well-intentioned, the Lutheran Heritage standard prevents the [B]oard from giving meaningful consideration to the real-world ‘complexities’ associated with many employment policies, work rules and handbook provisions,” which is contrary to Supreme Court precedent, the Board’s earlier case law, the NLRA, and “the Board’s responsibility to promote certainty, predictability and stability.”  “Moreover, Lutheran Heritage produced rampant confusion for employers, employees and unions,” because neither the Board nor the courts have been able to agree on a consistent and predictable way to apply it.

The Board’s new standard will be applied to all currently pending and future cases.

Takeaway for Employers

This decision eliminates much of the uncertainty and overreach of Lutheran Heritage.  Employers now have greater flexibility to adopt workplace civility policies with less risk of the policies being found to violate the NLRA.  Employers should, however, ensure that civility policies are not enforced in a way that interferes with employees’ protected collective bargaining rights.  Employers should also exercise caution when adopting workplace policies outside of the civility context, as the Category 1 presumption of lawfulness may not apply.  Thus, employers need to be prepared to articulate legitimate reasons for adopting such a policy in the event of a challenge. 
Given the Board’s stated commitment to providing more clarity regarding the lawfulness of facially neutral workplace policies, future decisions applying this new standard should establish a more firm understanding of permissible workplace policies and the boundaries of each category.


If you have any questions regarding the Board’s decision in Boeing Company, please do not hesitate to contact us.