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By: Rob Dare – 4/21/16

It seems that every week brings a new NLRB decision that declares workplace conduct rules unlawful (see the previous blog post). Last week was no different, when the majority of the Board held two rules in a Beaumont Hospital surgical services Code of Conduct to be unlawful. However, the decision is particularly noteworthy because a forceful dissent by a Member of the Board called for the abandonment of the decade-old standard used by both the Board and courts to evaluate workplace rules. The Luther Heritage standard (named for the case in which it was announced), provides that employment policies, work rules, and handbook provisions are unlawful if employees “would reasonably construe” the language to prohibit protected activities under Section 7 of the NLRA, which grants employees the right to engage in union organizing, collective bargaining, and other concerted activities for the purpose of mutual aid or protection.

The rules at issue prohibited:

  1. Employee conduct that, in the context of patient care and hospital operation, “impedes harmonious interactions and relationships.”
  2. “Negative or disparaging comments about the moral character or professional capabilities of an employee or physician made to employees, physicians, patients, or visitors.”

According to the majority, the first rule is unlawfully overbroad because it could “encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7.” And the second rule is unlawful because it “would reasonably be construed to prohibit expressions of concerns over working conditions.”

Member Miscimarra, however, explained that in his view, the case (and result) illustrates the problematic nature of the Luther Heritage standard – that it places too much emphasis on the effect that facially neutral work rules have on Section 7 rights, while failing to consider any legitimate reasons employers have for implementing the rules in the first place. Listing the “multiple defects” of the standard, Miscimarra essentially argues that the “single-minded focus” of the “reasonably construe” standard “prevents the Board from giving meaningful consideration to the real world ‘complexities’ associated with many employment policies, work rules, and handbook provisions.” Here, he opines, the two rules helped serve the public interest by protecting patients and family members from needless conflict in hospital settings, but that is ignored under Lutheran Heritage.

The solution, according to Miscimarra, is to replace Luther Heritage with a balancing test where employees’ Section 7 interests are weighed against the employer’s particular business justification for the rule in question. Unpersuaded, the majority replied that a finding that “a particular rule threatens to have a chilling effect does not mean, however, that an employer may not address the subject matter of the rule and protect his legitimate business interests [with a] more narrowly tailored rule that does not infringe on Section 7 rights.”

Thus, Luther Heritage remains the standard that will be applied to employer rules. Accordingly, all employers, unionized or not, should continue to carefully craft and narrowly tailor the language within its handbook, code of conduct, etc. But, we will continue to monitor NLRB decisions and any relevant changes, as Member Miscimarra has provided a powerful road map for future work rule challenges.