In previous issues of The Employment Law Authority, we have stressed that employers must ensure that their handbooks are scrutinized and updated to ensure compliance with the National Labor Relations Act (NLRA) and other federal and state laws. We also have warned that the reconstituted National Labor Relations Board (NLRB) has taken on labor reform and shifted the focus from legislative action to administrative changes. In two recent NLRB decisions, the Board has given merit to both of our forecasts. These deci-sions have shed more light on the types of drastic changes the new Board will undertake.

Employee Handbooks

First, in Jurys Boston Hotel, 356 NLRB No. 114 (March 28, 2011), the NLRB concluded that rules in an employee handbook governing solicitation, loitering and the wearing of emblems, badges and buttons were “ob-jectionable conduct” sufficient to set aside the results of a decertification election – even where there was no evidence that those rules were enforced against employees or actually chilled union activity.

In Jurys, the employer operated a hotel. Following the expiration of a collective bargaining agreement with the hotel employees’ union, Unite Here Local 26, a decertification petition was filed. By all accounts, the union and employer’s interaction were cooperative during the decertification process.

Specifically, before the decertification election, the employer instructed its supervisors to take a “neutral if not positive” position with employees concerning the union. The employer even issued corrective actions to supervisors in response to the union’s complaints of misconduct and sent a letter to its employees noting that its relationship with the union had been “positive.”

Since before the union’s recognition, the employer maintained an employee handbook. While employees were not required to sign an acknowledgment of receipt of the handbook, the handbook was discussed with employees at orientation.

The handbook contained rules governing solicitation, loitering and the wearing of emblems, badges and buttons. The solicitation rule prohibited solicitation and distribution on hotel property. The loitering rule subjected employees to discipline for being in unauthorized areas and/or loitering inside or around the hotel without permission or using guest facilities for personal use. A grooming standards policy prohibited employees from wearing emblems, badges or buttons with messages on them other than employer-issued nametags or official hotel pins. There was no evidence these rules were enforced before or during the election to prohibit protected union activity.

The union did not object to the handbook prior to the decertification petition. After the petition was filed, however, the union filed an unfair labor practice charge alleging that several rules in the employer’s handbook, including the three described above, were unlawful. In response, prior to the election, the employer issued a memo to its employees indicating that the rule governing the wearing of emblems, badges and buttons was ambiguous and was therefore deleted. The solicitation and loitering rules were not changed.

After losing a very close election, the union filed objections regarding the same handbook rules. The Hearing Officer found that the handbook rules governing solicitation, loitering and the wearing of badges and emblems violated Section 8(a)(1) of the NLRA. But he refused to set aside the election, holding that although the rules were objectionable they existed before the employer recognized the union, were not enforced by the employer during the critical period before the election, and were not shown to have deterred any employee from exercising protected rights.

On appeal, the NLRB agreed that the rules regarding solicitation, loitering and the wearing of badges and emblems violated the NLRA. Reversing the Hearing Officer’s decision, however, the Board held that those rules warranted setting aside the decertification election. The Board specifically found that “[e]ach of [the] rules, in force during the critical election period, reasonably tended to interfere with employee free choice,” citing to the closeness of the election as its only support for that holding.

In reaching this result, the Board distinguished previous NLRB precedent in Delta Brands, Inc., 344 NLRB 252 (2005), and Safeway, 338 NLRB 525 (2002), which held that, absent a showing that an employer’s unlawful rule had been enforced or that an employee had been affected by the rule, the mere existence of an unlawful handbook rule does not warrant setting aside an election. Describing these cases as limited to their facts, the Board instead relied on previous precedent in Pacific Beach Hotel, 342 NLRB 372 (2004), and Freund Baking, 336 NLRB 847 (2001), and held that “the mere maintenance of an overbroad rule” warrants overturning an election “because employees could reasonably construe the provision as a directive from their employer that they refrain from engaging in permissible [protected union] activity.”

Only Member Brian Hayes dissented, stating that the majority should have followed binding precedent that required a union to show that the handbook provisions had a reasonable tendency to affect the outcome of the election. He further stated that, while the closeness of an election is a factor to be considered, it is not alone controlling.

Practical Impact: Employers must thoroughly scrutinize their employee handbooks. In other recent decisions, the Board has made it clear that it takes a very expansive view of what constitutes “protected, concerted activity.” Now, with the Jurys decision, the Board has shown that overbroad or ambiguous policies touching on NLRA issues can be used by unions to set aside elections. Attention to handbook policies now clearly is the ounce of pre-vention that will protect against the Board’s later attempt to impose a pound of cure with a re-run election.

Non-Unionized Facility

Aside from the broad handbook policy decision in Jurys, the Board ventured into new, previously uncharted waters by filing a complaint on April 20, 2011 against the Boeing Company alleging that the company violated the NLRA by deciding to transfer a second production line from a union facility in the State of Washington to a non-union facility in South Carolina in retaliation for past and future protected union activity.

The dispute arises from Boeing’s assembly of its 787 Dreamliner airplanes. In 2007, Boeing announced that it planned to assemble its 787 Dreamliner airplanes in a facility in the Puget Sound area of Washington where employees are represented by the International Association of Machinists and Aerospace Workers (IAM). In October 2009, Boeing announced plans for a second 787 assembly line at a non-union facility in South Carolina. Boeing planned on producing seven 787 Dreamliner airplanes a month in Washington, and three per month in South Carolina.

The Board based its complaint on allegations that Boeing executives made public statements connecting their decision to locate some production in South Carolina with the experience of having Washington production disrupted by earlier IAM strikes. Specifically, the Board found that Boeing’s statements “were coercive to employees and its actions were motivated by a desire to retaliate for past strikes and chill future strike activity.”

Boeing has countered that its new facility in South Carolina would handle only new work to meet unexpected demand for its jets, that there would be no adverse affect on any of Boeing’s Washington-based employees, and that wages and work stoppages were the only two issues that Boeing and the IAM had been unable to resolve, despite the parties’ best efforts.

As its remedy, the complaint seeks an order requiring Boeing to maintain the second production line in Washington. The Board’s General Counsel has maintained that this remedy will not require the closure of Boeing’s new South Carolina facility. Boeing strongly disagrees with that opinion.

Practical Impact: We have said it before – the current Board is adopting a “shoot first, ask questions later” approach in protecting employee and union rights. The Boeing matter shows that the General Counsel believes that the Board’s power to remedy potentially unlawful conduct is broad – going so far as to potentially prohibit employers from giving preference to non-unionized plants over unionized plants despite compelling business reasons. Any employer that plans on moving or expanding work to a non-union location must carefully plan its approach for doing so, and carefully scrutinize any public communication about the move or expansion to ensure that it is not potentially stepping on an NLRB landmine.


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Traditional Labor Relations

The attorneys in Ogletree Deakins’ Traditional Labor Practice Group have vast experience in complex and sophisticated traditional labor law matters. This includes experience advising and representing employers of all sizes and across virtually all industries in connection with union representation campaigns, collective bargaining negotiations, strike preparations, labor arbitrations, and National Labor Relations Board proceedings.

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