Tag: Employment Law

Workplace In-Civility: The NLRB Changes Course

by Hunter Taylor

February 1, 2024

Employers have a vested interest in establishing and maintaining a professional environment for their customers and employees. It seems odd to even consider an alternative approach. After all, some amount of mental gymnastics is required to imagine a scenario in which the alternative would benefit the employer. But the concept is not free of its issues in execution. Some efforts to maintain “civility” in the workplace through employee and similar handbooks can create unintended consequences. The National Labor Relations Board (NLRB) has not hesitated to respond to these unintended consequences, as evidenced by its recent shifts in interpretation and enforcement of restrictions set forth in the National Labor Relations Act.

As an example, Section 7 of the Act guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” It gives employers the right “to refrain from any or all such activities.” Section 8(a)(1) of the Act also makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act.

What constitutes an interference, restraint, or coercion made by an employer is less clear. This issue has been the focus of varying (and at times conflicting) NLRB rulings in which the NLRB has attempted to determine where the Act lands on the pendulum between the: (a) employer’s interests in enforcing so-called “civility” policies, and (b) an employee’s freedom to engage in activities protected by the Act.

Confusingly, the NLRB has held that even when an employer’s facially neutral employment policy does not expressly restrict Section 7 activity, was not adopted in response to a protected activity, and has not applied to restrict a protected activity, the policy may still violate Section 8(a)(1) of the Act. Such a violation would occur if the employee “would reasonably construe the language to prohibit Section 7 activity.” Without sufficient regulatory guidance and clarity, an employer cannot adequately protect itself from an employee who may cleverly or unfairly “reasonably construe” language that violates the Act.

Until 2017, this “reasonableness” qualifier was enforced without substantial deference to objective circumstances, such as an employer’s legitimate interests in maintaining civility policies. This changed in the NLRB’s Boeing decision, in which the NLRB acknowledged the existence of special circumstances relative to the employer’s industry, work settings, and events specific to or resulting in the policy in question. Under Boeing, employers found some degree of stability in understanding the types or categories of policies that do not violate the Act.

However, following its invitation for public input (which was notably absent in Boeing), the NLRB changed course in its Stericycle decision. In Stericycle, the NLRB reemphasized a perception-based qualifier as to an employee’s “reasonable” interpretation of a workplace policy and paid particular attention to whether or not an “economically dependent” employee could interpret a policy to restrict Section 7 rights. The decision was a drastic shift in the NLRB’s position on the pendulum because it replaced the NLRB’s use of “categories” of acceptable rules in favor of a case-by-case approach that is contingent on disparate interpretations.

Poised to abandon the precedent it set in Boeing, the NLRB quickly applied the new elements and standards it laid out in Stericycle to Starbucks’ “How we communicate” policy.

Although Starbucks’ policy was facially neutral and included common requirements that its employees practice “professional and respectful” behavior, contained a uniform dress code, and required attendance at HR meetings related to employee benefits, the NLRB determined that Starbucks’ application of these policies created opposing interpretations as to the policy’s true meaning. According to the ruling, Starbucks’ selective implementation of its policies and certain language within its policy suggested there could be negative consequences for union activity. This resulted in the NLRB finding that Starbucks’ policy was “overly broad, vague, and can [be] reasonably construed to intrude on Section 7.” Of note, the NLRB imposed a significant burden of proof on Starbucks, requiring it to demonstrate that it would be “unable” to advance its legitimate interests with a “more narrowly tailored rule.” The impact of a burden of this sort cannot be understated as applied to workplace policies because each employer policy may now be rendered unenforceable if a less “restrictive” alternative is available.

In sum, recent NLRB cases reflect a substantial shift in the legality of workplace “civility” policies that “could” be interpreted to limit union activity and involvement. Further, the NLRB cases serve as a great reminder that employers need to periodically review their handbooks and update the handbooks accordingly. Any such updates should narrowly tailor policies to promote enforceability and hedge against potential contests that a policy violates the Act. 

To discuss how these policy changes could impact your business, contact Hunter Taylor at Griffith Davison’s Dallas office at (972) 392-8900, or email Hunter directly at htaylor@griffithdavison.com. 

This article first appeared in the January 2024 Issue of Dallas Bar Association Headnotes.

NLRB Adopts New Standard for Evaluating Workplace Rules

by Caleb Johnston

November 1, 2023

The National Labor Relations Board (“NLRB”) has prescribed a new legal standard for evaluating whether an employer’s workplace rules tend to interfere with the rights of employees which are protected by Section 7 of the National Labor Relations Act (“NLRA”). Specifically, the NLRB’s decision in Stericycle, Inc., 372 NLRB No. 113 (N.L.R.B. Aug. 2, 2023) sets forth the new standard and overturns the old test established in Boeing Co., 365 NLRB No. 154 (N.L.R.B. Dec. 14, 2017), which had governed employer’s workplace rules for the past six years. Employers should be aware of the changes the NLRB has implemented as it may require an employer to revise its workplace rules to comply with the new Stericycle standard. 

Legal Background. 

Under Section 7 of the NLRA, employees have the right to form, join, or assist labor unions and the right to join together as employees to advance their interests as employees. If an employer implements a workplace rule which interferes with, restrains, or coerces an employee in exercising their Section 7 rights, then the employer will have committed “unfair labor practice” in violation of the NLRA. 

A workplace rule which threatens to terminate an employee for joining a labor union is clearly a violation of an employee’s Section 7 rights. However, the analysis is not as clear when an employer implements facially neutral workplace rule. For example, a workplace rule which prohibits employees from discussing or disclosing “confidential information” is facially neutral. If the term “confidential information” can be interpreted to include information such as individual salaries or work schedules, then the rule may violate Section 7 because employees have the right under Section 7 to discuss and disclose their salaries and work schedules. In these more challenging cases, the standard prescribed by the NLRB will be used to determine whether or not the facially neutral workplace rule in question violates an employee’s Section 7 rights. 

The NLRB recently changed its standard for evaluating facially neutral workplace rules. The old standard, established in Boeing, sought to provide greater clarity and certainty for employers by placing workplace rules into one of three categories: (i) rules that were considered lawful; (ii) rules that were deemed unlawful; and (iii) rules that warranted “individualized scrutiny” to determine whether they violated an employee’s Section 7 rights. The three-category system established in Boeing is no longer in effect, however, as the NLRB recently decided to move to a more rigorous standard for analyzing workplace rules in Stericycle.

The New Stericycle Standard. 

The new standard in Stericycle replaces Boeing’s categorical approach with a case-by-case analysis of workplace rules. The Stericycle standard also implements a burden shifting framework. First, the NLRB must prove that the challenged workplace rule “has a reasonable tendency to chill employees from exercising their Section 7 rights.” At this stage, the workplace rule is interpreted from the perspective of a “reasonable employee.”  In other words, if an employee could reasonably interpret the workplace rule to interfere with, restrain, or coerce the employee in exercising their Section 7 rights, then the workplace rule is presumptively unlawful. 

The burden then shifts to the employer to rebut the presumption. This will require the employer to prove “that the rule advances a legitimate and substantial business interest, and that the employer is unable to advance that interest with a more narrowly tailored rule.” If the employer can satisfy its burden, then the challenged workplace rule is upheld as lawful.

Practical Considerations. 

The new Stericycle standard went into effect on August 2, 2023, and applies retroactively, meaning that all workplace rules which are challenged as violating Section 7 of the NLRA will be reviewed by the NLRB under the Stericycle standard moving forward. As a result, workplace rules that were previously lawful for an employer to maintain under the Boeing standard may now be held unlawful under Stericycle. For example, a “no recording” rule which prohibits an employee from recording workplace conversations was categorically approved as lawful under Boeing. Today, however, the same rule may be held unlawful under Stericycle if the rule is not narrowly tailored to serve the employer’s legitimate and substantial business interest.

Employers should consider reviewing their employee handbooks, manuals and other documents containing work rules or policies to ensure compliance with the NLRB’s newly announced standard in Stericycle. In addition, employers should consider adopting a policy which specifically sets out an employee’s Section 7 rights under the NLRA and explains that the employer’s workplace rules should not be interpreted as restricting those rights. While there is no guarantee that such policy would save an employer’s workplace rule from violating the NLRA, the General Counsel for the NLRB has taken the position that such policy should create a presumption that an employer’s rules are lawful.

To discuss how Stericycle may impact your workplace rules, please feel free to contact one of our attorneys at (972) 392-8900. 

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This update should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Further, this update shall not create a lawyer-client relationship. The contents are intended for general informational purposes only, and you are urged to consult an attorney regarding the contents hereof.

Contractor Sentenced to Three Years in Prison Following Employee Death

December 17, 2019

On November 3, 2017, Gerardo Juarez began his first day of work for James Coon Construction. The next day Juarez fell from a roof he was repairing, suffering injuries which later proved fatal. Following the accident, James Coon, owner of Coon Construction, pled guilty to involuntary manslaughter and workers’ compensation fraud and was sentenced to three years in prison.

Coon Construction was hired to repair a roof at a three-story apartment complex in Akron, Ohio. New-hire Juarez was placed on the crew tasked with making the repairs. After two years of criminal litigation following the accident, it was discovered Coon did not provide Juarez with safety equipment adequate for work performed at such height, which is a felony. Evidence suggested that his fall could have been prevented had he been wearing adequate fall protection. Coon also failed to provide workers’ compensation coverage, another felony.

Criminal prosecution for failure to provide a safe environment for employees is an increasing trend. Federal law requires employers to instruct each employee in the recognition and avoidance of unsafe conditions and the systems applicable to his or her work environment to control any hazards or other exposure to illness or injury.  Failure to follow applicable safety laws and provide workers’ compensation insurance as required by law can expose employers to possible criminal action.

Reporting Fraudulent Information to the Workers’ Compensation Board Results in Criminal Charges

December 12, 2019

Lying to the workers’ compensation authorities in order to reduce premiums can result in criminal charges. On September 5, 2019, Manhattan D.A. and other New York state investigators announced the indictment of unlicensed labor broker Salvador Almonte and insurance broker Steven Asvasadourian on multiple fraud charges after they were caught in a scheme which included lying to the New York State Insurance Fund about the status and work of construction employees. Almonte and his accomplice underreported the size of Almonte’s companies and lied to insurance carriers about the type of work being performed to evade more than $1 million dollars in insurance premiums. In doing so, the pair left more than one hundred construction workers underinsured. In one instance, Almonte claimed that workers he sent to perform dangerous tasks on high-rise construction projects were cleaners, thereby drastically lowering the premium rates he paid.  Investigators found that more than 12 of Almonte’s workers have been injured in the past four years, one fatally, and Almonte refused to acknowledge to the New York Workers’ Compensation Board that he was their employer.

While this case illustrates extreme examples of fraud in the workers’ compensation system, the exposure to potential criminal liability for fraudulently reporting information to the workers’ compensation board is a legitimate, serious consequence of such actions.