NLRB Overturns Obama-Era Initiatives: A Round-Up of the December Decisions

December 2019 brought significant changes to the National Labor Relations Board (NLRB) case law and election procedures. The following highlights a few of those changes as we get into the new year and policy reviews get underway.

Caesars Entertainment, 368 NLRB No. 143 (December 16, 2019) (3-1 decision): Overrules Purple Communications, 361 NLRB 1050 (2014), and returns to the Register Guard, 351 NLRB 1110 (2007) standard, with one exception.

The Board in Caesars Entertainment found the casino’s policy prohibiting the use of company email and other information-technology (IT) resources for nonbusiness purposes was not a violation of the National Labor Relations Act (NLRA). In doing so, the Board emphasized that employers have an indisputable property right to restrict employee use of their equipment. The Board held that under the Register Guard standard, “employees have no statutory right to use employer equipment, including IT resources, for Section 7 purposes … [except] in those rare cases where an employer’s email system furnishes the only reasonable means for employees to communicate with one another.” The Board did not define the scope of the exception but, rather, left it to be decided on a case-by-case basis.

Apogee Retail LLC, 368 NLRB No. 144 (December 17, 2019) (3-1 decision): Overrules Banner Estrella Medical Center, 362 NLRB 1108 (2015).

Apogee challenged the employer’s investigative confidentiality rules—one of which required employees to “‘maintain confidentiality’” regarding workplace investigations into “‘illegal or unethical behavior’” and another prohibiting “‘unauthorized discussion’ of investigations or interviews ‘with other team members.’” Both rules were found lawful under the test established in Boeing Co., 265 NLRB No. 154 (2017).

In Boeing, the Board adopted a two-factor balancing test, which evaluated (1) the nature and extent of the potential impact on NLRA rights; and (2) legitimate justifications associated with the rule. The Boeing Board also created three categories for the review of employer policies: Category 1, representing policies that are lawful to maintain, Category 2, representing policies that require individualized scrutiny, and Category 3, representing policies that are unlawful.

Applying this standard in Apogee, the Board concluded that “investigative confidentiality rules similar to those at issue here but that by their terms apply only to open investigations are categorically lawful under Boeing [Category 1].” However, according to the Board, “investigative confidentiality rules similar to those at issue here and not limited on their face to open investigations belong in Boeing Category 2, requiring individualized scrutiny in each case as to whether any post-investigation adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.”

Further Boeing Decision: Wal-Mart Stores, Inc., 368 NLRB No. 146 (December 16, 2019).

Also relying on the balancing test in Boeing, the Board found two dress code policies permitting employees to wear “small, non-distracting logos or graphics” but limiting the size to “no larger than the size of your [employee] name badge” lawful to the extent they are applied to the selling floor and unlawful to the extent they are applied to areas other than the selling floor. The case stems from long-established Board precedent that employees have a Section 7 right to wear union buttons and other insignia. Here, however, the Board reasoned that the employer’s “legitimate justifications for maintaining the policies—to enhance the customer shopping experience and protect its merchandise from theft or vandalism—outweigh the adverse impact on employee’s Section 7 rights.”

United Parcel Service, Inc., 369 NLRB No. 1 (December 23, 2019) (unanimous decision): Overrules Babcock & Wilcox Construction Co., 361 NLRB 1127 (2014) and reinstates both the Spielberg/Olin postarbitral deferral standard and related prearbitral deferral standards retroactively.

Prior to its decision in Babcock & Wilcox, the Board followed the standard established in Spielberg Mfg. Co., 112 NLRB 1080 (1955), and later refined in Olin Corp., 268 NLRB 573 (1984), wherein post-arbitral deferral was granted “when the arbitral proceedings appear[ed] to be fair and regular, all parties had agreed to be bound,” and the arbitrator’s decision was “not clearly repugnant to the purposes and policies of the Act.” Under the Spielberg/Olin standard, the burden of proof was on the party opposing deferral.

In Babcock & Wilcox, the Board adopted a new deferral standard declaring that if the arbitration procedures appeared to have been fair and regular, and if the parties had agreed to be bound, the Board would defer to an arbitral decision in Section 8(a)(1) and (3) cases only if the party requesting deferral showed that: (1) the arbitrator was explicitly authorized to decide the unfair labor practice issue; (2) the arbitrator was presented with and considered the statutory issue, or was prevented from doing so by the party opposing deferral; and (3) Board law reasonably permits the award. The burden of proving the deferral standard was on the party urging deferral. This decision returns to the Spielberg/Olin standard where the burden of proof falls on the party objecting to deferral.

Valley Hospital Medical Center, 368 NLRB No. 139 (December 16, 2019) (unanimous decision): Overrules Lincoln Lutheran of Racine, 362 NLRB 1655 (2015) and returns to Bethlehem Steel, 136 NLRB 1500 (1962).

Under this decision, consistent with Bethlehem Steel, an employer’s obligation to check off union dues ends with the expiration of the collective bargaining agreement containing the checkoff provision. The Board reasoned that “a dues-checkoff provision properly belongs to the limited category of mandatory bargaining subjects that are exclusively created by the contract and are enforceable … only for the duration of the contractual obligation created by the parties.”

Ambush Election Rules

Finally, on December 13, 2019, the NLRB finalized a rule reversing many of the provisions contained in the “quickie” or “ambush” election rules that went into effect in 2015. The new rule was published on December 18, 2019, and will take effect on April 16, 2020. The new rule expands key deadlines including the pre-election hearing date, requires unions to file responsive position statements, allows more disputed issues to be resolved pre-election, and allows election result certifications to be delayed while appeals are pending.

The Ogletree Deakins’ Traditional Labor Relations Practice Group will continue to monitor and offer insights into the NLRB’s new rules and important decisions. Stay tuned.