The NLRB continues to issue decisions on a variety of interesting issues.  On October 10, the Board held, in LA Specialty Produce Co., 368 NLRB No. 93 (Oct. 10, 2019), that an employer’s strong confidentiality protections and limited media availability rules were lawful, and in so doing, clarified the analysis under the newly-issued Boeing standard, which we previously outlined here.

The Majority’s Clarifications of Boeing

In Boeing Company, 365 NLRB No. 154 (2017), the Board set forth a new standard for evaluating whether facially lawful workplace rules, policies or employee handbook provisions unlawfully interfered with employees’ Section 7 rights.  The Board established a new balancing test, which considered the impact of the rule and the business justification.  In so doing, the Board created a framework of three categories of rules (the first category is lawful, the second is dependent on the circumstances, and the third is unlawful). The Regions (with the instruction of the NLRB General Counsel) have been tasked with interpreting and applying Boeing using this framework, and which we have blogged about previously here.

The Board majority (Chairman Ring, Members Kaplan and Emanuel) in LA Specialty Produce Co., clarified that the NLRB’s General Counsel’s initial burden under Boeing is to prove a facially neutral rule would potentially interfere with the exercise of Section 7 rights, as interpreted by a reasonable employee who is “aware of his legal rights” but “interprets work rules as they apply to the everydayness of his job”; if not, then the rule is lawful and the inquiry ends there.  Only if the initial burden is met would the Boeing balancing inquiry be applied.

LA Specialty’s Rules in Question

The employer, a wholesale distributor of produce and other foods, maintained an employee manual with two rules at issue:

  • “Every employee is responsible for protecting any and all information that is used, acquired or added to regarding matters that are confidential and proprietary of [Respondent] including but not limited to client/vendor lists”; and
  • “Employees approached for interview and/or comments by the news media, cannot provide them with any information”, and the company president is “the only person authorized and designated to comment on Company policies or any event that may affect our organization.”

The majority found both rules lawful because when “reasonably interpreted,” the rules do not prohibit or interfere with the exercise of NLRA rights.  The Board did not see how the confidential rule prohibited employees from appealing to customers during a labor dispute (which would have interfered with Section 7 rights), and when reading “client/vendor list” in the context of the other prohibited materials (i.e., “accounting records, work product, production processes, business operations, computer software, computer technology, marketing and development operations”), the Majority found “client/vendor lists” fall under the type of material an employer may lawfully conceal.  In so holding, the majority added that rules prohibiting disclosure of confidential and proprietary customer and vendor lists to Boeing Category 1 for future cases.

In upholding the employer’s media contact rule, the Board held when the rule is read as a whole, it pertains to instances where the media contacts employees and the employees purport to speak on the company’s behalf, even though the rule itself is not so limited to those circumstances.  The majority reasoned because the NLRA does not confer a right for employees to speak to the media on the employer’s behalf, a rule prohibiting an employee from doing so would be lawful.

The Majority and Dissent Spar Over Boeing

Member McFerran sharply disagreed with the majority, and would have found both rules unlawful because they were not narrowly tailored and would have a reasonable tendency to chill employees from exercising Section 7 rights.   McFerran reiterated why she thought Boeing was wrongly decided, criticized the majority’s “clarifications” to Boeing, asserting that the reconfigured balancing test is “far too strict to adequately protect Section 7 rights,” and argued the majority impermissibly flipped the burden of proof on the General Counsel.

Takeaways

The Board’s scrutiny of employer policies to find language that might interfere with employee rights developed into a true cottage industry, oftentimes without any discernible victim of the unfair labor practice.  This decision could change in the coming years.  In the meantime, employers should continue to refer to Boeing and its progeny for guidance as to whether their rules and handbook policies pass muster with the backdrop that the current Board seems more willing to view employers’ rules as lawful.

Specifically, while similar rules may have been previously viewed as overly broad and unlawful, under LA Specialty an employer’s rules that (i) prohibit the sharing of client or vendor lists with third parties; and (ii) prohibit employees from speaking to the media on the employer’s behalf, likely would be found lawful.  However, an employer likely will have gone too far if the rule or policy prohibits (i) employees from appealing to customers or vendors in support of a labor dispute, (ii) the disclosure of names and locations of customers or vendors derived from sources other than the employer’s confidential records, or (iii) employees from speaking to the media in their personal capacity.

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Photo of Mark Theodore Mark Theodore

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice…

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice Group.

Some recent highlights of his career include:

  • Successfully defended client against allegations that it had terminated a union supporter and isolated another. T-Mobile USA, Inc., 365 NLRB No. 15 (2017).
  • Successfully appealed NLRB findings that certain of client’s written policies violated the National Labor Relations Actions Act.  T-Mobile USA, Inc., 363 NLRB No. 171 (2016), enf’d in part, rev’d in part 865 F.3d 265 (5th Cir. 2017).
  • Represented major utility in NLRB proceedings related to organizing of planners.  Secured utility-wide bargaining unit. Bargained on behalf of grocery chain.  After negotiations reached an impasse, guided the company through lawful implementation of five year collective bargaining agreement.
  • Coordinated employer response in numerous strike situations including a work stoppage across 14 western states of the client’s operations.

Mark has extensive experience representing employers in all matters before the NLRB, including representation petitions, jurisdictional disputes and the handling of unfair labor practice charges from the date they are filed through trial and appeal. Mark has acted as lead negotiator for dozens of major companies in a variety of industries, including national, multi-unit, multi-location, multi-employer and multi-union bargaining. Mark has handled lockout and strike situations, coordinating the clients efforts.

In addition, Mark has handled hundreds of arbitrations involving virtually every area of dispute, including contract interest arbitration, contract interpretation, just cause termination/discipline, benefits, pay rates, and hours of work.

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.

Photo of Austin McLeod Austin McLeod

Austin D. McLeod is an associate in the Labor & Employment Law Department. Austin assists clients in a wide range of labor and employment matters, including litigations, administrative proceedings, internal investigations, labor-management relations and claims of discrimination, harassment, retaliation, wrongful termination, defamation, and…

Austin D. McLeod is an associate in the Labor & Employment Law Department. Austin assists clients in a wide range of labor and employment matters, including litigations, administrative proceedings, internal investigations, labor-management relations and claims of discrimination, harassment, retaliation, wrongful termination, defamation, and breach of contract. He represents clients in a variety of industries, including health services, professional sports, real estate, and finance.