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The NLRB’s Scrutiny of Codes of Conduct – How Much Longer Will It Last?

Last year I talked about how the Board was closely scrutinizing — paragraph by paragraph and line by line — employers’ codes of conduct and related policies often contained in employee handbooks.

That hasn’t changed as the Board’s recent decision in Cellco P’ship d/b/a Verizon Wireless & Sara Parrish, 365 NLRB No. 38 (N.L.R.B. Feb. 24, 2017) striking down several confidentiality provisions shows. All along, one member of the Board, Member Miscimarra, has dissented from this aggressive approach and has stated in no uncertain terms that the legal standard for whether a policy is unlawful, asking whether “employees would reasonably construe them to prohibit protected activity,”1 “should be overruled.”2 Well, that member is now the Acting Chairman of the Board and almost certainly represents what will become the prevailing view once a couple of new members are appointed to the Board under the new administration. So the question now is not if the Board’s policy will change, but when?

To a greater extent than many other federal agencies, the National Labor Relations Board has a history of shifting policy sharply depending on which party is in the White House, since a majority of the members of the Board are typically aligned with the President’s party once the President gets an opportunity to make appointments to vacant seats. The Board’s composition is especially important because the NLRB, unlike many, if not most, other federal agencies, acts primarily through case-by-case decision-making as opposed to rulemaking. Because there are two vacant seats on the current Board, as soon as President Trump appoints, and the Senate approves, two new members, Member Miscimarra may find himself at the head of a new Republican-majority voting bloc of the NLRB. Taken together, these considerations mean that when the sole dissenting member of the Board says something like “I believe the [Lutheran Heritage] standard should be overruled by the Board,” we should be paying close attention.

We can predict that the Board will likely adopt Miscamarra’s more lenient approach to codes of conduct, which asks whether a neutral policy (one that doesn’t appear to restrict protected activity under the National Labor Relations Act on its face) is supported by legitimate business concerns that outweigh possible impact on employee rights, rather than only viewing the policy from the employee’s perspective. But we really don’t know exactly when this change will happen. Because the Board acts through decisions, and because new members have not yet been appointed, we have to wait for the right case to come up to the Board after new appointments take their seats. Also, because Obama’s appointment to the General Counsel role (who heads the enforcement arm of the NLRB) will continue until his term expires in November of this year, it is likely that regional offices acting at his direction will continue to bring cases alleging unlawful handbook policies until the Board changes course. So while employers can take comfort knowing that eventually their policies will be vindicated, they should remember that it’s going to take some time.

1 Lutheran Heritage Village–Livonia, 343 N.L.R.B. 646 (2004).
2 Cellco P’ship d/b/a Verizon Wireless & Sara Parrish, 365 NLRB No. 38 (N.L.R.B. Feb. 24, 2017).

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.