The New NLRB Overturns Controversial Handbook Rules and Joint Employer Standards

A stark break with precedent for the National Labor Relations Board, first signaled by the Republican-appointed General Counsel Peter Robb two weeks ago in an advice memorandum (GC 18-02), came to fruition this week. With a pair of 3-2 decisions, The Boeing Company, 365 NLRB No. 154 (2017) and Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., 365 NLRB No. 156 (2017), the Board reversed cases regarding the standard to determine whether an employer’s workplace rule(s) violate the National Labor Relations Act and whether two entities can be considered joint employers.

The Boeing Company overturned the prior Board decision in Lutheran Heritage Village-Livonia. In Lutheran Heritage, the Board held that any workplace rule that could even reasonably be construed by an employee to prohibit conduct protected by the National Labor Relations Act was unlawful. Among a litany of other problems with applying the Lutheran Heritage standard, the Board explained that it was “single-minded” by failing to take into account legitimate justifications that employers may have for establishing such policies and invalidating rules solely because they were somehow ambiguous. Instead, Boeing establishes a new standard for rules that are facially neutral and do not expressly target NLRA activities, such as efforts to unionize or expressing complaints about an employee’s terms and conditions of employment. The new standard is a balancing test that takes into account the following: “(i) the nature and extent of the potential impact on NLRA rights and (ii) legitimate justifications associated with the rule.” Ultimately, the Board overruled that administrative law judge’s prior decision and held that the “no camera” rule promulgated by Boeing was lawful in light of Boeing’s heightened security needs.

In a second break with precedent, the Hy-Brand case overruled the highly criticized Obama-era NLRB decision in Browning-Ferris Industries, 362, NLRB No. 186 (2015) and returned to the pre-Browning-Ferris standard. As described by the Board, Browning-Ferris held that two entities could be joint employers “based on the mere existence of reserved,” “indirect,” or “limited and routine” joint control. Hy-Brand revived the standard in place prior to 2015, which required “direct and immediate” control over at least one essential term or condition of employment. According to the majority, reviving this standard would make the Board’s joint-employer analysis consistent with that of Federal and state courts.

What does this mean for employers? The Republican-majority Board is moving quickly, and the General Counsel’s memorandum may provide a roadmap for upcoming decisions, whether regarding email rules (Purple Communications), protection for obscene or highly inappropriate conduct (Pier Sixty, LLC), or “conduct by union representatives in Weingarten interviews” (Fry’s Food Stores).