Category: Labor Law

2023 NLRB Update Cover Slide

2023 NLRB Update (Webinar Recap)

On October 18, 2023, I presented a complimentary webinar entitled “2023 NLRB Update”. For those who couldn’t attend the live webinar, I’m happy to make it available for you to watch at your convenience.

In the webinar, I discuss:

  • Work Rules & Policies
  • Election Rules & Results
  • Bargaining Rules & Standards
  • What’s Next?

and much more!

The National Labor Relations Board enforces the National Labor Relations Act, which applies to most public-sector employers in the United States. This law permits employees to unionize, but also has implications in non-union workforces as well. The NLRB’s interpretation and application of the NLRA fluctuates, typically based on which political party is in the majority on the 5-member Board in Washington. NLRB Board members are appointed by the President to five-year terms, so policy shifts, which primarily occur through adjudicating cases, do not occur immediately upon a change in the White House. But recently, the Board has reversed course on many issues, creating a more burdensome regulatory environment for employers.

Don’t have time to watch the whole webinar right now? Click here to download the slides from the webinar.

Why You Should Watch “2023 NLRB Update”

A series of significant policy changes from the NLRB should have all private employers on alert. For example, many previously commonplace work rules and employee policies may now be found to violate the NLRA. Moreover, changes to the union election rules and related procedures will likely make it harder for employers to oppose union organizing campaigns. Developments regarding collective bargaining rights and obligations are also shifting, as is pertinent to those companies whose employees are already represented by a labor organization.

Much of the most dramatic new caselaw arose in August 2023. The new election rules are scheduled to take effect on December 26, 2023. This webinar discusses what all U.S. businesses should know about the latest from the NLRB. More than ever, employers must be proactive to avoid unfair labor practice charges and representation proceedings.

This webinar also provides insights into recent union election data, trends, and results that aren’t available elsewhere.

Don’t Miss Our Future Webinars!

Click here to sign up for the Horton Management Law email newsletter to be among the first to know when registration is open for upcoming programs! And follow us on LinkedIn for even more frequent updates on important employment law issues.

Employer Work Rules

NLRB Gets Tougher on Employer Work Rules

Many U.S. employers still don’t realize how much influence the National Labor Relations Board has over their workplaces. In a potentially wide-reaching decision, the federal labor board has changed its standard for applying the National Labor Relations Act to employer work rules. In other words, more rules and policies, such as those commonly found in employee handbooks, will be deemed unlawful by the NLRB if their validity is challenged.

Section 7 of the NLRA

Yes, the National Labor Relations Act gives employees the right to unionize for purposes of collective bargaining with their employers. But its protections don’t end there. The NLRA also affords employees the right to take other actions short of unionization.

Section 7 of the Act grants 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 also grants the less policed right “to refrain from any or all such activities.”)

It is the protection for engaging in concerted activities for their mutual aid or protection that can be relied on to protect employees in workforces that are not represented by a union and may not even be seeking to unionize.

How Does Section 7 Affect Employee Handbooks?

The National Labor Relations Board does not permit employers to adopt workplace policies that unduly restrict employees in exercising Section 7 rights. For example, policies prohibiting employees from discussing compensation have long been deemed unlawful. How and where to draw the line, however, has been a hotly debated topic at the Board for at least the past couple of decades.

Both sides of this debate generally agree that the question is when do employer work rules go too far that they would have a tendency to chill protected employee activity. Again, employees usually have the right to share their salaries to enable them to seek better pay. So, a rule prohibiting them from discussing compensation is assumed to credibly “chill,” or prevent, such discussions without any compelling legal interest on the employer’s part. But many other employer work rules are more readily justified by legitimate purposes. Thus, the question becomes, what’s more important–the employer’s interests or the employee’s potential exercise of Section 7 rights?

Previous Standard on Employer Work Rules

In a series of decisions beginning in 2017, a Republican-majority labor board reinstituted standards for scrutinizing employer policies that give more weight to employers’ business interests. As explained by the General Counsel of the NLRB at the time, many categories of rules usually would not violate the NLRA “either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the Act, or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the rule.”

Such “usually lawful” rules included:

  • Civility Rules
  • No-Photography Rules and No-Recording Rules
  • Rules Against Insubordination, Non-cooperation, or On-the-job Conduct that Adversely Affects Operations
  • Disruptive Behavior Rules
  • Rules Protecting Confidential, Proprietary, and Customer Information or Documents
  • Rules against Defamation or Misrepresentation
  • Rules against Using Employer Logos or Intellectual Property
  • Rules Requiring Authorization to Speak for Company
  • Rules Banning Disloyalty, Nepotism, or Self-Enrichment

Other rules would require more individualized scrutiny based on the context, such as:

  • Broad conflict-of-interest rules
  • Confidentiality rules encompassing “employer business” or “employee information”
  • Rules regarding disparagement or criticism of the employer
  • Restrictions on use of the employer’s name
  • Rules restricting speaking to the media or third parties
  • Bans on off-duty conduct that might harm the employer
  • Rules against making false or inaccurate statements

New, More Restrictive Standard

In the Biden administration, the NLRB shifted to a pro-labor, Democratic majority. This shift has recently culminated in a litany of reversals of Board policy. In a case involving Stericycle, Inc., the NLRB adopted “a new legal standard to decide whether an employer’s work rule that does not expressly restrict employees’ protected concerted activity under Section 7” violates the NLRA.

In other words, the NLRB has changed the standard that presumably applies to all of the bulleted categories of employer work rules above. According to the current Board majority, they have devised a new standard that “builds on and revises” a test introduced through a 2004 case (which had been since reversed during the Trump administration).

The Board majority began with the premise and assertion that “the current standard fails to account for the economic dependency of employees on their employers.” Because of that dependence, the NLRB now places the burden squarely on the employer to ensure that no employee would reasonably interpret any rule as preventing them from doing anything that might be protected activity under Section 7.

In its words, the Board initially requires proof “that a challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights.” To reiterate the employee-centric nature of that inquiry, the Board “will interpret the rule from the perspective of an employee who is subject to the rule and economically dependent on the employer, and who also contemplates engaging in protected concerted activity.”

To rebut the presumption that a rule is unlawful, the employer must now prove “that it advances legitimate and substantial business interests that cannot be achieved by a more narrowly tailored rule.”

Impact of New Standard on Old Rules

The NLRB’s August 2, 2023, decision confirms that the new standard applies even to pre-existing employer work rules. The new standard will likely be challenged in the courts. Yet, for now at least, employers who ignore it do so at the risk of NLRB prosecution. Granted, most employee handbooks aren’t the subject of unfair labor practice charges at the NLRB, even if they contain questionable and now potentially unlawful policies. However, there are certain scenarios where legal scrutiny becomes more likely.

Unions seeking to represent an employer’s workforce commonly review employee handbooks, work rules, and policy manuals. If they find anything that could violate the NLRA, they may bring charges as part of their organizing campaign.

In addition, maintaining potentially unlawful policies becomes problematic when attempting to discipline an employee for violating one of them. In that case, the employee may be motivated to go to the NLRB to challenge the discipline imposed, especially in the case of termination. In addition to other potentially costly remedies, the NLRB  has the authority to reinstate employees fired for unlawful reasons.

Review Your Policies

The NLRB is creating something of a revolving door for employee handbooks. If your current work rules were written in the past few years under the then-prevailing NLRB standards, they may contain policies that the Board would now consider unlawful. On the other hand, if your relevant policies were cautiously drafted or revised during the Obama administration, they may still be acceptable to the NLRB.

In any event, all private employers (the NLRB doesn’t have jurisdiction over most government entities) should consider evaluating their policy manuals under the new standard. There is, perhaps, even more urgency if you’re in an industry or scenario where you feel at risk for future unionization or have policies you commonly rely on for discipline that might fall into the categories listed above.

 

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Captive Audience Meetings

New York Bans “Captive Audience” Meetings

On September 6, 2023, New York Governor Kathy Hochul signed amendments to state law that enhance employee protections. The amendments to Section 201-d of the New York Labor Law prohibit employers from disciplining employees for refusing to listen to the employer’s opinion concerning religious or political matters. Most notably, this new restriction prevents employers from holding so-called “captive audience” meetings in response to union organizing campaigns.

New York Labor Law Section 201-d

For decades, New York has had among the broadest protections for employees based on their off-duty conduct. Section 201-d of the state’s Labor Law has long prohibited employers from discriminating against applicants and employees for any of the following:

  1. Legal political activities outside of working hours, off of the employer’s premises and without use of the employer’s equipment or other property.
  2. Legal use of consumable products before the beginning or after the conclusion of the employee’s work hours, and off of the employer’s premises and without use of the employer’s equipment or other property.
  3. Legal recreational activities outside work hours off of the employer’s premises and without use of the employer’s equipment or other property.
  4. Membership in a union or any exercise of rights under the federal Labor Management Relations Act or New York’s Taylor Law.

The law was amended in 2021 to grant employees the right to use marijuana outside of work.

Read here for more on the traditional 201-d protections. 

“Captive Audience” Meetings

For the past 75 years, the National Labor Relations Board has interpreted the National Labor Relations Act to permit employers to hold mandatory meetings during employees’ work time to convey the company’s views on unions and labor organizing. Such meetings have been most commonly used in response to an imminent threat of unionization, such as when a union has filed an election petition with the NLRB.

Because the employees are at work and being paid, the NLRB has reasoned that their employers have the right to determine what the employees will be doing, even if that means attending a meeting. Of course, there have always been limits on what the employer can say, especially while an election is pending. For example, employers could not threaten reprisal based on an employee’s support of the union or offer incentives to employees who vote no to representation. Still, labor unions have long derided this practice as unduly coercive. They argue that because the employees are a “captive audience,” they have no choice but to listen to what management says and may believe they must go along with the company’s view.

Despite the longstanding NLRB precedent, the agency’s current General Counsel has indicated an interest in reconsidering an employer’s prerogative to hold such meetings. Given their decidedly pro-labor sentiments, it is entirely plausible that the current NLRB majority will eventually reverse the Board’s landmark 1948 ruling in Babcock v. Wilcox.

Section 201-d Amendments

Following past attempts by Oregon and Wisconsin, the New York Legislature has clearly set out to block captive audience meetings as a matter of state law. In other words, they’re trying to do what the NLRB might, but hasn’t yet accomplished. (Connecticut, Maine, and Minnesota have now also enacted similar legislation.)

In case there was any uncertainty about their intentions, the sponsors of the amendments included the following in their memorandum introducing the bill:

“Over the past 40 years, as labor union membership has declined and worker protections have been stripped, employers have been emboldened to share their political and personal beliefs with employees. . . . Not only are employers fabricating support for partisan politicians of their liking, they are also pushing their opinions on legislative issues, unionism, and religious topics on their workers.

It is interesting that the Legislature has squeezed the ban on captive audience meetings into a law designed to protect off-duty conduct. The connection is perhaps logical, but seemingly tenuous. In theory, the amendments purport to safeguard employees’ political and religious speech and beliefs, which one assumes would typically be exercised outside of work. However, the direct prohibition here is not related to what employees choose to do, but on how employers can communicate with their employees–even during work time.

Political Matters

Section 201-d already used the term “political activities” to mean “(i) running for public office, (ii) campaigning for a candidate for public office, or (iii) participating in fund-raising activities for the benefit of a candidate, political party or political advocacy group.” Generally, employers could not punish employees for engaging in those activities on their own time.

Now the law also separately defines “political matters.” This new term means “matters relating to elections for political office, political parties, legislation, regulation and the decision to join or support any political party or political, civic, community, fraternal or labor organization.”

At first glance, that addition would seem to expand the scope of political activity that employees are entitled to engage in. Ironically, however, employees aren’t getting any new rights to join political parties or civic organizations, as discussed below. If they have such rights, they’re afforded by the pre-existing aspects of Section 201-d.

Religious Matters

The amendments also add the term “religious matters” to Section 201-d. It is defined  to mean “matters relating to religious affiliation and practice and the decision to join or support any religious organization or association.”

Both federal and state employment discrimination laws already provide extensive protections for employees based on their religious beliefs. Section 201-d, as amended, doesn’t directly affect those rights. Instead, it (arguably) adds restrictions on what employers can say to employees about religion.

Newly Protected “Category”

The new references to “political matters” and “religious matters” are only used in discussing the types of meetings and communications that employers can no longer require employees to be party to.

In addition to the previous protections for off-duty conduct, Section 201-d now prohibits employers from “discharg[ing] from employment or otherwise discriminat[ing] against an individual in compensation, promotion, or terms, conditions or privileges of employment because of an individual’s refusal to:

  • attend an employer-sponsored meeting with the employer or its agent, representative or designee, the primary purpose of which is to communicate the employer’s opinion concerning religious or political matters; or
  • listen to speech or view communications, the primary purpose of which is to communicate the employer’s opinion concerning religious or political matters.

Exceptions

As with the original Section 201-d employer prohibitions, the amendments include some specific exceptions. Consequently, the law still does NOT prohibit:

  • an employer or its agent, representative or designee from communicating to its employees any information that the employer is required by law to communicate, but only to the extent of such legal requirement;
  • an employer or its agent, representative or designee from communicating to its employees any information that is necessary for such employees to perform their job duties;
  • an institution of higher education, or any agent, representative or designee of such institution, from meeting with or participating in any communications with its employees that are part of coursework, any symposia or an academic program at such institution;
  • casual conversations between employees or between an employee and an agent, representative or designee of an employer, provided participation in such conversations is not required; or
  • a requirement limited to the employer’s managerial and supervisory employees.

Religious Institutions

There is also a new exception for religious institutions in certain circumstances. The exception references and invokes Title VII’s exemption “with respect to speech on religious matters to employees who perform work connected with the activities undertaken by” a covered religious entity.

Posting Requirement

For the first time, the Legislature has added a notice posting requirement related to Section 201-d. Employers must now “post a sign in every workplace at the location or locations where notices to employees are normally posted, to inform employees of their rights” under this provision of the Labor Law. The notice obligation is not limited to the new captive audience meeting ban. It also includes the statute’s off-duty conduct protections.

Without further guidance from the State on what the posting must include, employers may consider posting the entire text of Labor Law Section 201-d to ensure compliance. You can download a copy here.

Implications for Employers

The amendments took effect immediately. Accordingly, employers should at least consider posting Section 201-d promptly. Notably, under another recent change to State law, the posting must also be made available to all employees electronically.

If your company was otherwise considering holding any meetings to discuss what may now be deemed “political” or “religious” matters, make sure you understand these amendments before proceeding. Legal challenges are expected, as the National Labor Relations Act may be deemed to preempt the New York law, at least with respect to the captive audience meetings related to unionization. However, employers who take the risk of relying on that argument may find themselves in protracted litigation and on the other side of a currently pro-labor National Labor Relations Board.

Note that the law does not say employers cannot discuss political or religious matters. However, employees must be free to choose whether or not to attend or listen to meetings, conversations, or other means of communication in which such subjects are discussed. Unfortunately, employers who initiate such conversations and subsequently have reason to discipline an employee who happened not to participate could face a claim of discrimination/retaliation based on their declining to do so.

 

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