McLaren Macomb and Local 40 RN Staff Council, Office and Professional Employees, International Union (OPEIU), AFL–CIO. Case 07–CA– 263041

February 21, 2023

DECISION AND ORDER

BY CHAIRMAN MCFERRAN AND MEMBERS KAPLAN, WILCOX AND PROUTY

On August 31, 2021, Administrative Law Judge Robert A. Ringler issued the attached decision.  The Respondent filed exceptions and a supporting brief, and the General Counsel filed an answering brief. The General Counsel filed exceptions and a supporting brief, and the Respondent filed an answering brief.  The Charging Party filed an answering brief in support of the General Counsel’s exceptions and in opposition to the Respondent’s exceptions. 

The National Labor Relations Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions only to the extent consistent with this Decision and Order.^[1][2][3][4]

The main issue presented is whether the Respondent violated Section 8(a)(1) of the National Labor Relations Act (Act) by offering a severance agreement to 11 bargaining unit employees it permanently furloughed.  The agreement broadly prohibited them from making statements that could disparage or harm the image of the Respondent and further prohibited them from disclosing the terms of the agreement.  Agreements that contain broad proscriptions on employee exercise of Section 7 rights have long been held unlawful because they purport to create an enforceable legal obligation to forfeit those rights.  Proffers of such agreements to employee have also been held to be unlawfully coercive.  The Board in Baylor University Medical Center² and IGT d/b/a International Game Technology³ reversed this long-settled precedent and replaced it with a test that fails to recognize that unlawful provisions in a severance agreement proffered to employees have a reasonable tendency to interfere with, restrain, or coerce the exercise of employee rights under Section 7 of the Act. We accordingly overrule Baylor and IGT and, upon careful analysis of the terms of the nondisparagement and confidentiality provisions at issue here, we find them to be unlawful, and thus find the severance agreement proffered to employees unlawful.

I.

The Respondent operates a hospital in Mt. Clemens, Michigan, where it employs approximately 2300 employees. After an election on August 28, 2019, the Board certified Local 40 RN Staff Council, Office of Professional Employees International Union (OPEIU), AFL–CIO (Union) as the exclusive collective-bargaining representative of a unit of approximately 350 of the Respondent’s service employees.  Following the onset of the Coronavirus Disease 2019 (Covid-19) pandemic in March 2020,^[5] the government issued regulations prohibiting the Respondent from performing elective and outpatient procedures and from allowing nonessential employees to work inside the hospital.  The Respondent then terminated its outpatient services, admitted only trauma, emergency, and Covid-19 patients, and temporarily furloughed 11 bargaining unit employees because they were deemed nonessential employees.^[6]  In June, the Respondent permanently furloughed those 11 employees^[7]and contemporaneously presented each of them with a “Severance Agreement, Waiver and Release” that offered to pay differing severance amounts to each furloughed employee if they signed the agreement.  All 11 employees signed the agreement.  The agreement required the subject employee to release the Respondent from any claims arising out of their employment or termination of employment.  The agreement further contained the following provisions broadly prohibiting disparagement of the Respondent and requiring confidentiality about the terms of the agreement:

6. Confidentiality Agreement. The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse, or as necessary to professional advisors for the purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction.
7. Non-Disclosure. At all times hereafter, the Employee promises and agrees not to disclose information, knowledge or materials of a confidential, privileged, or proprietary nature of which the Employee has or had knowledge of, or involvement with, by reason of the Employee’s employment.  At all times hereafter, the Employee agrees not to make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives.

The agreement provided for substantial monetary and injunctive sanctions against the employee in the event the nondisparagement and confidentiality proscriptions were breached:

8. Injunctive Relief. In the event that Employee violates the provisions of paragraphs 6 or 7, the Employer is hereby authorized and shall have the right to seek and obtain injunctive relief in any court of competent jurisdiction. If Employee individually or by his/her attorneys or representative(s) shall violate the provisions of paragraph 6 or 7, Employee shall pay Employer actual damages, and any costs and attorney fees that are occasioned by the violation of these paragraphs.

The Respondent neither gave the Union notice that it was permanently furloughing the 11 employees nor an opportunity to bargain regarding that decision and its effects.  The Respondent also did not give the Union notice that it presented the severance agreement to the employees, nor did it include the Union in its discussions with the employees regarding their permanent furloughs and the severance agreement.  Thus, the Respondent entirely bypassed and excluded the Union from the significant workplace events here: employees’ permanent job loss and eligibility for severance benefits.

II.

The judge found, and we agree for the reasons set forth in his decision, that the Respondent violated Section 8(a)(5) and (1) of the Act by permanently furloughing the 11 employees without first notifying the Union and giving it an opportunity to bargain about the furlough decision and its effects.  The judge properly found that the Respondent had not met its burden under RBE Electronics of S.D., Inc.⁷ of establishing an economic exigency compelling prompt action that excused its failure to satisfy its bargaining obligation.⁸  We further agree with the judge’s finding, as set forth in his decision, that the Respondent violated Section 8(a)(5) and (1) of the Act by communicating and directly dealing with the 11 employees to enter into the severance agreement, while entirely bypassing and excluding the Union.  However, for the reasons set forth below, we reverse the judge’s finding under Baylor and IGT that the Respondent did not violate Section 8(a)(1) of the Act by proffering the severance agreement to the permanently furloughed employees.

III.

The gravamen of the General Counsel’s amended complaint is that the nondisparagement and confidentiality provisions of the severance agreement unlawfully restrain and coerce the furloughed employees in the exercise of their Section 7 rights.⁹  Applying Baylor and IGT, the judge found these provisions to be lawful, and thus concluded that the severance agreement was lawful and that the proffer of the agreement to the furloughed employees was lawful.  The General Counsel excepts to the dismissal and argues, among other things, that the Board should overrule Baylor and IGT.  We agree.

Until Baylor, when faced with an allegation that a severance agreement violated the Act, Board precedent focused on the language of the severance agreement to determine whether proffering the agreement had a reasonable tendency to interfere with, restrain, or coerce employees’ exercise of their Section 7 rights.^[8][9] For example, in Metro Networks, the Board specifically analyzed the nonassistance and nondisclosure provisions of the severance agreement at issue and found that “the plain language of the severance agreement would prohibit [employee] Brocklehurst from cooperating with the Board in important aspects of the investigation and litigation of unfair labor practice charges.” 336 NLRB at 67.  The Board accordingly concluded that the proffer of the severance agreement to Brocklehurst was unlawful.  Id., at 65–67. In Clark Distribution Systems, the Board likewise carefully scrutinized the language of the confidentiality provision contained in the severance agreement offered to employees.  The Board found that the language of the provision prohibited employees from participating in the Board’s investigative process, and thus, that the proffer of the severance agreement was unlawful. 336 NLRB at 748–749.  More recently, in Shamrock Foods Co., the Board found that a separation agreement proffered to an employee that contained confidentiality and non-disparagement provisions was unlawful.  The Board, citing and analyzing the specific language of the provisions, found the agreement unlawful because the provisions “broadly required” the employee to whom it was proffered “to waive certain Sec[tion] 7 rights.” Specifically, the separation agreement prevented him from assisting his former co-workers, disclosing information to the Board, and making disparaging remarks which could be detrimental to the employer.  366 NLRB No. 117, slip op. at 3 fn. 12. 

In none of these cases was the presence of additional unlawful conduct by the employer necessary to find that the plain language of the agreement violated the Act.^[10]Rather, the Board treated the legality of a severance agreement provision as an entirely independent issue.  What mattered was whether the agreement, on its face, restricted the exercise of statutory rights.^[11] 

In Baylor, the Board abandoned examination and analysis of the severance agreement at issue.  Baylor shifted focus instead to the circumstances under which the agreement was presented to employees.  The Baylor Board held that the Respondent did not violate the Act by the “mere proffer” of a severance agreement that required the signer to agree not to “pursue, assist, or participate in any [c]laim” against Baylor and to keep a broad swath of information confidential. Baylor, supra, slip op. at 1.  The Board reasoned that the agreement was not mandatory, pertained exclusively to post-employment activities and, therefore, had no impact on terms and conditions of employment, and there was no allegation that anyone offered the agreement had been unlawfully discharged or that the agreement was proffered under circumstances that would tend to infringe on Section 7 rights.  Id., slip op. at 1–2.  The Baylor Board overruled prior decisions to the extent they held to the contrary:

Clark Distribution Systems is overruled to the extent it holds that it is invariably unlawful to offer employees a severance agreement that includes a nonassistance clause. Instead, the holding of Clark is limited to the fact pattern that case presents, where an employer offers such an agreement to one or more employees it has discharged in violation of the Act. And Metro Networks, supra, and Shamrock Foods, supra, are also limited accordingly. 

369 NLRB No. 143, slip op. at 2 fn. 6.

Only a few months later, in IGT, the Board again dismissed an allegation that the respondent maintained an unlawful nondisparagement provision in the severance agreement it offered to separated employees.  The provision required the signer to agree not to “disparate or discredit IGT or any of its affiliates, officers, directors and employees.”  IGT, supra, slip op. at 1. Citing Baylor, the Board again reasoned that the agreement was “entirely voluntary, does not affect pay or benefits that were established as terms of employment, and has not been proffered coercively.”  Id., slip op. at 2.^[12]  The IGT Board underscored that Baylor had “overruled” Shamrock Foods, Clark Distribution Systems, and Metro Networks.^[13] 

As discussed below, Baylor and IGT are flawed in multiple respects.  We therefore overrule both decisions and return to the prior, well-established principle that a severance agreement is unlawful if its terms have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights, and that employers' proffer of such agreements to employees is unlawful. In making that determination we will examine, as pre-Baylor precedent did, the language of the agreement, including whether any relinquishment of Section 7 rights is narrowly tailored.

Notably absent from either Baylor or IGT was any analysis of the specific language in the challenged provisions of the severance agreements.  That is because, under those decisions, an employer’s mere proffer to employees of a severance agreement with unlawful provisions cannot be unlawful.  Under Baylor, coercive language cannot have a reasonable tendency to coerce employees unless it is also proffered in circumstances deemed coercive, independent of the agreement itself. See IGT, slip op. at 2; Baylor, slip op. at 1–2. In this respect the Baylor Board “entirely failed to consider an important aspect of the problem,” making its decision arbitrary under the Supreme Court’s standard in Motor Vehicle Manufacturers Assn. v. State Farm Auto Mutual Insurance Co., 463 U.S. 29, 43 (1983). 

The Baylor test arbitrarily adopts a two-factor analysis for finding that a severance agreement violates Section 8(a)(1) of the Act.  First, it requires the employer proffering the severance agreement to have discharged its recipient in violation of the Act, or committed another unfair labor practice discriminating against employees under the Act.^[14] Baylor thus held that absent such unlawful coercive circumstances, an employer is entirely free to proffer any provision, even a facially unlawful one.  The Board did not explain what legitimate employer interest is served by permitting that step, which reasonably could result in the employee’s acceptance of the agreement (and its unlawful provisions) and, in turn, the employee’s decision not to violate the agreement by exercising Section 7 rights.  Nor did the Board offer a persuasive reason to find that an agreement with an unlawful provision has no reasonable tendency to coerce employees unless the employer has a proclivity to violate the Act otherwise or has violated the Act or infringed on employees’ Section 7 rights while carrying out actions surrounding the provision of the severance agreement.  The presence of such exacerbating circumstances certainly enhances the coercive potential of the severance agreement.  But the absence of such behavior does not and cannot eliminate the potential chilling effect of an unlawful severance agreement on the exercise of Section 7 rights. And yet, the standard set by Baylor does nothing to protect employees confronted with patently coercive severance agreements, if their employer has not otherwise violated the Act.^[15]

Second, the Baylor test is incorrectly premised on the contention that employer animus towards the exercise of Section 7 rights is a relevant component of an allegation that provisions of a severance agreement violate Section 8(a)(1) of the Act. The Board in Baylor justified its refusal to find a violation of the Act on grounds that “[t]here is no reason to believe that the Respondent harbors animus against Sec. 7 activity, let alone that it is willing to terminate employees who engage in it.  Under these circumstances, the offer of a severance agreement does not reasonably tend to interfere with the free exercise of employee rights under the Act[.]”) (emphasis in original).  369 NLRB No. 43, slip op. at 2, fn. 6. The IGT majority made the same finding.^[16]

But whether an employer harbors animus against Section 7 activity is irrelevant to the long-established objective test for determining whether Section 8(a)(1) of the Act is violated.  “It is well settled that the test of interference, restraint, and coercion under Section 8(a) (1) of the Act does not turn on the employer's motive or on whether the coercion succeeded or failed. The test is whether the employer engaged in conduct which, it may reasonably be said, tends to interfere with the free exercise of employee rights under the Act.” American Freightways Co., Inc., 124 NLRB 146, 147 (1959).  Consistent with Section 8(a)(1) law generally, evaluation of the tendency of a severance agreement to coerce (and therefore its lawfulness) does not involve inquiring, as did the Board in Baylor and IGT, whether employer animus surrounds or infects the circumstances surrounding the offer of the severance agreement. The Baylor Board offered no justification for its consideration of animus and discrimination apart from the terms of the severance agreement, which altered the long-established construction of Section 8(a)(1) of the Act.^[17] 

Indeed, neither Baylor nor the IGT majority attempted to articulate any policy considerations that would justify its severely constricted view of Section 7 rights.  The IGT majority reasons that because some employee waivers of Section 7 rights are permissible, no waivers can be facially unlawful, but this is a non sequitur.  Whether or not employees view employer documents through the prism of Section 7 rights (a proposition questioned by the IGT majority), the Board must do so when the General Counsel issues a complaint alleging that a severance agreement violates employee Section 7 rights. Because both Baylor and the IGT majority fail this test, we overrule them.

IV.

Baylor and the IGT majority ignore well-established precedent concerning waiver of employee rights. The Board does not write on a clean slate regarding employee waiver of Section 7 rights via a severance agreement.  There is a backdrop of nearly a century of settled law that employees may not broadly waive their rights under the NLRA.^[18]  Agreements between employers and employees that restrict employees from engaging in activity protected by the Act,^[19] or from filing unfair labor practice charges with the Board, assisting other employees in doing so, or assisting the Board’s investigative process,²¹ have been consistently deemed unlawful. The “future rights of employees as well as the rights of the public may not be traded away” in a manner which requires “forebearance from future charges and concerted activities.”²² This broad proscription underscores that the Board acts in a public capacity to protect public rights to give effect to the declared public policy of the Act.  See National Licorice Co. v. NLRB, supra, 309 U.S. at 362-364.²³ 

The broad scope and the wide protection afforded employees by Section 7 of the Act bear repeating. “It is axiomatic that discussing terms and conditions of employment with coworkers lies at the heart of protected Section 7 activity.” St. Margaret Mercy Healthcare Centers, 350 NLRB 203, 205 (2007), enfd. 519 F.3d 373 (7th Cir. 2008).  Section 7 rights are not limited to discussions with coworkers, as they do not depend on the existence of an employment relationship between the employee and the employer,²⁴ and the Board has repeatedly affirmed that such rights extend to former employees.²⁵  It is further long-established that Section 7 protections extend to employee efforts to improve terms and conditions of employment or otherwise improve their lot as employees through channels outside the immediate employeeemployer relationship. See Eastex, Inc. v. NLRB, 437 U.S. 556, 565 (1978). These channels include administrative, judicial, legislative, and political forums,²⁶ newspapers,²⁷ the media,²⁸ social media,^[20] and communications to the public that are part of and related to an ongoing labor dispute.^[21]  Accordingly, Section 7 affords protection for employees who engage in communications with a wide range of third parties in circumstances where the communication is related to an ongoing labor dispute and when the communication is not so disloyal, reckless, or maliciously untrue to lose the Act's protection.  See NLRB v. Electrical Workers Local 1229 (Jefferson Standard Broadcasting Co.), 346 U.S. 464, 477 (1953).^[22] 

The Board is tasked with safeguarding the integrity of its processes for employees exercising their Section 7 rights.^[23]  “Congress has made it clear that it wishes all persons with information about [unfair labor] practices to be completely free from coercion against reporting them to the Board.” Nash v. Florida Industrial Comm'n, 389 U.S. 235, 238 (1967). “This complete freedom is necessary . . . ‘to prevent the Board's channels of information from being dried up by employer intimidation of prospective complainants and witnesses.’” NLRB v. Scrivener, 405 U.S. 117, 122 (1972), quoting John Hancock Mut. Life Ins. Co. v. NLRB, 191 F.2d 483, 485 (1951).  “It is also consistent with the fact that the Board does not initiate its own proceedings; implementation is dependent ‘upon the initiative of individual persons.’” NLRB v. Scrivener, 405 U.S at 122, quoting Nash v. Florida Industrial Comm'n, supra, 389 U.S. at 238.  The Board’s “‘ability to secure vindication of rights protected by the Act depends in large measure upon the ability of its agents to investigate charges fully to obtain relevant information and supporting statements from individuals[,]’” and “such investigations often rely heavily on the voluntary assistance of individuals in providing information.” Metro Networks, supra, 336 NLRB at 67, quoting Certain-Teed Products, 147 NLRB 1517, 1519–1520 (1964) and citing NLRB v. Scrivener, supra, 405 U.S at 122.

It is through the lens of this broad grant of rights and the Board’s duty to protect them that the Board scrutinizes a severance agreement containing provisions alleged to violate Section 8(a)(1) of the Act.  Inherent in any proffered severance agreement requiring workers not to engage in protected concerted activity is the coercive potential of the overly broad surrender of NLRA rights if they wish to receive the benefits of the agreement.³³ Accordingly, we return to the approach followed by Board precedent before Baylor, and hold that an employer violates Section 8(a)(1) of the Act when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights.^[24] Such an agreement has a reasonable tendency to restrain, coerce, or interfere with the exercise of Section 7 rights by employees, regardless of the surrounding circumstances.

Certainly such surrounding circumstances may enhance the reasonable tendency of the severance agreement to coerce employees, but that tendency does not depend on them.^[25] Where an agreement unlawfully conditions receipt of severance benefits on the forfeiture of statutory rights, the mere proffer of the agreement itself violates the Act, because it has a reasonable tendency to interfere with or restrain the prospective exercise of Section 7 rights, both by the separating employee and those who remain employed.^[26]  Whether the employee accepts the agreement is immaterial. As the Board explained in Metro Networks, the employer’s “proffer of the severance agreement . . . constitutes an attempt to deter [the employee] from assisting the Board” and the employee’s “conduct in not signing the agreement [did] not render the [employer’s] conduct lawful.”  336 NLRB at 67 fn. 20 (emphasis in original).³⁷ If the law were to the contrary, it would create an incentive for employers to proffer severance agreements with unlawful provisions to employees.  Only if the employee signed the agreement, subjected herself to its unlawful requirements, and then came to the Board would the Board be able to address the situation, belatedly.  No policy of the Act is served by creating this obstacle to the effective protection of Section 7 rights. In fact, under established standards, no showing of actual coercion is required to prove a violation of Section 8(a)(1) of the Act.  Rather, it is the high potential that coercive terms in separation agreements may chill the exercise of Section 7 rights that dictates the Board’s traditional approach of viewing severance agreements requiring the forfeiture of Section 7 rights— whether accepted or merely proffered—as unlawful unless narrowly tailored.³⁸ 

V.

Examining the language of the severance agreement here, we conclude that the nondisparagement and confidentiality provisions interfere with, restrain, or coerce employees’ exercise of Section 7 rights.  Because the agreement conditioned the receipt of severance benefits on the employees’ acceptance of those unlawful provisions, we find that the Respondent’s proffer of the agreement to employees violated Section 8(a)(1) of the Act. 

The nondisparagement provision on its face substantially interferes with employees’ Section 7 rights.  Public statements by employees about the workplace are central to the exercise of employee rights under the Act.^[27] Yet the broad provision at issue here prohibits the employee from making any “statements to [the] Employer’s employees or to the general public which could disparage or harm the image of [the] Employer”—including, it would seem, any statement asserting that the Respondent had violated the Act (as by, for example, proffering a settlement agreement with unlawful provisions).  This farreaching proscription—which is not even limited to matters regarding past employment with the Respondent— provides no definition of disparagement that cabins that term to its well-established NLRA definition under NLRB v. Electrical Workers Local 1229 (Jefferson Standard Broadcasting Co.), supra, 346 U.S. at 477. Instead, the comprehensive ban would encompass employee conduct regarding any labor issue, dispute, or term and condition of employment of the Respondent.  As we explained above, however, employee critique of employer policy pursuant to the clear right under the Act to publicize labor disputes is subject only to the requirement that employees' communications not be so “disloyal, reckless or maliciously untrue as to lose the Act's protection.” Emarco, Inc., 284 NLRB 832, 833 (1987).^[28] 

Further, the ban expansively applies to statements not only toward the Respondent but also to “its parents and affiliated entities and their officers, directors, employees, agents and representatives.” The provision further has no temporal limitation but applies “[a]t all times hereafter.” The end result is a sweepingly broad bar that has a clear chilling tendency on the exercise of Section 7 rights by the subject employee.  This chilling tendency extends to efforts to assist fellow employees, which would include future cooperation with the Board’s investigation and litigation of unfair labor practices with regard to any matter arising under the NLRA at any time in the future, for fear of violating the severance agreement’s general proscription against disparagement and incurring its very significant sanctions. The same chilling tendency would extend to efforts by furloughed employees to raise or assist complaints about the Respondent with their former coworkers, the Union, the Board, any other government agency, the media, or almost anyone else.^[29]  In sum, it places a broad restriction on employee protected Section 7 conduct.^[30] We accordingly find that the proffer of the nondisparagement provision violates Section 8(a)(1) of the Act.^[31] 

Our scrutiny of the confidentiality provision of the severance agreement leads to the same conclusion. The provision broadly prohibits the subject employee from disclosing the terms of the agreement “to any third person.” (Emphasis supplied.)^[32]  The employee is thus precluded from disclosing even the existence of an unlawful provision contained in the agreement.  This proscription would reasonably tend to coerce the employee from filing an unfair labor practice charge or assisting a Board investigation into the Respondent’s use of the severance agreement, including the nondisparagement provision.  Such a broad surrender of Section 7 rights contravenes established public policy that all persons with knowledge of unfair labor practices should be free from coercion in cooperating with the Board.^[33]  The confidentiality provision has an impermissible chilling tendency on the Section 7 rights of all employees because it bars the subject employee from providing information to the Board concerning the Respondent’s unlawful interference with other employees’ statutory rights. See Metro Networks, supra, 336 NLRB at 67.

The confidentiality provision would also prohibit the subject employee from discussing the terms of the severance agreement with his former coworkers who could find themselves in a similar predicament facing the decision whether to accept a severance agreement.  In this manner, the confidentiality provision impairs the rights of the subject employee’s former coworkers to call upon him for support in comparable circumstances. Additionally encompassed by the confidentiality provision is discussion with the Union concerning the terms of the agreement, or such discussion with a union representing employees where the subject employee may gain subsequent employment, or alternatively seek to participate in organizing, or discussion with future co-workers.^[34]  A severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment.  Id.  Conditioning the benefits under a severance agreement on the forfeiture of statutory rights plainly has a reasonable tendency to interfere with, restrain, or coerce the exercise of those rights. unless it is narrowly tailored to respect the range of those rights.  Our review of the agreement here plainly shows that not to be the case.^[35]  We accordingly find that the proffer of the confidentiality provision violates Section 8(a)(1) of the Act.^[36]

VI.

Our main disagreement with the dissent’s adherence to Baylor and IGT is the refusal in those cases to analyze the terms of the severance agreements which are the very subject of the alleged unlawful proffer to recipient employees.  The dissent instead focuses solely on other surrounding circumstances as the sole determinant of whether the severance agreement’s proffer is unlawful.

The dissent asserts that Baylor and IGT are not contrary to long-standing Board precedent analyzing the legality of severance agreements.  However, as we have explained above, Board precedent from Phillips Pipe Line in 1991, to Clark Distribution Systems and Metro Networks in 2001, through Shamrock Foods in 2018, all carefully scrutinized the language of the severance agreements to determine whether their proffer to employees was unlawful.  Thus, contrary to our dissenting colleague’s assertion otherwise, the case law clearly shows that Baylor and IGT are at odds with longstanding Board precedent. 

Our dissenting colleague attempts to justify the departure from this long-standing precedent by contending that the outcome in those pre-Baylor pre-IGT cases turned on the presence of unlawful conduct in addition to the proffer of the severance agreement at issue.  To the contrary, none of the cases we have cited link the analysis of—in the words of Metro Networks—the “plain language” of the severance agreement to the presence or absence of additional unlawful conduct or other circumstances, as we have explained above in full.  Rather, the analysis of the lawfulness of the proffer of the severance agreement in these cases was entirely independent of the Board’s consideration of other alleged unfair labor practices. See Shamrock Foods Co., 366 NLRB No. 117; Clark Distribution Systems, 336 NLRB 747; Metro Networks, 336 NLRB 63; Phillips Pipe Line Co., 302 NLRB 732. ^[37]

The dissent erroneously contends that the holdings of Baylor and IGT were limited to severance agreements with “facially neutral” provisions. However, that term appears nowhere in either Baylor or IGT. Neither of those cases made any distinction among the types of provisions that might be the subject of an unlawful proffer.  They did not, and, of course, could not, because they never examined the language of the provisions. 

Our dissenting colleague further seeks to distance himself from the limitations Baylor and IGT placed on the types of unfair labor practices that would warrant finding a proffer unlawful.  The IGT majority found that an unlawful refusal to bargain over a subcontracting decision—a violation of Section 8(a)(5)—and an unlawful threatening of employees with a loss of overtime—a violation of Section 8(a)(1)—were insufficient to find an unlawful proffer, holding “such violations do not support a finding that the Respondent has discriminated against employees for engaging in Sec[tion] 7 activity.” IGT, slip op. at 2 fn. 7.  That our dissenting colleague in the instant case is willing to find an unlawful proffer based on the Section 8(a)(5) direct dealing violation does not make our analysis of IGT and Baylor erroneous.  As we explained above, Baylor and IGT would find a violation only where the proffer was made to an unlawfully discharged employee, or where the respondent has discriminated against employees—findings that require a showing of animus directed toward Section 7 activity.^[38]

Finally, the dissent claims our analysis of the provisions of the severance agreement proffered to the employees in this case is erroneous because it is a workrules analysis.  We have not applied a work rules analysis here.  We have applied long-standing precedent analyzing severance agreements.^[39]

In sum, our decision today overrules Baylor and IGT, restores prior law embodied in cases like Clark Distribution Systems which examine the facial language of proffered severance agreement, and finds the proffer of the severance agreement unlawful in this case because the language itself restricts Section 7 rights, without regard to the commission of additional unfair labor practices or other external circumstances.  That the dissent declines to pass on the lawfulness of the facial language here, finding it “not necessary to decide the case,” entirely ignores that under Baylor and IGT, the Board will never have occasion to analyze the language of a proffered severance agreement. Contrary to the dissent, our holding today overruling that approach is not dicta, but a return to a principled analysis of the proffer of severance agreements to employees who reasonably may be concerned with their Section 7 rights.^[40]

VII.

Baylor granted employers carte blanche to offer employees severance agreement that include unlawful provisions.  That cannot be correct under the Act, a statute designed to protect employees in the exercise of their rights.  For all the reasons explained above, the Board’s approach in Baylor must be abandoned.   

*.  *.  *

MEMBER KAPLAN, dissenting in part.

The Respondent, without giving the Union notice and an opportunity to bargain, permanently furloughed 11 employees while they were already on an unchallenged temporary furlough and, excluding the Union, directly dealt with them to enter into severance agreements. I agree with my colleagues that the Respondent’s conduct in these regards violated Section 8(a)(5) and (1).¹ I also agree with my colleagues and the General Counsel that, in light of this unlawful conduct, the Respondent’s offering the severance agreements containing the nondisparagement and confidentiality provisions was unlawful under Baylor University Medical Center, 369 NLRB No. 43 (2020), and IGT d/b/a International Game Technology, 370 NLRB No. 50 (2020). Despite the fact that extent law is sufficient to resolve this matter, my colleagues take this opportunity, not raised by the General Counsel until her Brief in Support of Exceptions to the Board, to address circumstances not present in this case and overrule the sound law of Baylor and IGT. On this aspect of their decision, I dissent.

The Board Should Retain the Analysis Set Forth in Baylor and IGT

In Baylor and IGT, the Board addressed whether the mere proffer by an employer of severance agreements containing non-disparagement, non-assistance, and confidentiality provisions interfere with, restrain, or coerce employees in the exercise of their rights under the Act. The Board concluded that, absent outside circumstances that could render the proffers coercive, the mere action of offering these agreements to former employees does not constitute a violation of the Act. See IGT, 370 NLRB No. 50, slip op. at 2; Baylor, 369 NLRB No. 43, slip op. at 1-2.

The Board’s analysis in these cases centered on several factors. First, the Board considered whether that the General Counsel was alleging that the severance agreement itself was unlawful.² Baylor, 369 NLRB No. 43, slip. op at 1. Next, the Board concluded that because severance agreements were not analogous to work rules, the analysis for interpreting facially neutral work rules under Boeing³ was not applicable.⁴ In so finding, the Board reasoned that employees’ decision whether or not to accept severance benefits in these circumstances was entirely voluntary, absent evidence of separate unlawful conduct on the part of the Respondent that would render the proffers unlawful. IGT, 370 NLRB No. 50, slip op. at 2; Baylor, 369 NLRB slip. op at 2 & fn. 6 (“There is no reason to believe that the [r]espondent harbors animus against Sec. 7 activities,” let alone that it would retaliate against employees who exercised those rights.) The Board also recognized that, in the absence of any prior instance in which the employer had attempted to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights, there would be no reason for an employee to believe that the employer would invoke the agreement in response to the employee’s exercise of her Section 7 rights. This is particularly so given the Board’s recognition that employees do not “view every employer document through the prism of Section 7.” IGT, 370 NLRB No. 50, slip op. at 2 fn. 8 (quoting L.A. Specialty Produce Co., 368 NLRB No. 93, slip op. at 2 (2019) (citing T-Mobile USA, Inc. v. NLRB, 865 F.3d 265, 271 (5th Cir. 2017))). Finally, the Board reasoned that, unlike agreements pertaining to employees’ former terms and conditions of employment, severance agreements do not, nor do they have the potential to, affect employees’ pay or benefits or any other terms of employment that were in place before the employees were discharged. See IGT, 370 NLRB No. 50, slip op. at 2; Baylor, 369 NLRB No. 43, slip op. at 1-2. Consistent with my prior votes in Baylor and IGT, I find that this is the proper standard to apply in deciding whether an employer’s mere proffer of voluntary severance agreements violates the Act.

My Colleagues’ Justification for Overruling Baylor and IGT Is Based on an Incorrect, or Speculative, Interpretation of those Cases

My colleagues’ decision that Baylor and IGT must be overruled is based on a few fundamental misunderstandings of the Board’s holdings in in Baylor and IGT.

To begin, my colleagues repeatedly assert that Baylor and IGT must be reversed because they were in conflict with “long-standing precedent.” However, none of the cases cited by my colleagues involved the circumstances at issue in Baylor and IGT; to the contrary, in the three cases they cite where the Board found that an employer violated the Act by proffering a severance agreement, the employer had engaged in unlawful conduct in addition to the proffering of the severance agreement at issue.⁵ Accordingly, under Baylor and IGT, the proffering of those severance agreements would still be unlawful. See Shamrock Foods Co., 366 NLRB No. 117, slip op. at 3 fn. 12 (2018) (finding maintenance of separation agreement unlawful because, among other reasons, the employee had been unlawfully discharged), enfd. 779 Fed. Appx. 752 (D.C. Cir. 2019) (per curium); Metro Networks, 336 NLRB 63, 66-67 (2001) (same); Clark Distribution Systems, 336 NLRB No. 117 (finding employer that committed additional violations of the Act unlawfully conditioned severance benefits on an agreement not to participate in Board processes). As a result, far from running counter to “long-settled precedent,” Baylor and IGT did not overturn the decisions in those cases, but merely declined to continue to apply the overbroad holdings contained therein to cases involving a significantly different factual scenario.

Next, the majority erroneously asserts that the Baylor and IGT decisions require an unlawful discharge or other unfair labor practices for the proffer to be a violation. As explained above, however, the standard set forth in Baylor and IGT examines if there are circumstances external to a severance agreement that render its proffer objectively coercive. Unlawful discharges or other unfair labor practices occurring before the severance agreement certainly would be the most likely scenario for finding such an agreement unlawful under Baylor, but the standard is not limited in such a way. And nowhere is there any suggestion that an employer must exhibit animus against Section 7 activity for there to be a violation.⁶ To the contrary, in the instant case, I am finding that the 8(a)(5) and (1) direct-dealing violation committed by the Respondent--a violation that does not require a finding of animus--is sufficient to create an atmosphere in which the Respondent’s proffer of the settlement agreements was objectively coercive.

But regardless, the majority’s position that an employer’s intent is not relevant to determining whether a reasonable employee would be coerced under the Act misses the point. Baylor and IGT have nothing to do with an employer’s intent. Rather, the entire issue is evaluating whether a reasonable employee would find that the proffer of the settlement agreement would interfere with, retrain, or coerce them in the exercise of their Section 7 rights. And, as the majority concedes, the presence of prior conduct suggesting a proclivity to violate the Act would affect the way in which employees would interpret the severance agreement.

Second, the majority writes from the puzzling assumption that because, in their view, the provisions in the severance agreements are themselves facially unlawful, Baylor and IGT were absurdly deciding whether the proffer of unlawful provisions was unlawful. This is not the case. Neither Baylor nor IGT analyzed the severance agreements at issue in those cases as if they were equivalent to work rules. My colleagues’ analysis searching for coercion in the facial overbreadth of specific severance-agreement provisions is indistinguishable from a work-rules analysis. But, as the Board found in Baylor and IGT, facially neutral severance agreements are inherently less coercive than facially neutral work rules and warrant a different analysis looking at whether the circumstances of the proffer were coercive rather than analyzing the language itself.⁷

Finally, my colleagues repeatedly state that the holdings in Baylor and IGT established that “an employer is entirely free to proffer any provision, even a facially unlawful one” and “granted employers carte blanche to offer employees severance agreements that include unlawful provisions.” With respect, although my colleagues may speculate about the breadth of the holding in those cases, the Board has never applied those cases to find facially unlawful severance agreement provisions lawful. In both Baylor and IGT, the severance agreements at issue were facially neutral. Indeed, in IGT, the Board expressly addressed this concern, noting that a work rule containing identical language to that contained in the severance agreement had been found lawful in another case. IGT, 370 NLRB No. 50, slip. op. at 2 fn.8 (citing Motor City Pawn Brokers Inc., 369 NLRB No. 132, slip op. at 5-7 (2020)). My colleagues’ assertion that a future Board would apply Baylor and IGT to find that employers may lawfully proffer severance agreements that specifically and expressly require the waiver of Section 7 rights is pure speculation. And pure speculation does not provide a reasonable justification for overruling Board precedent.⁸

The Majority’s Justification for Finding a Violation in this Case Contains Additional Errors

Even assuming that the act of proffering a facially neutral, totally voluntary severance agreement should be analyzed by the same standards as the maintenance of facially neutral work rules, my colleagues arbitrarily fail to apply current Board law in analyzing the severance agreements at issue in this case.⁹ The current standard for evaluating whether facially neutral work rules are unlawful is set forth in Boeing Co., 365 NLRB No. 154 (2017), and LA Specialty Produce Co., 368 NLRB No. 93 (2019). Rather than apply these decisions, my colleagues’ analysis appears to be implicitly based on the standard set forth in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), which considers whether there is any potential interference with Section 7 rights rather than balancing a rule’s tendency to interfere with Section 7 rights against the legitimate interests supporting the rule. Although my colleagues have signaled their intention to reverse Boeing and LA Specialty in the Notice and Invitation to File Briefs in Stericycle, Inc., 371 NLRB No. 48 (2022), they must apply current Board law until such time as those cases are overruled. Under Boeing and LA Specialty, it is clear that the non-disparagement and confidentiality provisions in the severance agreements at issue would be lawful to maintain. See Medic Ambulance Service, Inc., 370 NLRB No. 65, slip op. at 2-3 (2021) (confidentiality rule lawful); Motor City Pawn Brokers Inc., 369 NLRB No. 132, slip op. at 5-7 (2020) (nondisparagement rule lawful).

Furthermore, throughout most of their decision, my colleagues analyze this case by determining whether the Respondent’s proffer of the severance agreements was merely coercive. But, despite my colleagues’ protestations to the contrary, the General Counsel litigated this case on a different theory-- that the severance agreements constituted an unlawful threat. The allegations in the Amended Complaint state that the Respondent violated the Act because it “““threatened its employees with loss of benefits described in permanent furlough agreements.” (Emphasis added.) And, in her brief in support of exceptions, the General Counsel continued to assert that the Respondent violated the Act by threatening its employees with the loss of benefits set forth in the severance agreement.

But clearly there was no threat here. Former employees were presented with a facially neutral severance agreement and informed that it was entirely their choice whether or not to sign. There is no evidence that the Respondent indicated that any term and condition of employment would be affected based on any employee’s decision whether or not to sign the agreement. Accordingly, the mere proffer of the agreement did not constitute a threat to take action against protected Section 7 activity; rather it indicated that, should an employee choose to sign the agreement, they would have to abide by the facially neutral terms of the agreement.¹⁰

CONCLUSION

Baylor and IGT were sound, pragmatic decisions fully consistent with the Act, and my colleagues have failed to establish sufficient grounds for overturning those decisions. Contrary to my colleagues’ assertions, the holdings in Baylor and IGT did not conflict with “long-standing precedent.” None of the cases cited by my colleagues found that an employer, never having suggested any proclivity to violate the Act, violated the Act by proffering a severance agreement that could possibly be interpreted as limiting Section 7 rights. Indeed, the instant case does not present those circumstances. Nevertheless, my colleagues have used this case to overrule extant law that was consistent with finding the violation in this case in order to change the law, in effect, for cases not involving the facts presented in this case. Not only does this new standard go beyond what is necessary to decide this case but, for the reasons I have discussed, my colleagues’ finding of a threat violation under this new standard is neither correct under Board law nor consistent with the General Counsel’s complaint and litigation of this matter. Accordingly, I must respectfully dissent from this aspect of my colleagues’ decision.

DECISION AND ORDER REMANDING

BY CHAIRMAN MCFERRAN AND MEMBERS KAPLAN, WILCOX, AND PROUTY

Today, after previously issuing a notice and invitation for briefing, we adopt a new legal standard to decide whether an employer’s work rule that does not expressly restrict employees’ protected concerted activity under Section 7 of the National Labor Relations Act (Act) is facially unlawful under Section 8(a)(1) of the Act. Here, an administrative law judge found that the Respondent violated Section 8(a)(1) by maintaining certain rules for its employees that addressed personal conduct, conflicts of interest, and confidentiality of harassment complaints.¹ In making those findings, the judge applied the standard established by a divided Board in Boeing Co., 365 NLRB No. 154 (2017), which sua sponte reversed the standard announced in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004).

Given the ubiquity of work rules and the importance of ensuring that such rules do not operate to undermine employees’ exercise of their rights under the Act, we sought public input on the standard adopted in Boeing, then purportedly clarified in LA Specialty Produce Co., 368 NLRB No. 93 (2019), and applied in subsequent cases where the Board found that several types of work rules were categorically lawful for employers to maintain, essentially without regard to how the particular rules were drafted.

Accordingly, we invited the parties and interested amici to address the following questions:

1. Should the Board continue to adhere to the standard adopted in Boeing Co., 365 NLRB No. 154 (2017), and revised in LA Specialty Produce Co., 368 NLRB No. 93 (2019)?

2. In what respects, if any, should the Board modify existing law addressing the maintenance of employer work rules to better ensure that:
3. the Board interprets work rules in a way that accounts for the economic dependence of employees on their employers and the related potential for a work rule to chill the exercise of Section 7 rights by employees;

1. the Board properly allocates the burden of proof in cases challenging an employer’s maintenance of a work rule under Section 8(a)(1); and

1. the Board appropriately balances employees’ rights under Section 7 and employers’ legitimate business interests?

3. Should the Board continue to hold that certain categories of work rules-- such as investigative-confidentiality rules as addressed in Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (2019), non-disparagement rules as addressed in Motor City Pawn Brokers, 369 NLRB No. 132 (2020), and rules prohibiting outside employment as addressed in Nicholson Terminal & Dock Co., 369 NLRB No. 147 (2020), and G&E Real Estate Management Services d/b/a Newmark Grubb Knight Frank, 369 NLRB No. 121 (2020)--are always lawful to maintain?

*2 Stericycle, Inc., 371 NLRB No. 48, slip op. at 1-2 (2022).

Having carefully considered the briefs of the parties and amici, as well as the Board’s past experiences regarding these issues and the view of our dissenting colleague, we have decided to adopt an approach to assessing facial challenges to employer work rules under Section 8(a)(1) that builds on and revises the Lutheran Heritage standard. As we will explain, the primary problem with the standard from Boeing and LA Specialty Produce is that it permits employers to adopt overbroad work rules that chill employees’ exercise of their rights under Section 7 of the Act, which include the “right to self-organization, to form, join, or assist labor organizations, to bargain collectively . . ., and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157. To begin, the current standard fails to account for the economic dependency of employees on their employers. Because employees are typically (and understandably) anxious to avoid discharge or discipline, they are reasonably inclined both to construe an ambiguous work rule to prohibit statutorily protected activities and to avoid the risk of violating the rule by engaging in such activity. In turn, Boeing gives too little weight to the burden a work rule could impose on employees’ Section 7 rights. At the same time, Boeing’s purported balancing test gives too much weight to employer interests. Crucially, Boeing also condones overbroad work rules by not requiring the party drafting the work rules--the employer--to narrowly tailor its rules to only promote its legitimate and substantial business interests while avoiding burdening employee rights.

The standard we adopt today remedies these fundamental defects. We adopt a modified version of the basic framework set forth in Lutheran Heritage, which recognized that overbroad workplace rules and polices may chill employees in the exercise of their Section 7 rights and properly focused the Board’s inquiry on NLRA-protected rights. During the 13 years when the Lutheran Heritage standard was in place, reviewing courts repeatedly and uncontroversially applied and upheld the standard. No court rejected the Lutheran Heritage standard or held that the Board was, in fact, applying some standard other than the one it articulated.² However, although Lutheran Heritage implicitly allowed the Board to evaluate employer interests when considering whether a particular rule was unlawfully overbroad, the standard itself did not clearly address how employer interests factored into the Board’s analysis. The modified standard we adopt today makes explicit that an employer can rebut the presumption that a rule is unlawful by proving that it advances legitimate and substantial business interests that cannot be achieved by a more narrowly tailored rule. Because we overrule Boeing, LA Specialty Produce, and the work rules cases relying on them, including those that placed rules into an “always lawful” category based simply on their subject matter, we reject Boeing’s categorical approach, instead returning to a particularized analysis of specific rules, their language, and the employer interests actually invoked to justify them.

*3 As under Lutheran Heritage, our standard requires the General Counsel to prove that a challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights. We clarify that the Board will interpret the rule from the perspective of an employee who is subject to the rule and economically dependent on the employer, and who also contemplates engaging in protected concerted activity. Consistent with this perspective, the employer’s intent in maintaining a rule is immaterial. Rather, if an employee could reasonably interpret the rule to have a coercive meaning, the General Counsel will carry her burden, even if a contrary, noncoercive interpretation of the rule is also reasonable. If the General Counsel carries her burden, the rule is presumptively unlawful, but the employer may rebut that presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule. If the employer proves its defense, then the work rule will be found lawful to maintain.³

I.

Applying Section 8(a)(1) of the Act, the Board has long and consistently recognized that an employer’s mere maintenance of a work rule may unlawfully interfere with, restrain, or coerce employees in the exercise of their Section 7 rights. See Republic Aviation Corp., 51 NLRB 1186, 1187 (1943). The Supreme Court long ago confirmed the Board’s authority to regulate employer work rules, as part of the flexibility the Board requires “to accomplish the dominant purpose” of the Act: to protect “the right of employees to organize for mutual aid without employer interference.” Republic Aviation Corp. v. NLRB, 324 U.S. 793, 798 (1945).⁴ Because overbroad and ambiguous work rules may have a coercive effect on employees, the Board and courts have long acknowledged that the regulation of work rules “serves an important prophylactic function: it allows the Board to block rules that might chill the exercise of employees’ rights by cowing the employees into inaction, rather than forcing the Board to ‘wait[] until that chill is manifest,’ and then try to ‘undertake the difficult task of dispelling it.”’ Quicken Loans, Inc., supra, 830 F.3d at 549 (quoting Flex Frac Logistics, LLC, 358 NLRB 1131, 1132 (2012), enfd. in relevant part 746 F.3d 205 (5th Cir. 2014)).

In its decisions carrying out this important function, the Board has grappled with two interrelated issues. The first has been determining the appropriate interpretive principles to apply in evaluating the potentially deleterious impact of a work rule on employees’ exercise of their Section 7 rights. In doing so, the Board regularly has assessed work rules to determine “the reasonably foreseeable effects of the wording of the rule on the conduct of the employees,” observing that “where the language is ambiguous and may be misinterpreted by the employees in such a way as to cause them to refrain from exercising their statutory rights, then the rule is invalid even if interpreted lawfully by the employer in practice.” Solo Cup Co., 144 NLRB 1481, 1481-1482 (1963).⁵ The second issue for the Board has been determining how to ensure that the rule minimizes any potential impact on employee rights, notwithstanding the legitimate business interests that the employer may be trying to advance by maintaining its rule.⁶

*4 Over the past nearly 25 years, the Board has attempted to articulate and consistently apply a generally applicable test under Section 8(a)(1) for assessing facial challenges to work rules. For almost half that time, the Lutheran Heritage standard provided the interpretive principles relevant to assessing the impact of a given rule on employees’ rights. We detail the Board’s recent history below with an eye toward explaining why a modified version of the Lutheran Heritage standard is the best approach to evaluating facial challenges to work rules in light of the Board’s experience and long-established statutory principles. Our decision today does not disturb the Board’s long-established doctrines covering work rules that address union (or other protected) solicitation, distribution, or insignia.⁷ Consistent with the Board’s decisions in both Lutheran Heritage and Boeing, we preserve Board precedent in those areas.

1. Lafayette Park

The recent history of the Board’s approach to work rules begins with Lafayette Park Hotel, 326 NLRB 824 (1998), enfd. mem. 203 F.3d 52 (D.C. Cir. 1999). There, a full Board (Chairman Gould and Members Fox, Liebman, Hurtgen, and Brame) considered facial challenges to rules defining various types of “unacceptable conduct.” 326 NLRB at 824. The Board identified “the appropriate inquiry” as “whether the rules would reasonably tend to chill employees in the exercise of their Section 7 rights” and that, where there is a likely chilling effect, “the Board may conclude that their maintenance is an unfair labor practice, even absent evidence of enforcement.” Id. at 825. For that standard, the Board referred to the Supreme Court’s decision in Republic Aviation, quoting its admonition that assessing the challenged rules involves “working out an adjustment between the undisputed right of self-organization assured to employees under the [] Act and the equally undisputed right of employers to maintain discipline in their establishments.” Id. (quoting 324 U.S. at 797-798). Member Hurtgen, disagreeing with the majority, expressed his view that “[i]f a rule reasonably chills the exercise of Sec. 7 rights, it can nonetheless be lawful if it is justified by significant employer interests.” Lafayette Park, 326 NLRB at 825 fn. 5.

*5 In analyzing the challenged rules’ impact on employees under its announced standard, the Lafayette Park Board did consider the employer’s interests in maintaining its rules, if not in the manner Member Hurtgen sought. See id. at 825-827, 829. For instance, when assessing a rule forbidding employees from making personal use of certain of the employer’s facilities, the Board noted the “legitimate business reasons for such a rule” and its view that “employees would recognize the rule for its legitimate purpose.” Id. at 827. Similarly, when assessing the employer’s rule forbidding fraternization between employees and customers, the Board noted that employees “would recognize the legitimate business reasons for which such a rule was promulgated, and would not reasonably believe that it reaches Section 7 activity.” Id. (internal footnote omitted). Although the Board considered the employer’s interests (as effectively communicated to employees), it did so in the course of interpreting a rule and assessing its potential chilling effect on employees.

The Lafayette Park Board was divided, too, in how to correctly apply the announced standard to particular rules. In a partial dissent, Members Fox and Liebman thought the majority merely paid “lip service” to the applicable interpretive principles in upholding rules that, in their view, had “the likely effect of chilling Section 7 activity.” Id. at 830. In response, Chairman Gould characterized their dissenting approach as one that improperly “pars[ed] out certain words and create[ed] theoretical definitions” for rules “that differ from the obvious ones.” Id. He asserted that the Board should not “focus[] on whether any language in the rules could theoretically encompass Section 7 activity” but, instead, should focus on “whether a reasonable employee could believe that the rule prohibits protected activity.” Id.

1. Lutheran Heritage

A few years later, in another full-Board decision, Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), the majority (Chairman Battista and Members Schaumber and Meisburg) construed Lafayette Park to mean that the relevant inquiry “begins with the issue of whether the rule explicitly restricts activities protected by Section 7.” Id. at 646 (emphasis in original). If it does not, a violation “is dependent upon a showing of one of the following: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.” Id. at 647. Under the first of these prongs, the majority instructed that the Board “must refrain from reading particular phrases in isolation,” “must not presume” that a rule will cause “improper interference with employee rights,” and should not conclude “that a reasonable employee would read [a] rule to apply to [Section 7] activity simply because the rule could be interpreted that way.” Id. at 646-647 (emphasis in original).

*6 In an effort to refine the standard applied in Lafayette Park, the Board in Lutheran Heritage observed that it was not enough to establish a violation of Section 8(a)(1) merely because a rule “could conceivably be read to cover Section 7 activity,” but in referring to how a reasonable employee ““would read” the rule, the majority did not expressly hold that the coercive meaning must be the only reasonable interpretation of the rule or the most reasonable interpretation. Id. at 647 (emphasis added). The Lutheran Heritage Board acknowledged that the rules it was scrutinizing “serve legitimate business purposes” and that reasonable employees “would realize the lawful purpose of the challenged rules”--thereby suggesting that such considerations had informed its conclusions--but again the Lutheran Heritage majority did not clearly explain how employer interests factored into the analysis. See id. at 647-648. Finally, Lutheran Heritage rejected a categorical approach to work rules. The majority acknowledged the case-by-case nature of the Board’s work rules decisions, noting that it did “not consider it necessary or appropriate to decide in this case what rules in a future hypothetical case would be unlawful.” Id. at 648.

In dissent, Members Liebman and Walsh raised the issue of balancing. They argued that in Lafayette Park the Board had recognized that “determining the lawfulness of an employer’s work rules requires balancing competing interests,” and they accused the majority of “[i]gnoring the employees’ side of the balance.” Id. at 650. The dissenters agreed that employers have legitimate business interests that warrant protection through the maintenance of work rules but contended that the employer must do so “subject to the requirement that employers articulate those rules with sufficient specificity that they do not impinge on employees’ free exercise of Section 7 rights.” Id. at 652.

Lutheran Heritage, then, again demonstrated the Board’s ongoing efforts to develop a standard that grappled with the two key questions posed in work rules cases: (1) how to interpret a rule and (2) whether and how employer interests factor into the analysis.

1. Aftermath of Lutheran Heritage

*7 Following Lutheran Heritage, the Board decided many work rules cases, and reviewing courts consistently applied and upheld the standard.⁸ However, there was some degree of confusion and disagreement about some aspects of its proper application, in particular whether, and if so, how, to consider an employer’s reasons for maintaining a challenged rule.

For instance, in Flagstaff Medical Center, 357 NLRB 659 (2011), enfd. in part 715 F.3d 928 (D.C. Cir. 2013), a panel majority found a hospital employer’s rule restricting employees’ use of cameras lawful, in part because of the employer’s “significant interest” in having the rule to prevent the disclosure of patient health information. Id. at 663. The majority there viewed the employer’s interest in maintaining the rule relevant to the analysis insofar as it informed the majority’s assessment that reasonable employees would recognize that employer interest and view the rule “as a legitimate means of protecting the privacy of patients and their hospital surroundings, not as a prohibition of protected activity.” Id.

But in a separate decision issued on the same day, a different panel majority assessed an employer’s maintenance of certain work rules and made no mention of the employer’s interests. Instead, the majority determined that the “only question” relevant was whether the employees “would reasonably construe the . . . rules to prohibit Section 7 activity” and did not mention the employer’s interests for maintaining the rules as part of its analysis resolving that question. Hyundai America Shipping Agency, Inc., 357 NLRB 860, 860-862 (2011), enfd. in part 805 F.3d 309 (D.C. Cir. 2015). Courts occasionally regarded the Board’s implicit approach to addressing employer interests under Lutheran Heritage as placing a rebuttal burden on the employer, once it was established that a rule had a reasonable tendency to chill employees’ exercise of Section 7 rights.⁹

1. William Beaumont

In William Beaumont Hospital, 363 NLRB 1543 (2016), a majority consisting of then-Member McFerran and Member Hirozawa struck down a hospital employer’s rule prohibiting conduct that “impedes harmonious interactions and relationships” because employees would reasonably understand that it could encompass interactions protected by Section 7. Id. at 1544. The majority also found a rule prohibiting “negative or disparaging comments” unlawful because it would reasonably be construed to prohibit protected expressions of concern about working conditions. Id.

*8 In dissent, Member Miscimarra contended that the Lutheran Heritage standard foreclosed consideration of employers’ justifications for their rules. Id. at 1550. In his view, the “‘reasonably construe’ standard entail [ed] a single-minded consideration of NLRA-protected rights, without taking into account the legitimate justifications of particular policies, rules and handbook provisions.” Id. He advocated a revised approach whereby, in every case challenging an employer’s maintenance of a work rule, the Board would determine “the potential adverse impact of the rule on NLRA-protected activity” and “the legitimate justifications an employer may have for maintaining the rule.” Id. at 1551. Once the competing interests were identified, the Board should then balance them such that “a facially neutral rule should be declared unlawful only if the justifications are outweighed by the adverse impact on Section 7 activity.” Id.

In response, the William Beaumont majority acknowledged that assessing work rules was a “difficult area of labor law,” particularly because of “the remarkable number, variety, and detail of employer work rules.” Id. at 1546-1547. But the majority also noted that, in the years since the Board had decided Lutheran Heritage, no court of appeals had rejected the standard that the Board regularly applied in work-rules cases. Id. at 1545 & fn. 11.¹⁰ The majority further explained that the Lutheran Heritage standard did, in fact, “take into account employer interests.” Id. at 1546. It did so by leaving employers free to protect their legitimate business interests by adopting more narrowly tailored rules while not infringing on Section 7 rights. The majority noted that when the Board found that a rule was not unlawfully overbroad, “it [was] typically because the rule [was] tailored such that the employer’s legitimate business interest in maintaining the rule [was] sufficiently apparent to a reasonable employee.” Id.

1. Boeing and LA Specialty Produce

Less than 2 years later, without being asked and without seeking any public input, a newly constituted Board effectively incorporated the William Beaumont dissent into the majority opinion in Boeing Co., 365 NLRB No. 154 (2017).¹¹ The Boeing majority (Chairman Miscimarra and Members Kaplan and Emanuel) held that, when deciding the lawfulness of maintaining a ““facially neutral” work rule, the Board “will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.” Id., slip op. at 3 (emphasis in original). Those two factors would be balanced against each other. According to the majority, the Lutheran Heritage standard did not permit the Board to consider an employer’s legitimate business reasons for maintaining a rule; to distinguish between more and less important Section 7 interests; to differentiate among industries, work settings, or specific circumstances reflected in a given rule; or to produce consistent rulings in work-rules cases. Id., slip op. at 2. And the majority claimed that past Board decisions specifying criteria for assessing the lawfulness of specific types of rules--like rules concerning workplace solicitation and distribution of literature--comport with its standard, which permitted accommodating employer interests, but not under Lutheran Heritage, which it asserted did not. Id., slip op. at 8.

*9 The majority also created a categorical classification system for evaluating rules under its standard. Id., slip op. at 3-4. In “Category 1”-- rules that were always lawful to maintain--it would put rules that, as a type, did not interfere with Section 7 rights and rules where the adverse impacts on Section 7 rights were outweighed by justifications associated with such rules. Id. In “Category 2”--rules that were sometimes lawful to maintain--’69t would put rules that “warrant scrutiny in each case.” Id., slip op. at 4. And in “Category 3”--rules that were always unlawful to maintain--it would put rules that, given their impact on protected activity, could never be justified by an employer. Id. The purported intent of this categorical approach was to “provide far greater clarity and certainty” for regulated parties. Id.

Applying its new standard, the Boeing majority upheld a rule maintained by the employer, a manufacturer of military and commercial aircraft, restricting the use of cameras in the workplace because any “adverse impact” on Section 7 rights was “comparatively slight” and was “outweighed by substantial and important justifications associated with Boeing’s maintenance of the no-camera rule.” Id., slip op. at 17. Without further explanation, it deemed all rules of that type always lawful for employers to maintain no matter the circumstances. Id. Remarkably, the Boeing Board also designated all rules “requiring employees to abide by basic standards of civility”--of the sort at issue in William Beaumont, but not at issue in Boeing--as always lawful. Id., slip op. at 15.

Then-Member McFerran and Member Pearce both dissented, expressing similar views. Member McFerran asserted that, as the Board had recently explained in William Beaumont, the standard under Lutheran Heritage did allow for consideration of an employer’s legitimate business justifications for its work rules. Id., slip op. at 35-36. But Member McFerran contended that the majority’s approach here went too far, privileging an employer’s interests over the rights of employees, who, because of their economic dependence on employers, reasonably take a cautious approach when interpreting work rules for fear of running afoul of a rule whose scope is unclear. Id., slip op. at 38. Member McFerran also criticized the majority’s assertion that its approach would provide more “certainty and clarity,” as she noted that it failed to identify which Section 7 rights and which employer interests are entitled to more or less weight in its balancing. Id., slip op. at 38-39.

*10 As to the majority’s categorical approach, Member McFerran noted that designating a type of rule as always lawful to maintain improperly forgoes particularized scrutiny of a similar rule in an altogether different workplace by finding it lawful without addressing what particular Section 7 rights are at stake, what justifications an employer might actually offer for its rule, and what industry or work setting is involved. Id., slip op. at 39.

Member Pearce expressed similar criticisms. Id, slip op. at 23-29. He found “particularly troubling” the majority’s designation of civility rules as always lawful to maintain. He pointed out that no civility rules were at issue in the case and that, in any event, civility rules threatened to chill the sort of heated expression that was not uncommon when employees engage in Section 7 activity. Id., slip op. at 27-28.

Less than 2 years later, in LA Specialty Produce Co., 368 NLRB No. 93 (2019), a Board majority (Chairman Ring and Members Kaplan and Emanuel) observed that Boeing needed to be buttressed with some “points of clarification.” Id., slip op. at 2. One ostensible clarification addressed how rules should be interpreted. The majority asserted that the reasonable employee does “not view every employer policy through the prism of the NLRA,” such that “a challenged rule may not be found unlawful merely because it could be interpreted, under some hypothetical scenario, as potentially limiting some type of Section 7 activity.” Id. A second ostensible clarification addressed the burden of proof to demonstrate a work rule’s impact on Section 7 rights, holding that “it is the General Counsel’s initial burden in all cases to prove that a facially neutral rule would in context be interpreted by a reasonable employee . . . to potentially interfere with the exercise of Section 7 rights.” Id. The majority also attempted to clarify the categorical approach by explaining that a rule should be placed in Category 1, and thus deemed always lawful to maintain, when the “general” employer interests in maintaining such a rule outweigh the potential impact on the exercise of Section 7 rights. Id., slip op. at 3.

Member McFerran dissented. As a threshold matter, she summarized what she deemed to be the primary defects in the reasoning of the Boeing Board. Those included (1) that the Board, in rejecting Lutheran Heritage and announcing a new standard, did so sua sponte and without public input; (2) that the standard under Lutheran Heritage already permitted the Board to consider an employer’s legitimate business justifications for its work rules; (3) that the Boeing standard fails to properly assess rules from the perspective of a reasonable employee because it does not consider the economic dependence of employees on employers, which increases the chilling potential of ambiguous rules; and (4) that Boeing’s categorical approach dispenses with individualized scrutiny for rules by ignoring their wording, whether they were narrowly tailored, and their context. Id., slip op. at 8-9.

*11 Member McFerran also disagreed with the clarifications that LA Specialty Produce purported to make to Boeing. Specifically, she argued that the majority’s description of a reasonable employee ignored employees’ economic dependence on the employer and the resulting reasonable tendency to interpret work rules as coercive, even where a disinterested person would not. Id., slip op. at 9-10. She also faulted the majority’s requirement that the General Counsel must prove that a work rule “would in context be interpreted . . . to potentially interfere with the exercise of Section 7 rights” as effectively (but not explicitly) requiring a showing that the coercive interpretation of a rule is the only reasonable interpretation. Id., slip op. at 10-11. As for the balancing test, Member McFerran noted that the majority failed to explain which party has the burden of proof with respect to the balancing, and that its endorsement of a “general” balancing approach eliminated consideration of the language of a particular rule or the requirement of narrow tailoring. Id., slip op. at 11-12.

1. Aftermath of Boeing and LA Specialty Produce

Since Boeing was decided, both before and after the Board’s attempted clarification of it in LA Specialty Produce, the Board has applied its new standard in a number of cases. The Board has usually found work rules lawful to maintain and, generally, has categorically deemed all similar rules to be lawful to maintain, no matter the specific wording of any particular rule or the specific workplace context in which they are maintained.¹²

II.

Having considered the valuable perspectives of the parties and amici in response to our Notice and Invitation to File Briefs (NIFB),¹³ as well as the Board’s past experience and the views of our dissenting colleague, we have decided the better approach is a modified version of the framework set forth in Lutheran Heritage for evaluating facial challenges to employer work rules that do not explicitly restrict Section 7 activity by employees and were not promulgated in response to such activity, as clarified herein. As explained, the key issues presented are: (1) defining the interpretive principles to apply to discern when work rules have a reasonable tendency to chill employees’ exercise of their statutory rights and (2) working out the proper adjustment between protecting employee rights and accommodating employers’ legitimate and substantial business interests in maintaining their rules. Although Lafayette Park and Lutheran Heritage established the Board’s proper interpretive focus--the perspective of a reasonable employee subject to the rule--they did not sufficiently (or clearly) articulate how employers’ interests fit into the analysis. While Boeing and LA Specialty Produce, in turn, appropriately recognized that employer interests should factor into the Board’s analysis, they adopted interpretive principles that failed to reflect the true coercive potential of work rules. In addition, those decisions gave too little weight to employees’ Section 7 rights and too much weight to employer interests, in particular by failing to require employers to narrowly tailor their work rules to minimize as much as reasonably possible, if not altogether eliminate, any infringement of employee rights.

*12 The approach we adopt today seeks to preserve the insights of the Board’s prior decisions while addressing their shortcomings. Given the wide range of work rules, the varying language they use, and the many different employment contexts in which they arise, we do not expect our new standard to provide complete certainty and predictability in this area of the law. That abstract goal--as the Board’s experience under Boeing suggests--could be achieved only by arbitrarily expanding the universe of work rules deemed always lawful to maintain, at the obvious expense to employees’ ability to exercise the rights guaranteed to them by the Act.

Our approach is focused on furthering what the Supreme Court many decades ago defined as the “dominant purpose” of the Act: protecting “the right of employees to organize for mutual aid without employer interference.” Republic Aviation, 324 U.S. at 798. In the context of this case, achieving the Act’s purpose means ensuring that the Board does not condone employer work rules that chill employees’ exercise of their statutory rights for fear of discipline or discharge if they violate them. The potential for intimidation is great precisely because of what the Supreme Court has described as “the economic dependence of the employees on their employers, and the necessary tendency of the former, because of that relationship, to pick up intended implications of the latter that might be more readily dismissed by a more disinterested ear.” NLRB v. Gissel Packing Co., 395 U.S. 575, 617 (1969). This fact of workplace life should be reflected in the Board’s treatment of work rules under Section 8(a)(1) of the Act, just as the Supreme Court has required with respect to the analysis of employers’ arguably coercive statements to employees.

But “equally undisputed,” as the Supreme Court has also observed, is the “right of employers to maintain discipline in their establishments” and otherwise protect their legitimate and substantial business interests by regulating employees’ workplace conduct. Republic Aviation, 324 U.S. at 798. Accordingly, in the work-rules context, as in other situations governed by Section 8(a)(1) of the Act, the Board must fulfill its duty to protect employees’ Section 7 rights while also considering employers’ legitimate and substantial business interests. As we will explain, our new standard gives employers the necessary leeway to maintain rules of their own choosing to advance legitimate and substantial business interests. They simply need to narrowly tailor those rules to significantly minimize, if not altogether eliminate, their coercive potential. If employers do so, their rules will be lawful to maintain.

A.

*13 It has long been established that the test for evaluating whether an employer’s conduct or statements violate Section 8(a)(1) of the Act is whether they have a reasonable tendency to interfere with, restrain, or coerce employees who may engage in activities protected by Section 7. American Freightways Co., 124 NLRB 146, 147 (1959). The General Counsel, of course, has the burden of establishing a violation of the Act. As we now explain, our initial focus in the work-rules context is on whether the General Counsel has proven that a rule has a reasonable tendency to interfere with, restrain, or coerce employees who contemplate engaging in protected activity. To discern that tendency, the Board--as in all other Section 8(a)(1) contexts-- appropriately “view[s] employer statements ‘from the standpoint of employees over whom the employer has a measure of economic power.”’ Mesker Door, Inc., 357 NLRB 591, 595 (2011) (quoting Henry I. Siegel Co. v. NLRB, 417 F.2d 1206, 1214 (6th Cir. 1969)), overruled on other grounds by Tschiggfrie Properties, Ltd., 368 NLRB No. 120, slip op. at 7 (2019).

Interpreting a work rule from the perspective of the economically dependent employee who contemplates engaging in Section 7 activity is consistent with workplace reality--employees ordinarily do not wish to risk their jobs by violating their employers’ rules--and with the employee-protective purposes of the Act.¹⁴ As suggested, this frame of reference is entirely consistent with, and arguably compelled by, the Supreme Court’s decision in Gissel, which considered whether certain statements made by an employer to his employees violated Section 8(a)(1). 395 U.S. at 616-620. Addressing the employer’s argument that its statements were protected by Section 8(c) of the Act, the Gissel Court explained that “an employer’s rights cannot outweigh the equal rights of the employees to associate freely, as those rights are embodied in § 7 and protected by § 8(a)(1).” Id. at 617. The Court reasoned that “any balancing of those rights must take into account the economic dependence of the employees on their employers, and the necessary tendency of the former, because of that relationship, to pick up intended implications of the latter that might be more readily dismissed by a more disinterested ear.” Id. These “obvious principles,” in the Court’s words, id., should be central to our analysis when the Board evaluates a work rule. Accordingly, in interpreting a rule, the Board will take the perspective of the “economically dependent employee” who contemplates engaging in Section 7 activity. See id.¹⁵ Such an employee is readily inclined to avoid violating a rule, and so readily inclined to interpret it more broadly to restrict or prohibit Section 7 activity than a disinterested observer might. Being discharged might mean--to take just two very real examples--being unable to pay rent or put food on the table. For purposes of the Act, then, the coercive potential of a work rule is inextricably intertwined with the vulnerable position of employees.

*14 By explicitly incorporating the perspective of the economically dependent employee into our analysis, we adopt an important interpretive principle that sometimes explicitly factored into the Board’s analysis under Lafayette Park and Lutheran Heritage. See, e.g., Whole Foods Market, Inc., 363 NLRB 800, 803 fn. 11 (2015) (applying those cases and incorporating the perspective of the economically dependent employee), enfd. 691 Fed.Appx. 49 (2d Cir. 2017). This principle is consistent with the Board’s long-established practice of construing any ambiguity in a work rule against the employer as the drafter of the rule. See, e.g., Lafayette Park, 326 NLRB at 828 & fn. 22 (citing Norris/O’Bannon, 307 NLRB 1236, 1245 (1992) (in turn citing Paceco, A Div. of Fruehauf, 237 NLRB 399, 400 fn. 8 (1978))).¹⁶

Despite stating that work rules should be interpreted from “the employees’ perspective,” 365 NLRB No. 154, slip op. at 16, the Boeing Board did not base this perspective on employees’ economic dependence. And, in turn, the Board in LA Specialty Produce obfuscated the issue by asserting--in response to the dissent’s view that rules should be assessed from the perspective of an economically dependent employee--that “a reasonable employee does not presume a Section 7 violation lurks around every corner.” 368 NLRB No. 93, slip op. at 7. Such rhetoric obscures the need to promote the policies of the Act, consistent with the Supreme Court’s insight in Gissel about employees’ economic position. For statutory purposes, the relevant reasonable employee is the employee who contemplates engaging in Section 7 activity, because this is the activity that the Act is explicitly intended to protect from employer interference. Whether some hypothetical employee only sometimes, or even never, contemplates Section 7 activity is immaterial. Indeed, if the likelihood of an employee contemplating Section 7 activity were somehow a relevant consideration, then even a rule explicitly prohibiting such activity could arguably be lawful (as not having a reasonable tendency, in fact, to interfere with the Section 7 activity of an employee who would not contemplate engaging in such activity).¹⁷ It is appropriate, then, for the Board to interpret an ambiguous work rule from the perspective of an employee who contemplates Section 7 activity, but who wishes to avoid the risk of being disciplined or discharged for violating the rule. The Board’s goal, of course, is to ensure that employers do not maintain unlawfully overbroad work rules that have a reasonable tendency to chill employees from exercising their statutory rights.

*15 In interpreting rules from the perspective of a reasonable employee, we believe the Board must also recognize that a typical employee interprets work rules as a layperson rather than as a lawyer. This uncontroversial principle has long been recognized by the Board, which has sensibly observed that “employees do not generally carry lawbooks to work or apply legal analysis to company rules as do lawyers, and cannot be expected to have the expertise to examine company rules from a legal standpoint.” Ingram Book Co., 315 NLRB 515, 516 fn. 2 (1994).

In sum, going forward, the Board will begin its analysis by assessing whether the General Counsel has established that a challenged work rule has a reasonable tendency to chill employees from exercising their Section 7 rights. In doing so, the Board will interpret the rule from the perspective of the reasonable employee who is economically dependent on her employer and thus inclined to interpret an ambiguous rule to prohibit protected activity she would otherwise engage in. The reasonable employee interprets rules as a layperson, not as a lawyer. If an employee could reasonably interpret a rule to restrict or prohibit Section 7 activity, the General Counsel has satisfied her burden and demonstrated that the rule is presumptively unlawful. That is so even if the rule could also reasonably be interpreted not to restrict Section 7 rights and even if the employer did not intend for its rule to restrict Section 7 rights.

B.

For reasons already explained, in some circumstances a violation of Section 8(a)(1) may require more than a showing that an employee could reasonably interpret a work rule to restrict or prohibit Section 7 activity. In such cases, the Board must still evaluate the lawfulness of a work rule in the context of the legitimate and substantial business interests of the employer in maintaining a specific work rule under the particular circumstances. Accordingly, if the General Counsel carries her burden of demonstrating that a rule is presumptively unlawful, an employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.

As we have explained, prior to Boeing, it was unclear precisely how the Board’s work-rules standard incorporated an assessment of employer interests. Our new standard makes explicit that the Board will consider employer interests when evaluating the employer’s rebuttal to the General Counsel’s showing that a rule is presumptively unlawful.

The clarified standard improves on the conspicuous shortcomings of the approach adopted in Boeing. Under the Boeing standard, a challenged rule’s “potential impact on NLRA rights” was balanced against “legitimate justifications associated with” the rule. 365 NLRB No. 154, slip op. at 14. But in practice, the Boeing balancing test was heavily weighted against employees’ Section 7 rights and in favor of employer interests, because--with little if any explanation--the Board proceeded to treat employee rights as “““peripheral.” Id., slip op. at 15. Although the Board under Boeing never explained which employee rights are “peripheral”--and there is no clear support in the Act for making such a determination--the characterization allowed the Board to regularly (and, in our view, arbitrarily) diminish the deleterious impacts of a challenged rule on Section 7 rights.¹⁸

*16 Crucially, Boeing’s balancing approach measured employer interests against employee interests without any requirement that a rule be narrowly tailored to serve the employer’s legitimate interests in having the rule. Under Boeing, then, overbroad work rules are perfectly permissible. So long as the employer interests advanced by the rule are found to outweigh the burden on employees’ rights, that rule is lawful to maintain--even if the employer interests could still be advanced by more narrowly crafting the rule such that it lessened or eliminated its burden on employees’ rights. We believe that requiring employers to narrowly tailor their rules is a critical part of working out the proper adjustment between employee rights and employer interests in the work-rules context.¹⁹

Such a requirement acknowledges employers’ prerogative to craft rules that they need to advance legitimate and substantial business interests while necessarily minimizing or eliminating the burden that such rules can have on employees’ exercise of their statutory rights.²⁰ We impose no unreasonable burden on employers by expecting them to be aware of their employees’ rights under the National Labor Relations Act, a statute enacted in 1935, more than 85 years ago, and long understood to apply in most workplaces, unionized and nonunionized alike--and to craft rules that minimize interference with their employees’ exercise of these long-established federal rights. Indeed, as we have noted, it has long been uncontroversial that any ambiguity in a work rule must be construed against the employer as the drafter of the rule.²¹

Prior to Boeing, the Board often applied a narrow-tailoring requirement. As the Board explained then, many of the Board’s pre-Boeing findings that a given rule was lawful to maintain were “typically because” the rule was narrowly tailored. William Beaumont, 363 NLRB at 1546. The courts of appeals approved of the Board’s application of a narrow-tailoring requirement. See, e.g., Flex Frac Logistics, 746 F.3d at 210 fn. 4; Northeastern Land Services, 645 F.3d at 483; Cintas Corp., 482 F.3d at 470; Guardsmark, LLC, 475 F.3d at 380. After all, courts are well familiar with the concepts of facial overbreadth and the importance of narrowly tailoring a rule from the First Amendment context. See, e.g., Double Eagle Hotel & Casino v. NLRB, 414 F.3d 1249, 1258 (10th Cir. 2005).

*17 We believe that a narrow-tailoring requirement is exactly the sort of reasonable “adjustment between the undisputed right of self-organization assured to employees under the [] Act and the equally undisputed right of employers to maintain discipline in their establishments” that the Supreme Court has instructed us to make in comparable situations. Republic Aviation, 324 U.S. at 797-798.

Under Boeing, even after attempting to provide clarifications in LA Specialty Produce, the Board never explained which party has the burden of proof with respect to the balancing test. We make clear here that, when a rule is presumptively unlawful, it is the employer’s burden to prove that its legitimate and substantial business interests cannot be accomplished with a more narrowly tailored rule and that, as a result, the rule should be deemed lawful to maintain. Placing the burden on the employer is consistent with the Supreme Court’s decisions in comparable circumstances. See NLRB v. Baptist Hospital, Inc., 442 U.S. 773, 781-782 (1979); Beth Israel Hospital v. NLRB, 437 U.S. 483, 507 (1978); Republic Aviation Corp., 324 U.S. at 803-804. This burden allocation is no different than under our more generally applicable Section 8(a)(1) framework. See, e.g., ANG Newspapers, 343 NLRB 564, 565 (2004) (“Under the 8(a)(1) standard, the Board first examines whether the employer’s conduct reasonably tended to interfere with Section 7 rights. If so, the burden is on the employer to demonstrate a legitimate and substantial business justification for its conduct.”). This approach also does not change the General Counsel’s burden of proving the unfair labor practice, but rather extends to the employer something akin to an affirmative defense that it has the burden of sustaining to overcome the presumption that a given work rule is unlawful. Cf. NLRB v. Transportation Management Corp., 462 U.S. 393, 401-402 (1983) (upholding the Board’s now well-established burden-shifting approach in Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982)). And allocating this burden to the employer is sensible given that the employer is in the best position to explain its legitimate and substantial business interest, how its rule advances that interest, and why a more narrowly tailored rule would fail to advance that interest.

C.

*18 Having rescinded the standard adopted in Boeing and revised in LA Specialty Produce, we necessarily reject those decisions and their progeny, including the categorical holding that the Board has made to find certain types of work rules always lawful to maintain.²² Instead of that rigid-- indeed, arbitrary--categorical approach, we return to a case-by-case approach, which examines the specific language of particular rules and the employer interests actually invoked to justify them.

The primary problem with Boeing’s categorical approach is that it was regularly applied to designate all rules of a generalized type as always lawful to maintain, no matter their specific wording, the specific industry or workplace in which the employer maintained the rule, the specific employer interests that the rule was supposed to advance, or any number of context-specific factors that may have arisen in a particular case. Boeing itself exemplifies the arbitrary nature of this categorical approach.

In Boeing, the employer was “one of the country’s most prominent defense contractors.” 365 NLRB No. 154, slip op. at 21. It maintained a rule that, absent a manager-approved business need and a permit issued by its security department, prohibited employees’ use of the camera features of electronic devices (like smartphones) on all company property. Id., slip op. at 5. Although the Board in Boeing cursorily labeled the adverse impact of this ““no camera” rule on employees’ exercise of Section 7 rights “comparatively slight” (ignoring the importance of photo or video documentation of unfair labor practices, protected concerted activity, and the like), it at least acknowledged that the rule infringed on employees’ exercise of their rights. Id., slip op. at 17, 19. Yet in applying its balancing test, the Boeing Board found that the employer’s interests advanced by the rule outweighed the adverse impact on employee rights and so deemed the rule lawful to maintain. Id., slip op. at 18-19.

The employer interests advanced by the rule included: serving as an integral component of Boeing’s security protocols, “which [were] necessary to maintain Boeing’s accreditation as a federal contractor to perform classified work for the United States Government”; furnishing “a fail-safe to ensure that classified information will not be released outside of Boeing in the event that such information finds its way into a non-classified area”; playing “a key role in ensuring that Boeing complies with its federally mandated duty to prevent the disclosure of export-controlled information,” including “‘sensitive equipment, software and technology,’ the export of which is controlled by the federal government ‘as a means to promote our national security and foreign policy objectives”DD’; mitigating “documented” instances of “foreign powers” trying to steal Boeing’s proprietary technology; and limiting “the risk”--in light of Boeing’s “documented evidence” of “surveillance by potentially hostile actors”--“of Boeing becoming a target of terrorist attack.” Id., slip op. at 18.

*19 All of these interests that pertained to Boeing are obviously unique to “one of the country’s most prominent defense contractors.” Id., slip op. at 21. They have no relevance to the overwhelming majority of employers who do not deal in “classified” information, “export-controlled information,” and the like. Despite that fact, and remarkably without any further justification, the Boeing Board put “no camera” and “no recording” rules “into Category 1,” meaning that all rules of that type are always lawful for every employer to maintain. Id., slip op. at 17. In other words, every employer can lawfully maintain a “no camera” or “no recording” rule that the Boeing Board admitted chills the exercise of Section 7 rights even if--as will be true for the overwhelming majority of them--those employers share none of the interests that justified Boeing’s maintenance of its rule. Boeing thus reflects an arbitrary and capricious approach to the analysis of work rules. We reject it.

In LA Specialty Produce, in turn, the Board purported to offer “points of clarification” for the categorical approach. 368 NLRB No. 93, slip op. at 2. The primary point of purported clarification was to state that Boeing’s ““Category 1” balancing test involves measuring “general” employer interests advanced by a rule against the rule’s interference with employees’ exercise of Section 7 rights. Id., slip op. at 3. While there may be some legitimate interests common to all employers at all times, and that are always entitled to the same weight in a balancing analysis, it is easy to see how such a broad approach can lead to giving employer interests in a particular case too much weight with too little justification, unnecessarily sacrificing Section 7 rights in the process. In endorsing “general” employer interests, LA Specialty Produce clearly did not effectively limit Boeing’s most obvious analytical flaw by leaving undisturbed Boeing’s holding that all “no camera” and “no recording” rules are always lawful. Confirmation of that fact is apparent in the Board’s post-LA Specialty Produce decisions. For instance, in AT&T Mobility, LLC, the Board found a cellphone retail employer’s rule that prohibited employees from recording conversations lawful to maintain “as a matter of law” simply because it was a “no recording” rule and thus categorically lawful to maintain. 370 NLRB No. 121, slip op. at 3 (explaining that “Boeing held not merely that [] specific no-camera and no-recording rules . . . were lawful Category 1[] rules, but that no-camera rules as a type and no-recording rules as a type belong in Category 1[]” (emphasis in original)). It did not matter that a cellphone retailer does not deal with classified information, export controls, documented threats of foreign interference, and the like, despite that those were the very interests that justified the categorical lawfulness of the “no camera” rule in Boeing. See also BMW Mfg. Co., 370 NLRB No. 56, slip op. at 3-4 (post-LA Specialty Produce decision “requiring no case-specific justification and balancing of interests” to deem a “no recording” rule categorically lawful “based on Boeing”). We believe that a return to “case-specific justification” better serves the purposes of the Act.

*20 Boeing’s categorical approach is also hamstrung by its elimination of any consideration of the specific language or context of particular rules. Under Boeing, this was done by, in a single case, analyzing whether one particular rule--including its specific wording and context--chills employees’ exercise of Section 7 rights, concluding that it does not, and then broadly declaring lawful all similar rules of that general type, regardless of the specific language or context of any of those purportedly similar rules.²³

Our return to a case-specific approach is intended to remedy the obvious problems with Boeing’s categorical approach. In order to consider all important aspects of the problem posed by potentially overbroad work rules, the Board should examine the specific wording of the rule, the specific industry and workplace context in which it is maintained, the specific employer interests it may advance, and the specific statutory rights it may infringe. The case-by-case approach will not sacrifice clarity and predictability for regulated parties. As is always the norm, the Board will aim to ensure that like cases will be decided alike. The nearer the wording of a specific rule is to a rule assessed in a prior case, or the nearer the workplace context or employer interests are to those factors previously considered, the more likely the Board’s determination of the rule’s legality will be the same. As a consequence, more predictable outcomes will emerge over time. For instance, many of the Board’s core pre-Lafayette Park work-rules holdings--such as those concerning maintenance of a “no solicitation” rule, see, e.g., Republic Aviation, 324 U.S. at 803 fn. 10--that Boeing did not overrule and that we maintain, describe generally applicable parameters for assessing certain types of rules. But that process should not be short-circuited, as the Board plainly did in applying Boeing. Put somewhat differently, consistent with the Act, predictability and certainty cannot be achieved simply by giving employers broad authority to adopt work rules and by correspondingly shrinking the scope of Section 7.

III.

The Board’s usual practice is to apply new policies and standards retroactively to all pending cases in whatever stage, unless doing so would amount to a manifest injustice. SNE Enterprises, Inc., 344 NLRB 673, 673 (2005). To determine whether retroactive application amounts to a manifest injustice, the Board considers the reliance of the parties on preexisting law, the effect of retroactivity on accomplishment of the purposes of the Act, and any particular injustice arising from retroactive application. Id.

*21 Here, retroactive application of the new work-rules standard will not cause manifest injustice. First, LA Specialty Produce’s purported “clarifications” of Boeing’s standard were announced less than 4 years ago, so parties have not had an extended period to rely on Boeing’s purportedly clarified standard. In any event, given the unclear nature of Boeing’s interpretive inquiry and the confusing results of its categorical classification scheme, reliance on Boeing as a practical matter was minimal. Second, as noted above, the standard from Boeing that we overrule was detached from the Act’s goals, which are better promoted by the standard that we adopt today. Retroactive application is thus important to furthering the Act’s purposes. Third, and last, we have identified no particular injustice arising from retroactive application. In particular, to the extent that a rule in a pending case is now found facially unlawful, even if it would have been upheld under Boeing, the remedy will be an order to rescind the rule, leaving the employer free to replace the rule with a more narrowly tailored substitute. For these reasons, we find that retroactive application of the standard we announce today is appropriate.

In this case, the General Counsel alleges that the Respondent unlawfully maintained overbroad work rules governing personal conduct, conflicts of interest, and confidentiality of harassment complaints. Applying Boeing and its progeny, the judge determined that maintenance of those rules was unlawful. Having overruled those decisions, we do not review the judge’s application of them. Instead, to allow the parties an opportunity to present arguments and introduce any relevant evidence under the new standard announced today, we remand this case to the judge for further proceedings consistent with this decision.

IV.

We have carefully considered the views of our dissenting colleague. We are not persuaded that we should adhere to the Board’s current approach in cases involving facial challenges to work rules.²⁴ Nor are we persuaded that the approach we adopt today is unsound.

As we have done, the dissent examines the history of the Board’s approach to work rules (a review noticeably absent from Boeing). Much of its discussion of Board and court of appeals cases from the 1960s, 1970s, and 1980s reaches essentially the same conclusion as we have: The Board’s older case law in this area was developing and unclear. The dissent’s claim that Board precedent was unclear and applied inconsistently, however, undermines its contention that there is “[l]ongstanding precedent” that “requires” the Board to take a particular approach in this area of law, a claim that the Boeing Board did not make.²⁵

*22 More pointedly, our dissenting colleague contends that Republic Aviation requires that we give “more weight” to employers’ interests than today’s approach does. We reject that contention. As we have explained, a central consideration in crafting a new standard has been, as Republic Aviation directs, “working out an adjustment between the undisputed right of self-organization assured to employees under the [] Act and the equally undisputed right of employers to maintain discipline in their establishments.” Republic Aviation, 324 U.S. at 797-798. That directive tells us that employees’ rights to organize and employers’ rights to have rules to maintain discipline are “equally undisputed”--not, of course, that those undisputed rights should be equally weighted in every circumstance. Instead, the Supreme Court left it to the Board to “work[] out [the] adjustment” between those sometimes conflicting rights using the Board’s “administrative flexibility” to “““accomplish the dominant purpose” of the Act, which “is the right of employees to organize for mutual aid without employer interference.” Id. at 798; see also 29 U.S.C. § 151.

The standard adopted today is carefully calibrated to achieve the adjustment that Republic Aviation describes. Despite the dissent’s unfounded speculation as to how future cases will be decided, the Board’s inquiry does not end if the General Counsel proves that a rule has a reasonable tendency to interfere with employees’ exercise of Section 7 rights. Rather, that showing merely establishes a presumption of unlawfulness. An employer may rebut it by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule. In this way, the test appropriately accommodates employers’ right to maintain rules necessary to operating their businesses. At the same time, when an employer’s rule is overbroad--i.e., when it could be narrowed to lessen the infringement of employees’ statutory rights while still advancing the employer’s interest--the standard properly requires that narrowing.

We reject our dissenting colleague’s tendentious prediction that the narrow-tailoring requirement will prove impossible to meet, as well as his apparent demand that we explain today how employers should tailor their rules in all cases. Employers are more than equipped to narrowly tailor their work rules to eliminate unnecessary overbreadth. In the absence of a specific rule, promulgated in a specific workplace, it is premature for us to assume how a work rule could potentially be narrowly tailored.²⁶ Of course, as a defender of Boeing and its progeny, our colleague has indicated a preference for a “one-size-fits-all” approach that negates the need for any such tailoring. But, for the reasons we have explained here, such an approach is unsound and would not reach a proper “adjustment” between conflicting rights. Moreover, it is unnecessary. Under Lutheran Heritage, the Board was able to carefully parse work rules, finding some lawful and others not.²⁷

*23 The dissent also challenges the new standard’s approach to interpreting work rules, i.e., interpreting the rule from the perspective of the economically dependent employee (a layperson, not a lawyer) who contemplates engaging in Section 7 activity, consistent with the Supreme Court’s decision in Gissel. That approach--in line with the Board’s general approach to employer statements alleged to violate Section 8(a)(1) of the Act--asks whether such an employee could reasonably interpret the rule to restrict or prohibit Section 7 activity. Our dissenting colleague seems to argue that the new standard means something other than what it plainly says. We have not held that a rule will be found presumptively unlawful if a coercive interpretation is merely conceivable (as opposed to reasonable). We have explained, rather, that in order to adequately protect the exercise of Section 7 rights we will not require the coercive interpretation to be the only reasonable interpretation. In other words, ambiguous rules are properly construed against the employer.

We are not persuaded by our colleague’s criticisms of this approach, which fail to acknowledge that the narrow tailoring of work rules fits within the larger statutory context. As a preliminary matter, we dispose of the dissent’s various mischaracterizations in support of its argument. The dissent says the reasonable employee we describe will find a prohibition on Section 7 activity in a rule “where none exists.” No, if there is no reasonable reading of the rule that it prohibits Section 7 activity, that is the end of the inquiry: the rule is lawful. The dissent says our approach involves interpretation of “any isolated word or phrase” in a rule. No, it turns on the interpretation of the rule as a whole; indeed, one of our criticisms of Boeing’s categorical approach is that it failed entirely to consider any of the specific text of rules. The dissent says that its (undefined) “truly reasonable” employee would use “common sense” when interpreting rules whereas the reasonable employee we describe does not. No, our inquiry, again, involves a reasonable employee who interprets work rules as a layperson rather than as a lawyer.

Our colleague apparently would hold that a work rule cannot be deemed unlawful (or presumptively unlawful) if it is susceptible to a noncoercive interpretation. In effect, ambiguous rules would be construed against employees, permitting such rules regardless of the chill that they cause to employees’ exercise of Section 7 rights. It seems clear to us, if not to our colleague, that an ambiguous rule can have a chilling effect on employees concerned about avoiding discipline from their employer. We reject our colleague’s policy choice that would sanction coercive work rules. Today’s standard, in contrast, is intended to be robustly prophylactic in protecting statutory rights--while still properly recognizing employers’ legitimate and substantial business interests, where shown, in maintaining particular work rules.

*24 The dissent also contends that a rule’s ambiguity should not be construed against the employer as the drafter and that the economic dependence of employees on their employer should not factor into to the Board’s understanding as to how an employee would reasonably interpret a work rule. As to the first point, the dissent argues that in distinguishing between rules that “could” be interpreted to have a coercive meaning and rules that “would” be interpreted this way, “Lutheran Heritage implicitly overruled Lafayette Park Hotel” with regard to the application of the interpretation-against-the-drafter principle. We are not persuaded by this novel reading of the case law. However, our disagreement on this point is moot given the standard we adopt today. Even if Lutheran Heritage departed from precedent, without explanation, we return to that precedent now. Aside from a long pedigree, see, e.g., Farah Manufacturing Co., 187 NLRB 601, 602 & fn. 5 (1970) (quoting NLRB v. Miller, 341 F.2d 870, 874 (2d Cir. 1965)), the familiar interpretation-against-the-drafter principle is firmly grounded in both an employee’s lack of specialized legal or interpretive expertise, Miller, 341 F.2d at 874 (justifying the doctrine’s application by noting that “employees . . . are not grammarians”), and inequality of bargaining power vis-à-vis an employer, see 29 U.S.C. § 151 (finding “inequality of bargaining power between employees . . . and employers”). See also Restatement (Second) of Contracts § 206 cmt. A (explaining that the interpretation against the drafter rule “is often invoked . . . in cases where the drafting party has the stronger bargaining position”). We note that our dissenting colleague does not explain why he would get rid of this longstanding and well-founded interpretive principle.

In turn, the dissent’s challenge to our reliance on the economic dependence of employees as supporting the new standard is based on an attempt to limit Gissel. According to the dissent, the Supreme Court in that case was only referring to a specific “category” of employer statements--namely, “predictions of dire consequences if employees unionize.” But the Court’s relevant observations are in no way limited in that manner. Here, in pertinent part, is what it said:

Any assessment of the precise scope of employer expression, of course, must be made in the context of its labor relations setting. Thus, an employer’s rights cannot outweigh the equal rights of the employees to associate freely, as those rights are embodied in § 7 and protected by § 8(a)(1) and the proviso to § 8(c). And any balancing of those rights must take into account the economic dependence of the employees on their employers, and the necessary tendency of the former, because of that relationship, to pick up intended implications of the latter that might be more readily dismissed by a more disinterested ear.

*25 Gissel, supra, 395 U.S. at 617 (emphasis added). Consistent with this observation, the Board has long factored employees’ economic dependence into its analysis of issues under Section 8(a)(1) of the Act.²⁸ Our dissenting colleague does not challenge the basic premise that employees are, indeed, economically dependent on their employers. The National Labor Relations Act itself rests on that premise.

In short, our dissenting colleague has pointed to nothing in the Act or in the decisions of the Supreme Court that either compels the Board to adhere to the Boeing work-rules standard or that prevents the Board from adopting the standard announced today. That standard, we believe, better promotes federal labor policy and better reflects the teachings of the Court, while addressing shortcomings in the Lutheran Heritage standard.

ORDER

IT IS ORDERED that the allegations that the Respondent violated Section 8(a)(1) by maintaining its rules governing personal conduct, conflicts of interest, and confidentiality of harassment complaints are remanded to Administrative Law Judge Michael A. Rosas for further appropriate action as set forth above.

IT IS FURTHER ORDERED that the judge shall afford the parties an opportunity to present evidence on the remanded issues and shall prepare a supplemental decision setting forth credibility resolutions, findings of fact, conclusions of law, and a recommended Order. Copies of the supplemental decision shall be served on all parties, after which the provisions of Section 102.46 of the Board’s Rules and Regulations shall be applicable.

Dated, Washington, D.C. August 2, 2023

Lauren McFerran

Chairman

Gwynne A. Wilcox

Member

David M. Prouty

Member

MEMBER KAPLAN, dissenting.

The statement “Boeing¹ overruled Lutheran Heritage Village²” is true, but misleading. It is misleading because it suggests that the Board adhered to Lutheran Heritage right up until it issued Boeing in December 2017. The truth is, Lutheran Heritage was effectively overruled as early as 2011, by a Board majority that claimed to apply that decision when in fact it was applying the Lutheran Heritage dissent. Today, my colleagues do likewise. They say they are adopting a modified version of the Lutheran Heritage standard. In reality, they are implementing a slightly modified version of the Lutheran Heritage dissent--and that slight modification is more akin to window dressing than actual change.

Under the standard my colleagues announce, a work rule is presumptively unlawful to maintain “[i]f an employee could reasonably interpret [it] to have a coercive meaning” (emphasis added). The Lutheran Heritage majority rejected that standard. They held that a work rule was unlawful to maintain if employees reasonably would interpret it to prohibit Section 7 activity,³ and they made clear that where a rule does not expressly refer to Section 7 activity, reasonable employees would not read it as doing so “simply because the rule could be interpreted that way.”⁴ My colleagues’ standard reflects the views of the dissenters in Lutheran Heritage, who took the position that “a rule that prohibits, inter alia, unprotected behavior may be unlawful if it also contains prohibitions so broad that they can reasonably be understood as encompassing protected conduct.”⁵ That is the standard my colleagues embrace.

Ironically, although Boeing overruled Lutheran Heritage, it was more faithful to that decision than is my colleagues’ decision today. The Boeing and Lutheran Heritage majorities went about it in different ways, but in determining whether a challenged work rule was lawful to maintain, both gave substantial weight to legitimate employer interests advanced by the rule as well as its potential to chill the exercise of Section 7 rights. Although the Lutheran Heritage majority announced a standard that appeared to consider only the latter--i.e., whether “employees would reasonably construe the language [of a rule] to prohibit Section 7 activity”⁶--they made it abundantly clear that legitimate employer interests were to be accommodated in the application of the standard. Implicitly embracing a view of the “reasonable employee” that the Board subsequently made explicit in LA Specialty Produce,⁷ the Lutheran Heritage majority took for granted that reasonable employees understand the legitimate interests advanced by work rules and will interpret them in that light. Accordingly, their position was that even if a challenged rule could be read to restrict Section 7 activity, reasonable employees would not read it that way where the rule does not refer to such activity and advances legitimate employer interests. “To take a different analytical approach,” said the Lutheran Heritage majority, “would require the Board to find a violation whenever the rule could conceivably be read to cover Section 7 activity, even though that reading is unreasonable. We decline to take that approach. . . . [R]easonable employees would not read the rule in that way. They would realize the lawful purpose of the challenged rules.”⁸ Boeing, on the other hand, announced a standard that expressly balances legitimate employer interests against employees’ Section 7 rights, but both the Lutheran Heritage and Boeing majorities accorded employer interests significant weight in the analysis.

This is, of course, what an adequate standard for determining the lawfulness of a challenged work rule must do. As the Supreme Court held nearly 80 years ago, “[o]pportunity to organize and proper discipline are both essential elements in a balanced society,” so the Board’s task in cases such as this is to “work[] out an adjustment between the undisputed right of self-organization assured to employees under the Wagner Act and the equally undisputed right of employers to maintain discipline in their establishments.” Republic Aviation v. NLRB, 324 U.S. 793, 797-798 (1945).⁹ It is important to note that the Supreme Court did not state that one side of this “adjustment” should be given significantly more weight than the other. Further, because it is impossible to anticipate every specific act or omission warranting discipline, it follows that an adequate standard must also accommodate the reality that, as the Board recognized in Lutheran Heritage, “[w]ork rules are necessarily general in nature . . . .”¹⁰

The standard the Board adopted in Boeing and refined in LA Specialty Produce meets these requirements. It accommodates the reality that work rules must be worded generally, and it accords sufficient weight to both employee rights and employer interests so that it is fair to say that these “equally undisputed rights” are truly being “balanced” against each other in a meaningful way. Under Boeing/LA Specialty Produce, the Board begins by asking whether a reasonable employee--one “who is ‘aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job,”’ and who “‘does not view every employer policy through the prism of the NLRA”’¹¹--would interpret a challenged rule to potentially interfere with the exercise of Section 7 rights. If not, the rule is lawful. If so, the Board proceeds to balance that potential interference against “legitimate justifications associated with the rule,”¹² i.e., legitimate interests the rule advances. If the rule’s adverse impact on the exercise of Section 7 rights outweighs the legitimate interests it serves, the rule cannot be lawfully maintained; if the balance tips the other way, it can. As I will show, this standard is similar to one the Board adopted and applied decades earlier, at the insistence of several circuit courts, only to abandon it without explanation in Lafayette Park Hotel.

In contrast, the standard my colleagues announce today does not measure up. It gives effectively dispositive weight to the “employee rights” side of the balance. Indeed, the majority does not actually balance employee rights and employer interests in a manner consistent with Republic Aviation. A balancing standard necessarily entails the possibility that in a particular case, a challenged rule may be lawful to maintain even though it limits the exercise of Section 7 rights to some extent because the legitimate employer interests it advances outweigh that limitation. No such possibility exists under the standard my colleagues have adopted.

To begin, the majority holds that work rules are to be viewed from the perspective of a very different kind of “reasonable employee” than contemplated in LA Specialty Produce, Lutheran Heritage, and Lafayette Park Hotel. The majority’s interpretation of “reasonable employee” in this context creates the labor-law equivalent of tort law’s “eggshell skull” plaintiff. Their reasonable employee is an individual predisposed to read into their employer’s work-rules references to Section 7 activity where none exists, and who would not engage in protected concerted activity without first minutely examining each rule set forth in their employee handbook. If this individual could possibly suspect that any isolated word or phrase in a rule that does not prohibit Section 7 activity might be interpreted to do so, that rule would coerce employees from engaging in protected concerted activity and therefore would be presumptively unlawful, even though truly reasonable employees would apply common sense and recognize that the evident purpose of the rule has nothing to do with Section 7 rights.¹³ It is only the possibility that this so-called reasonable employee could interpret the rule outside the context of its evident purpose that is controlling. Further, in their view, the employer maintaining such a rule can escape unfair labor practice liability only by proving two things: that the rule advances legitimate and substantial interests, and that those interests cannot be advanced by a more narrowly tailored rule.

Let’s put some flesh on the bones of these abstractions. Take, for example, a rule that subjects employees to discipline for “inability or unwillingness to work harmoniously with other employees.”¹⁴ How would this rule fare under the two different standards?

Under the balancing standard of Boeing and LA Specialty Produce, the answer is obvious. Employees who view work rules in the context of the everydayness of their jobs and not primarily through the prism of the Act would not reasonably interpret this rule to prohibit Section 7 activity. They would understand that the directive to work harmoniously with other employees simply “reflect[s] the lawful expectation that employees ‘comport themselves with general notions of civility and decorum in the workplace.”’¹⁵ Accordingly, the rule would be upheld without reaching the balancing-of-employee-rights-and-employer-interests step of the Boeing analysis.¹⁶

Under my colleagues’ test, the answer is equally obvious. Section 7 gives employees the right (among others) to form, join, or assist labor organizations. Given that a union-organizing campaign might occasion disharmony among employees, the reasonable employee of my colleagues’ imagination would find that the rule could be interpreted to prohibit union activity, even if that was the furthest thing from the employer’s mind. Therefore, the rule would be presumptively unlawful. Even assuming the employer proves that the rule serves legitimate and substantial interests--and who can reasonably doubt that it does?¹⁷--its proof is for naught unless it also proves that those interests cannot be advanced by a more narrowly tailored rule. How an employer is to do so, the majority does not say. No guidance is provided regarding evidence that might suffice to establish this defense. I suspect it will rarely if ever be established, and I am confident that my colleagues would not find it established in this instance.

Because it is unlikely that findings of presumptive unlawfulness can be overcome, employers’ only real hope is to avoid that finding in the first place. And because it is virtually impossible to craft work rules that are general enough to serve their intended lawful purpose without being susceptible to an interpretation that infringes on Section 7 rights,¹⁸ the only reliably predictable way that employers might insulate their work rules from Board invalidation would be by adding a legally sufficient disclaimer to their employee handbooks, i.e., language that would reassure even the majority’s hypervigilant “reasonable employee” that none of the rules contained therein applies to Section 7 activity. Accordingly, the full breadth of my colleagues’ decision cannot be understood until the Board addresses the question of safe harbor language in future cases.

My colleagues in the majority have a heavy responsibility. It is up to them to carry out the “delicate task” of striking an appropriate balance between employee rights and legitimate employer interests.¹⁹ I believe they have failed to discharge their duty in this regard. Accordingly, I respectfully dissent.²⁰

Discussion

1. Longstanding precedent requires the Board to give substantial weight to legitimate employer interests.

The majority would have the reader believe that the standard they announce today represents a new and improved version of the Board’s traditional work-rules jurisprudence, from which the Board departed when it issued Boeing. But their review of precedent is superficial and incomplete. As I will show, a fuller and more thorough review of court and Board precedent flips the script on my colleagues’ preferred narrative. It was Boeing’s balancing standard that returned Board law to conformity with both judicial precedent and the main thrust of the Board’s work-rules precedent over the years, under which legitimate employer interests--far from being relegated to an affirmative defense that most likely never will be met, as the majority has done--were accorded substantial weight.

As stated above, the Supreme Court requires the Board to “work[] out an adjustment between the undisputed right of self-organization assured to employees under the Wagner Act and the equally undisputed right of employers to maintain discipline in their establishments.”²¹ “Working out an adjustment between” employee and employer rights means recognizing that, in the Court’s words, “these rights are not unlimited in the sense that they can be exercised without regard to any duty which the existence of rights in others may place upon employer or employee.”²² And an accommodation between competing rights “must be obtained with as little destruction of the one as is consistent with the maintenance of the other,”²³ which implies that some “destruction” is acceptable--indeed, unavoidable.

The Board’s most well-settled, longstanding work-rule standards contradict the majority’s insistence that work rules, to be lawful, must be narrowly tailored to avoid restricting the exercise of Section 7 rights. Consistent with Supreme Court precedent, the Board’s work-rules jurisprudence has long reflected its recognition that the exercise by employees of their Section 7 rights may be and indeed must be restricted to the extent necessary to accommodate employers’ rights and legitimate interests. For example, to accommodate employers’ property rights, Board law allows employers to maintain a rule prohibiting off-duty employees from entering the interior of their facility and outside work areas, even though such a rule imposes a substantial limitation on off-duty employees’ exercise of their Section 7 right to engage in union activity by confining that activity to outside nonwork areas of the property.²⁴ Because “working time is for work,” employers may lawfully maintain a rule prohibiting solicitation during working time, even though “working time” comprises most of the time employees spend at the workplace, and therefore a rule that prohibits solicitation on working time substantially restricts employees’ exercise of their Section 7 right to engage in union-related solicitation.²⁵ Because working time is for work and literature easily turns into litter, employers may lawfully maintain a rule prohibiting distribution of literature during working time and in working areas at any time, even though such a rule sharply limits when and where employees may exercise their Section 7 right to distribute union-related literature.²⁶ Moreover, a no-solicitation or no-distribution rule that sweeps more broadly than these lawful prohibitions is presumptively unlawful, and the employer still may demonstrate that special circumstances justify the broader prohibition.²⁷ In short, the Board has long recognized that where legitimate employer rights and interests warrant, the fact that a work rule encompasses Section 7 activity within the scope of its prohibition does not make the rule unlawful to maintain.

In tension with these precedents, the Board has occasionally adjudicated the lawfulness of work rules by focusing exclusively on whether a challenged rule restricted the exercise of Section 7 rights.²⁸ However, it ultimately recognized that in determining whether the mere maintenance of a work rule violates the Act, the chilling effect of the rule on Section 7 activity must be balanced against the employer’s legitimate justifications for maintaining it. In doing so, the Board followed the lead of several federal courts of appeals, albeit somewhat haltingly.

In McDonnell Douglas Corp., 194 NLRB 514 (1971), the Board considered a rule that limited distribution of literature by off-duty employees to “a reasonable time before or after . . . shifts.” Although it recognized that the rule was prompted by “legitimate concerns” involving “security, traffic, and littering” and that the employer was entitled to adopt “reasonable rules designed to implement its legitimate concerns,” the Board found the rule unlawful without balancing those concerns against the rule’s restriction of Section 7 activity. Id. at 514. On review, the United States Court of Appeals for the Eighth Circuit refused to enforce the Board’s order. McDonnell Douglas Corp. v. NLRB, 472 F.2d 539 (8th Cir. 1973). The court held that the adjustment of employee rights and legitimate employer interests mandated by Republic Aviation required the Board to do more than just consider those respective rights and interests. Rather, it held that Supreme Court precedent requires the Board to balance those rights and interests and determine which was to be accorded greater weight: “[T]he vital issue which the Board should have considered more fully in this case,” wrote the court, “is balancing the diminution of the employees’ § 7 rights as the result of the subject rule against the interests of McDonnell being protected by the rule. In that balancing process, the Board should have determined whether the former sufficiently outweighed the latter to necessitate the order voiding the contested parts of the rule.” 472 F.2d at 545.²⁹ The court remanded the case to the Board to try again. On remand, the Board accepted the court’s opinion as the law of the case and summarily concluded that the employer “ha[d] shown sufficient need to maintain security to justify its rules in question.” McDonnell Douglas Corp., 204 NLRB 1110, 1110 (1973).

Next, in Jeannette Corp., 217 NLRB 653 (1975), the Board adopted an administrative law judge’s conclusion that the employer was violating Section 8(a)(1) by maintaining “an unwritten rule prohibiting employees from discussing wage rates with other employees,” id. at 653-654, based solely on the judge’s rationale that the rule “constitute[d] a clear impediment to, and a restraint upon, employees’ Section 7 right to engage in concerted activities for mutual aid and protection concerning an undeniably significant term of employment,” id. at 656. On review, the United States Court of Appeals for the Third Circuit upheld the result the Board had reached, but based on a rationale that implicitly criticized the incompleteness of the Board’s analysis. See Jeannette Corp. v. NLRB, 532 F.2d 916 (3d Cir. 1976). After agreeing with the Board that the rule tended to restrain protected concerted activity, id. at 918, the court continued as follows:

Once it is established that the employer’s conduct adversely affects employees’ protected rights, the burden falls on the employer to demonstrate “legitimate and substantial business justifications” for his conduct. N.L.R.B. v. Fleetwood Trailer Co., Inc., 389 U.S. 375, 378 (1967); N.L.R.B. v. Jemco, Inc., 465 F.2d 1148, 1152 n.7 (6th Cir. 1972). In weighing the justifications offered by the employer, we must heed the Supreme Court’s admonition that “[it] is the primary responsibility of the Board and not of the courts ‘to strike the proper balance between the asserted business justifications and the invasion of employee rights in light of the Act and its policy.”’ N.L.R.B. v. Fleetwood Trailer Co., supra, 389 U.S. at 378, quoting N.L.R.B. v. Great Dane Trailers, 388 U.S. 26, 33-34 (1967).

Id. at 918-919. Thus, like the Eighth Circuit in McDonnell Douglas, the Third Circuit took the position that Supreme Court precedent precludes finding a work rule unlawful based solely on its adverse effect on employees’ Section 7 rights, and mandates that the Board balance that adverse effect against the employer’s “asserted business justifications” for the rule. However, because the employer had failed to assert any justification for its unwritten rule, id. at 919-920, the rule was upheld without the otherwise-required balancing.³⁰

Subsequently, in Texas Instruments Inc., 236 NLRB 68 (1978), the Board found that the employer violated the Act by maintaining a rule prohibiting employees from disseminating its wage scales outside the organization, once again relying exclusively on the rule’s adverse impact on the exercise of Section 7 rights. Id. at 72. On review, the United States Court of Appeals for the First Circuit remanded with instructions that the Board apply the standard announced by the Third Circuit in Jeannette Corp. See Texas Instruments, Inc. v. NLRB, 599 F.2d 1067, 1073 (1st Cir. 1979). On remand, the Board reached the same result, although its decision left unclear whether it agreed with the court that a balancing of employee rights and employer justifications is mandatory or simply accepted the court’s decision in that regard as the law of the case. Texas Instruments Inc., 247 NLRB 253 (1980), enf. denied 637 F.2d 822 (1st Cir. 1981).

Two years later, the Board dispelled this lack of clarity, upholding an employer’s confidentiality policy on the basis that the adverse impact of the policy on employee rights was outweighed by the employer’s “substantial and legitimate business justifications for its policy.” International Business Machines Corp., 265 NLRB 638, 638 (1982) (IBM). Subsequently, citing IBM, the Board announced the following generally applicable standard for adjudicating work-rule allegations: “In assessing the lawfulness of [an employer’s] rule, . . . we must determine whether the rule reasonably tend[s] to coerce employees in the exercise of their Section 7 rights, and, if so, whether the employees’ Section 7 rights are outweighed by any legitimate and substantial business justification for the rule.” Waco, Inc., 273 NLRB 746, 748 (1984); see also Scientific-Atlanta, Inc., 278 NLRB 622, 625 (1986) (recognizing that “Section 7 rights may be outweighed by an employer’s substantial and legitimate business justifications”). Following Waco, the Board repeatedly applied the standard it had announced in that case.³¹

The Board failed, however, to apply the governing standard consistently. In Cincinnati Suburban Press, 289 NLRB 966 (1988), an administrative law judge struck down two work rules without citing Waco or balancing the rules’ reasonable tendency to interfere with the exercise of Section 7 rights against the newspaper’s legitimate justifications for maintaining them. Instead, the judge found the rules unlawful on the basis that they “fail[ed] to define the area of permissible conduct in a manner clear to employees.” Id. at 975. No Board precedent was cited as authority for this rationale. In adopting the judge’s decision, the Board acknowledged the newspaper’s right to adopt rules that further its legitimate interests, but stated that such rules must be ““narrowly tailored” and “unambiguous.” Id. at 966 n.2. As authority, the Board cited Peerless Publications, 283 NLRB 334 (1987), an entirely inapposite case.³²

1. B. The Board abandons the Waco balancing standard but continues to accord substantial weight to legitimate employer interests.

In Lafayette Park Hotel, 326 NLRB 824 (1998), the Board abruptly abandoned the balancing standard it had announced in Waco and applied (although not with perfect consistency) in subsequent cases. Citing only Republic Aviation and the Supreme Court’s familiar language requiring the Board to “work[] out an adjustment” between employee and employer rights, the Board announced the following standard: “In determining whether the mere maintenance of rules . . . violates Section 8(a)(1), the appropriate inquiry is whether the rules would reasonably tend to chill employees in the exercise of their Section 7 rights.” Id. at 825. Lafayette Park Hotel cited no Board precedent for this standard, nor did it overrule Waco in relevant part or cases subsequent to Waco applying its balancing-of-employee-rights-and-employer-interests standard. Four members signed on to this test: Chairman Gould and Members Fox, Liebman, and Brame. Member Hurtgen did not endorse the test, stating that he “would not so limit the inquiry. If a rule reasonably chills the exercise of Sec[tion] 7 rights, it can nonetheless be lawful if [it] is justified by significant employer interests . . . .” Id. at 825 n.5.

But although the Lafayette Park Hotel majority departed from Waco’s balancing standard, it did not fail to accord substantial weight to employers’ legitimate interests. To be sure, the Board did not explain how it would achieve the “adjustment” of employee rights and employer interests that Republic Aviation mandates with a standard that treats as solely relevant the tendency of a challenged rule to chill the exercise of Section 7 rights. Nevertheless, in analyzing the rules at issue in the case, the Board made clear that the required adjustment was to be accomplished in the application of the announced standard--an application that assumes a reasonable employee very different from the one my colleagues place at the center of their decision.

Seven rules were at issue in Lafayette Park Hotel. All five members found one of them, an off-duty access rule, unlawful as contrary to Tri-County Medical Center. A majority consisting of Chairman Gould and Members Fox and Liebman found a second rule unlawful, on the basis that controlling precedent (including Cincinnati Suburban Press) dictated that result; Members Hurtgen and Brame dissented. A different majority consisting of Chairman Gould and Members Hurtgen and Brame (“the majority”) found the remaining five rules lawful. Members Fox and Liebman, dissenting in part (“the dissent”), would have found all seven rules unlawful.³³

The rationale of the majority in upholding five of the seven rules holds the key to understanding Lafayette Park Hotel (and, as shown below, the Board’s subsequent decision in Lutheran Heritage as well). Again and again, this majority found the challenged rule would not reasonably tend to chill employees in exercising their Section 7 rights because reasonable employees would perceive the legitimate employer interests served by the rule and would read it in that light, not as prohibiting Section 7 activity.³⁴ The majority rejected an analysis that finds ambiguity in a rule by “parsing” its language and reading particular phrases in isolation. 326 NLRB at 825.

Dissenting in part, Members Fox and Liebman accused their colleagues of misapplying the announced standard. “While paying lip service to the appropriate standard,” they wrote, “our colleagues have applied that standard in such a way as to enable employers lawfully to maintain rules that have the likely effect of chilling Section 7 activity.” 326 NLRB at 830. In their view, all seven rules at issue were unlawful because “they are all overly broad and equally ambiguous as to their reach.” Id. The dissent repeatedly invoked the principle that ambiguity is construed against the drafter,³⁵ and some variation of the words ambiguous or overbroad appears 22 times in their dissent. Echoing the rationale of the administrative law judge in Cincinnati Suburban Press, they concluded that “[e]ach [of the rules] fails to define the area of impermissible conduct in a manner clear to employees. As a result, each has a reasonable tendency to cause employees to refrain from engaging in protected activities.” Id. at 830. Turning to specific rules, the dissent found particular rules unlawful because they “could,” “may,” or “might” be understood to prohibit Section 7 activity.³⁶ The dissent repeatedly isolated particular words and phrases and found challenged rules ambiguous and overbroad because the words or phrases were not defined or otherwise limited.³⁷ The dissent asserted that the dissenting members were not “precluding or restricting employers from achieving legitimate business objectives by imposing work rules governing employee conduct,” but that those rules must be “narrowly and precisely drawn to define the proscribed conduct,” id. at 833, and “eliminate ambiguity,” id. at 834, in order to withstand Board review.³⁸

The key votes in Lafayette Park Hotel were Chairman Gould’s--it was his vote that tipped the balance in the Hotel’s favor on five of the seven contested rules--and the Chairman wrote separately to explain his disagreement with his colleagues. He turned their criticism back on themselves, faulting them for “fail[ing] to apply the appropriate standard” by “view[ing] these rules through the eye of a sophisticated labor lawyer” and “focus[ing] on whether any language in the rules could theoretically encompass Section 7 activity,” rather than viewing them from the standpoint of a “reasonable employee,” who would perceive their “obvious meaning and intent.” “In short,” he concluded,

*26 it is not enough to find that certain language in a rule is broad enough to arguably apply to Section 7 activity. The appropriate inquiry must center on whether a reasonable employee could believe that the rule prohibits protected activity. When the rules have an obvious intent, they cannot be found unlawful by parsing out certain words and creating theoretical definitions that differ from the obvious ones. If that were the standard, virtually all of the work rules in today’s workplace could be deemed violative of our Act unless they explicitly state that they do not apply to Section 7 activity.

Id. at 830.

Before moving on to Lutheran Heritage, I must point out that the dissent painted a misleading picture of Board law in their Lafayette Park Hotel dissent. The dissent indicated that “Board precedent holds that the mere maintenance of an ambiguous or overly broad rule is unlawful because it tends to inhibit employees from engaging in otherwise protected activity.” 326 NLRB at 831. Although some Board decisions stand for that one-sided proposition, others do not, including Waco and a number of post-Waco decisions recognizing that an overbroad rule is lawful if justified by substantial and legitimate employer interests that outweigh its potential adverse effect on the exercise of Section 7 rights.³⁹ Moreover, the cases cited in the dissent in support of its representation of what “Board precedent holds”--Ingram Book Co., 315 NLRB 515 (1994), and J. C. Penney Co., 266 NLRB 1223 (1983)--do not stand for the broad proposition the dissenters assert.⁴⁰

1. The Board adheres to and refines the Lafayette Park Hotel standard, over a dissent that echoes the Lafayette Park Hotel dissent.

In Lutheran Heritage, the Board adhered to the standard that was announced in Lafayette Park Hotel, stating that “to determine whether mere maintenance of certain work rules violates Section 8(a)(1) of the Act, ‘the appropriate inquiry is whether the rules would reasonably tend to chill employees in the exercise of their Section 7 rights.”’ 343 NLRB at 646 (quoting Lafayette Park Hotel, 326 NLRB at 825). The Board also adhered to Lafayette Park Hotel’s insistence that rules be given “a reasonable reading” and that the Board “refrain from reading particular phrases in isolation.” Id. (citing Lafayette Park Hotel, 326 NLRB at 825, 827). But the Lutheran Heritage Board mediated Lafayette Park Hotel’s “reasonable tendency to chill” test through a multipronged standard that further defined how and when the maintenance of a work rule would have that reasonable tendency. The Board identified four ways in which the maintenance of a rule may violate the Act, three of which do not concern us here.⁴¹ Pertinent to this case is prong one of the Lutheran Heritage standard, under which a work rule is unlawful to maintain if “employees would reasonably construe the language to prohibit Section 7 activity.” Id. at 647.

Like the “reasonable tendency to chill” standard of Lafayette Park Hotel, the “would reasonably construe” standard of Lutheran Heritage appears on its face to make the employee-rights side of the Republic Aviation balance solely relevant to the analysis. But like the majority in Lafayette Park Hotel, the Lutheran Heritage majority accommodated employers’ legitimate interests in their application of the announced standard. And again like Lafayette Park Hotel’s majority, the Lutheran Heritage decision assumed a reasonable employee wholly unlike the one my colleagues posit, recognizing that, where challenged rules serve legitimate employer interests, “reasonable employees . . . . would realize the lawful purpose of the challenged rules” and read them in that light, not as prohibiting Section 7 activity. Id. at 648. Where a challenged rule “does not refer to Section 7 activity,” the Board explained, “we will not conclude that a reasonable employee would read the rule to apply to such activity simply because the rule could be interpreted that way. To take a different analytical approach would require the Board to find a violation whenever the rule could conceivably be read to cover Section 7 activity, even though that reading is unreasonable. We decline to take that approach.” 343 NLRB at 647 (emphasis in original). Accordingly, under the Lutheran Heritage “would reasonably construe” standard, a rule is not unlawful to maintain merely because it is ambiguous or overbroad and thus could be read to restrict the exercise of Section 7 rights.

There is, however, an important difference between Lutheran Heritage and Lafayette Park Hotel. As noted above, the section of the Lafayette Park Hotel decision in which all five members joined included a reference to the ambiguity principle, i.e., the principle that ambiguity is construed against the drafter. The majority in Layfayette Park Hotel did not address this issue because it found the particular rules at issue were not ambiguous,⁴² but Lutheran Heritage rejected application of the ambiguity principle in the work-rules context. A statement is ambiguous if it could be interpreted in more than one way, but the Lutheran Heritage majority held that where a work rule does not refer to Section 7 activity, an employer does not violate the Act by maintaining it merely because the rule could be read to refer to such activity, i.e., merely because it is ambiguous. Properly understood, then, Lutheran Heritage implicitly overruled Lafayette Park Hotel in this critical respect.

For their part, the dissenters in Lutheran Heritage reprised the rationale of the Lafayette Park Hotel dissent. Invoking the principle that ambiguity is construed against the drafter, 343 NLRB at 650, the dissenting Board members would have held that a rule that can be read to prohibit Section 7 activity cannot be lawfully maintained. They rejected their colleagues’ accommodation of the employer’s interests within the perspective of a reasonable employee who understands the legitimate purpose served by a necessarily general work rule and therefore would not read the rule to prohibit Section 7 activity merely because it could be read that way. They also rejected the majority’s assertion that particular words and phrases ought not be considered in isolation.⁴³ Although the dissent gave lip service to employers’ right to maintain rules that protect their legitimate interests, it insisted that this right “is appropriately subject to the requirement that employers articulate those rules with sufficient specificity that they do not impinge on employees’ free exercise of Section 7 rights.” Id. at 652. In other words, ambiguity without more condemns a rule, and employers must narrowly tailor their rules to prohibit only unprotected activity, eradicating any possibility that a rule might be interpreted to prohibit Section 7 activity. Thus, the position of the dissent in Lafayette Park Hotel was consistent with the dissent in Lutheran Heritage.

1. The Board effectively overrules Lutheran Heritage, while claiming to apply it, by applying the Lutheran Heritage and Lafayette Park Hotel dissents instead.

Lutheran Heritage issued in 2004. By 2011, however, the Board was erroneously professing to apply the Lutheran Heritage standard while actually applying the Lafayette Park Hotel and Lutheran Heritage dissents.

The first such decision was 2 Sisters Food Group, Inc., 357 NLRB 1816, 1816 (2011), where the majority found that the employer violated Section 8(a)(1) by maintaining a rule that made “inability or unwillingness to work harmoniously with other employees” grounds for discipline. Citing Lutheran Heritage as the applicable standard, the majority nevertheless relied for their finding on the rule’s “patent ambiguity,” the fact that the rule “[did] not define what it means to ‘work harmoniously’ (or fail to do so),” and the observation that the rule was “sufficiently imprecise that it could encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7.” Id. at 1817. The majority invalidated the rule because it was ambiguous and not narrowly tailored to exclude any possibility of being interpreted to restrict Section 7 activity. In other words, they applied the very standard endorsed by the Lafayette Park Hotel and Lutheran Heritage dissents. Indeed, by finding the rule unlawful notwithstanding the wholly legitimate interest it served--to promote a civil and decent workplace, as Member Hayes pointed out in dissent, id. at 1829--because it could encompass” Section 7 activity, id. at 1817 (emphasis added), the 2 Sisters majority plainly relied on a rationale that directly contradicted the very Lutheran Heritage standard they purported to apply. See Lutheran Heritage, 343 NLRB at 647 (“Where . . . the rule does not refer to Section 7 activity, we will not conclude that a reasonable employee would read the rule to apply to such activity simply because the rule could be interpreted that way.”) (emphasis in original).⁴⁴

Throughout the period between August 2013 and ending August 2017,⁴⁵ the Board continued to claim to apply the Lutheran Heritage standard while actually applying the Lutheran Heritage and Lafayette Park Hotel dissents. Over the course of those years, the Board issued at least nineteen decisions that effectively applied those dissents by reading particular phrases in isolation, requiring that rules be narrowly tailored to exclude any possible interpretation that would impinge on Section 7 rights, and/or invoking the principle that ambiguity is construed against the employer as the drafter of the challenged rule.⁴⁶ Typically, Lafayette Park Hotel was cited as authority for the latter proposition, even though it was or should have been apparent that this principle, as applied to rules-maintenance issues, did not survive Lutheran Heritage. An ambiguous rule is one that could be interpreted in more than one way, and the Lutheran Heritage majority rejected the notion that a reasonable employee would read a facially neutral rule to refer to Section 7 activity merely because the rule could be read that way, i.e., merely because it is ambiguous. 343 NLRB at 647.

My colleagues soft-pedal the Board’s post-Lutheran Heritage work-rule decisions. Rather than frankly admit that the Board, claiming to apply Lutheran Heritage, actually applied the standard set forth in the Lafayette Park Hotel dissent and the Lutheran Heritage dissent, they assert that there was “some degree of confusion and disagreement about [the] proper application” of Lutheran Heritage during those years. In support of this characterization, they cite just two contrasting decisions--Flagstaff Medical Center, 357 NLRB 659 (2011),⁴⁷ and Hyundai America Shipping Agency--as though they are illustrative of the Board’s 2011-2017 work-rule decisions as a whole. In reality, however, Flagstaff Medical Center was an isolated instance in which the majority correctly applied the actual Lutheran Heritage standard. I disagree with my colleagues’ assertion that this one decision in 2011 was representative of “some degree of confusion” for the following 6 years, during which the Board failed to properly apply the governing standard even once.

Accordingly, when the Board overruled Lutheran Heritage in its December 2017 decision in Boeing, it was responding more to what Lutheran Heritage had come to stand for through misapplication than to Lutheran Heritage itself. It must be acknowledged that both Lutheran Heritage and Lafayette Park Hotel were vulnerable to being exploited in this way. The standards announced in those cases on their face considered only the “employee rights” side of the Republic Aviation balance, leaving the employer’s legitimate interests to be accommodated in the application of the standard. This made it all too easy for Board majorities that disagreed with the approach taken by the majority in Lafayette Park Hotel and the Board in Lutheran Heritage but were unable or unwilling to overrule either decision outright, to assert that they were applying Lutheran Heritage even though their analyses and the conclusions resulting therefrom were antithetical to that decision.

With the Lutheran Heritage standard thus muddled and compromised, the Board reasonably decided that the best way to work out the Court-mandated ““adjustment” of Section 7 rights and legitimate employer interests was to throw out Lutheran Heritage altogether and start over with a standard that explicitly balances those rights and interests, as the Board had done in IBM and Waco.⁴⁸

1. The Board returns its work-rules jurisprudence to its traditional and judicially required practice of according substantial weight to both employee rights and legitimate employer interests.

Although it has not been its invariable practice, the Board’s predominant approach to resolving disputes over the lawfulness of challenged work rules has been to accord substantial weight to both sides of the Republic Aviation balance. The Board has done so in different ways over the years. As shown above, it has done so by expressly requiring a balancing of employee rights and employer interests, as in IBM and Waco. And it has done so by accommodating employers’ legitimate interests in the application of a standard that on its face appeared to consider only employee rights, as in Lafayette Park Hotel and Lutheran Village. But under either of these approaches, legitimate employer interests advanced by work rules played an important role in the determination, and the mere fact that a challenged rule could be construed to limit Section 7 activity was insufficient to make maintenance of the rule unlawful. The Board departed, however, from this traditional approach beginning with its 2011 decision in 2 Sisters Food Group, as shown above.

With Boeing, the Board returned to its historically predominant practice of adjudicating work-rule allegations by according substantial weight to both sides of the Republic Aviation balance. It did so by adopting a standard that expressly balances employee rights against legitimate employer interests. Under the balancing standard adopted in Boeing and refined in LA Specialty Produce, if a challenged rule, reasonably interpreted, does not interfere with the exercise of a Section 7 right, it is lawful to maintain; if it does, its lawfulness depends on whether or not the interference is outweighed by the rule’s legitimate justifications. In addition, LA Specialty Produce defined the “reasonable employee” from whose perspective a challenged rule is to be viewed. My colleagues criticize Boeing, and they reject LA Specialty Produce’s definition of the “reasonable employee.” As explained below, I disagree with their criticisms.

First, the Boeing/LA Specialty Produce balancing standard accords with judicial precent. Nearly 80 years ago, the Supreme Court held the Board duty-bound to “work[] out an adjustment between” employee rights under the Act and employers’ right to maintain rules that advance their legitimate interests,⁴⁹ and subsequent decisions of the Court support the view that this ““adjustment” entails balancing employee rights and legitimate employer interests.⁵⁰ When the Board failed to do so and invalidated work rules based solely on their adverse impact on the exercise of Section 7 rights, the First, Third, and Eighth Circuits corrected the misstep. In doing so, the courts took the position that Supreme Court precedent mandates a balancing analysis.⁵¹

Second, the Boeing/LA Specialty Produce balancing standard also accords with the predominant through-line of the Board’s work-rules precedent by giving substantial weight to legitimate employer interests. Although the Board has accommodated employer interests in varying ways--by adopting, for specific types of rules, standards that countenance significant limits on Section 7 activity in order to protect employers’ legitimate interests;⁵² by formulating standards that on their face seemed to make employee rights solely relevant but nevertheless accommodating employers’ legitimate interests in applying those standards;⁵³ or by adopting a standard that expressly balanced employee rights and legitimate employer interests⁵⁴--it has generally accorded substantial weight to both sides of the Republic Aviation balance. To be sure, it has not done so invariably, and its most notable failure in this regard were its work-rule decisions from 2011 to 2017, as explained above. But an unbalanced emphasis on employee rights in its work-rules jurisprudence, at the expense of legitimate employer interests, has been more the exception than the rule over the course of the Board’s history.

Third, the definition of the “reasonable employee” in LA Specialty Produce simply made explicit the Board’s tacit understanding in both Lafayette Park Hotel and Lutheran Heritage. Both the Fox/Liebman dissent in Lafayette Park Hotel and the dissent in Lutheran Heritage made a point of establishing that the rules at issue in those cases could have been interpreted to restrict Section 7 activity. Yet the majority in Lafayette Park Hotel and the decision in Lutheran Heritage were adamant that reasonable employees would not read them that way because they would understand the legitimate interests advanced by those rules and would interpret them in that light.⁵⁵ Implicit in their rationale was a definition of the “reasonable employee” that LA Specialty Produce simply made explicit: one “who is ‘aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job,”’ and who “‘does not view every employer policy through the prism of the NLRA.”’⁵⁶

Fourth, the system of categories that Boeing introduced promised, over time, to provide employers with “certainty beforehand” that particular types of rules would or would not pass muster. See First National Maintenance Corp. v. NLRB, 452 U.S. 666, 679 (1981) (observing that management “must have some degree of certainty beforehand as to when it may proceed to reach decisions without fear of later evaluations labeling its conduct an unfair labor practice”). By contrast, my colleagues’ decision today fails to provide any real guidance to our constituents with regard to the legality of facially-neutral work rules maintained by employers. It inevitably follows this lack of guidance will result in more litigation over this issue, which in turn will require the Agency to devote more of its limited resources on litigation that could have been avoided.

Finally, the Boeing/LA Specialty Produce balancing standard, applied in tandem with LA Specialty Produce’s definition of the “reasonable employee,” is sound as a matter of policy. It treats employees as the mature and intelligent adults they are. It safeguards the exercise of Section 7 rights, while allowing employers to protect their legitimate interests without demanding an impossible-to-achieve linguistic precision. And it accommodates the reality that work rules “are necessarily general in nature” (as the Lutheran Heritage majority recognized)⁵⁷ and cannot eradicate every last possibility that isolated words or phrases might be interpreted as referring to Section 7 activity (as Chairman Gould recognized).⁵⁸ In other words, Boeing and LA Specialty Produce are faithful to the Lutheran Heritage Board’s recognition that, whatever its merits as applied in other contexts, the ambiguity principle ought not apply in work-rules cases.

1. The newly adopted standard is defective on multiple grounds.

The standard my colleagues have adopted is objectionable on several grounds, including, as already discussed, the fact that my colleagues mischaracterize their standard as a modified version of Lutheran Heritage, when in reality it is virtually indistinguishable from the position taken by the dissent in Lutheran Heritage as well as the Fox/Liebman dissent in Lafayette Park Hotel. For the additional reasons set forth below, I disagree that their standard, even if properly characterized, is appropriate. Despite my colleagues’ claim to the contrary, judicial precedent does not support the majority’s standard. The majority cites Republic Aviation in support of their position--specifically, language in the Court’s decision regarding the ““dominant purpose” of the Act, which the Board “is to foster”: “the right of employees to organize for mutual aid without employer interference.” 343 U.S. at 798. But, as discussed above, the Republic Aviation decision expressly held that it is the Board’s duty to “work[] out an adjustment” between employees’ rights and the “equally undisputed right of employers to maintain discipline in their establishments.” Id. at 797-798. As explained above, a standard that relegates the accommodation of employer rights to an affirmative defense that will rarely if ever be successfully established, as does the majority’s standard, does not constitute a reasonable “adjustment” of competing rights. And it does not remotely accomplish the Board’s “delicate task” of balancing employee rights and legitimate employer interests, which the Court emphasized elsewhere, NLRB v. Erie Resistor Corp., 373 U.S. at 229, and which three circuit courts have held that the Board is required to undertake.⁵⁹

My colleagues assert that “[d]uring the 13 years when the Lutheran Heritage standard was in place,” no reviewing court rejected the Lutheran Heritage standard, and they cite a number of cases in support.⁶⁰ Of course, this s the question by assuming that the Lutheran Heritage standard was in place for 13 years. As I have shown, it was not. But setting that aside, the circuit court cases my colleagues cite fail to help their cause, for several reasons.

First, in the overwhelming majority of those cases, the court merely stated, or stated and applied, the Lutheran Heritage “would reasonably construe” standard without any indication that any party had challenged it. Accordingly, in most of those cases, the standard itself was not at issue. Moreover, in the rare instances when the standard itself was challenged, the courts’ endorsement of it was tepid at best. See G4S Secure Solutions, Inc. v. NLRB, 707 Fed.Appx. at 613 n.2 (stating that because a prior panel had approved the Lutheran Heritage test, the court was “‘bound to follow [that approval] regardless of our view of [its] correctness”DD’) (quoting United States v. Doyle, 857 F.3d 1115, 1119 (11th Cir. 2017) (alterations in G4S)); NLRB v. Northeastern Land Services, Ltd., 645 F.3d at 483 (“Some may think this result unattractive, but the Board’s [Lutheran Heritage] rule is intended to be prophylactic and in any event is subject to deference.”).⁶¹

Second, one of the circuit court cases the majority cites as upholding Lutheran Heritage did not present a rules-maintenance issue at all. In Care One at Madison Avenue, LLC v. NLRB, 832 F.3d at 351, the issue was whether the employer violated the Act by posting a memo that reminded employees of the employer’s workplace violence prevention policy. The theory of the violation was that by posting the memo just 3 days after a representation election that concluded a peaceful organizing campaign devoid of workplace violence, the employer effectively threatened employees that “taking a position in the workplace regarding union rights” would be viewed as violence and incur discipline. Id. at 363. Thus, the unfair labor practice at issue was an 8(a)(1) threat, and the court emphasized that the workplace violence prevention policy itself was not at issue. Id.

Third, some of the circuit court cases my colleagues rely on actually militate against their decision. In Cintas Corp. v. NLRB, the Court of Appeals for the District of Columbia Circuit cited and applied Lutheran Heritage, but in doing so, it quoted with approval language from that decision emphasizing that a reasonable employee would not read a challenged rule to apply to Section 7 activity “‘simply because the rule could be interpreted that way.”’ 482 F.3d at 467 n.1 (emphasis in Lutheran Heritage). The Court of Appeals for the Fifth Circuit underlined the same point: “It must be reasonable for employees to interpret the [rule] to prohibit Section 7 activities, however; it is not enough that it merely could possibly be read that way.” NLRB v. Arkema, Inc., 710 F.3d at 318 (citing Lutheran Heritage, 343 NLRB at 647). And the Fifth Circuit gave this point even more emphasis in T-Mobile USA, Inc. v. NLRB: “The appropriate, objective inquiry is not whether the rules ‘could conceivably be read to cover Section 7 activity, even though that reading is unreasonable,’ but rather whether ‘a reasonable employee reading the[] rules would . . . construe them to prohibit conduct protected by the Act.”’ 865 F.3d at 271 (quoting Lutheran Heritage, 343 NLRB at 647) (emphasis in T-Mobile). My colleagues, of course, take the opposite position, holding that a work rule is presumptively unlawful if it can be read to restrict or prohibit Section 7 activity. It is particularly puzzling that they would cite the Fifth Circuit’s decision in T-Mobile as favorable to their decision, considering that T-Mobile was the source the Board drew from in LA Specialty Produce for its definition of the reasonable employee, a definition my colleagues expressly reject. See T-Mobile USA, Inc. v. NLRB, 865 F.3d at 271: “[T]he “‘reasonable employee’ is a T-Mobile employee aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job. The reasonable employee does not view every employer policy through the prism of the NLRA. Indeed, ‘[the Board] must not presume improper interference with employee rights”DD’ (quoting Lutheran Heritage, 343 NLRB at 646).

Finally, and decisively, to the extent that the circuit court cases the majority cites can be read as upholding the Lutheran Heritage standard, that would help my colleagues’ cause only if they were adopting that standard. As I have shown, they are not.

Next, the standard the majority adopts today reflects an outlier position in the history of Board precedent. While the Board did give one-sided emphasis to Section 7 rights in some early cases and from 2011 to 2017, this was the exception. As a rule, the Board has accorded substantial weight to legitimate employer interests in deciding work-rule issues, whether by expressly balancing employee rights against those interests as in Waco, Boeing, or LA Specialty Produce, by factoring the legitimate interests advanced by a challenged rule into the application of the “reasonable tendency to chill” or ““would reasonably construe” standards in Lafayette Park Hotel and Lutheran Heritage, respectively, or by embedding the employer’s legitimate interests in its longstanding standards for no-solicitation, no-distribution, and off-duty-access rules.

Indeed, the standard my colleagues have adopted directly conflicts with longstanding Board precedent. Under their standard, a rule is presumptively unlawful if a reasonable employee (as they define that being) could interpret it to restrict or prohibit Section 7 activity. In other words, a challenged rule will be found presumptively unlawful under their standard without any consideration of the legitimate employer interests it advances. Those interests are considered, if at all, only after a rule has been deemed presumptively unlawful (and only if the employer proves they are substantial as well as legitimate and also proves, I know not how, that they cannot be advanced by a more narrowly tailored rule). This standard, however, cannot be reconciled with Board precedent governing no-solicitation and no-distribution rules. Under Board law, no-solicitation and no-distribution rules are presumptively unlawful only if they are broader than necessary to accommodate the employer’s legitimate and substantial interests. More specifically: a no-solicitation rule is presumptively unlawful only if it is broader than necessary to accommodate the employer’s legitimate and substantial interest in preserving working time for work, and a no-distribution rule is presumptively unlawful only if it is broader than necessary to accommodate the employer’s legitimate and substantial interests in preserving working time for work and keeping litter out of work areas. However, it is unquestionable that a lawful no-solicitation rule that prohibits solicitation during working time restricts union solicitation, and a lawful no-distribution rule that prohibits distribution during working time and in work areas at any time restricts distribution of union literature. Both rules reasonably could be interpreted to restrict Section 7 activity, because they do. Accordingly, under my colleagues’ standard, both would be presumptively unlawful, contrary to longstanding precedent.

The majority’s understanding of a reasonable employee also runs counter to longstanding Board precedent. Although the Board did not expressly define the term reasonable employee until its 2019 decision in LA Specialty Produce, the definition it borrowed from the Fifth Circuit’s T-Mobile decision simply made explicit what the majority in Lafayette Park Hotel and Lutheran Heritage took for granted: that where a challenged rule advances legitimate employer interests and does not expressly refer to Section 7 activity, reasonable employees will understand it in that light, not as applying to Section 7 activity. As Chairman Gould observed, “it is not enough to find that certain language in a rule is broad enough to arguably apply to Section 7 activity. The appropriate inquiry must center on whether a reasonable employee could believe that the rule prohibits protected activity.” Lafayette Park Hotel, 326 NLRB at 830 (Chairman Gould, further concurring). For my colleagues, however, it is precisely enough to deem a rule presumptively unlawful “that certain language in a rule is broad enough to arguably apply to Section 7 activity,” since the “reasonable employee” they posit could interpret such a rule to restrict the exercise of Section 7 rights.

To justify their definition of the “reasonable employee,” the majority relies on language from the Supreme Court’s decision in Gissel Packing, where the Court referred to “the economic dependence of the employees on their employers, and the necessary tendency of the former, because of that relationship, to pick up intended implications of the latter that might be more readily dismissed by a more disinterested ear.” NLRB v. Gissel Packing Co., 395 U.S. 575, 617 (1969). My colleagues make this passage “central to [their] analysis.” I find it inapposite, for two reasons.

First, the Court referred to the tendency of economically dependent employees to pick up intended implications of statements made by their employer. Under the standard my colleagues have adopted, however, employers will routinely be found to violate the Act by maintaining work rules they never intended to implicate Section 7 activity in any way.

Second, when it wrote these words, the Court was referring to a category of statements by employers vastly different from work rules, particularly work rules that do not expressly refer to Section 7 activity--namely, predictions of dire consequences if employees unionize. Gissel Packing consolidated several cases, one of which involved the Sinclair Company, “a producer of mill rolls, wire, and related products at two plants in Holyoke, Massachusetts.” Id. at 587. When Sinclair’s president first learned, in 1965, that the Teamsters had launched an organizing effort, he made the following statements to all Sinclair employees.

• A strike in 1952 “almost put our company out of business,” and employees were forgetting the “lessons of the past.”

• The company was still on “thin ice” financially, the union’s “only weapon is to strike,” and a strike “could lead to the closing of the plant.”

• Because of their age and limited skills, Sinclair’s employees might not be able to find reemployment if they lost their jobs as a result of a strike.

• If the employees did not believe the company could close, they should “look around Holyoke and see a lot of them out of business.”

Similar communications were made to employees in the weeks immediately preceding the election, including in a pamphlet that displayed “a large cartoon showing the preparation of a grave for the Sinclair Company and other headstones containing the names of other plants allegedly victimized by the unions.” Id. at 587-588.

One of the issues in Gissel Packing was whether these statements were protected statements of opinion under Section 8(c) of the Act or coercive threats in violation of Section 8(a)(1). According to the Court, deciding that issue required balancing the relevant respective rights of employers and employees, a balancing that, given the explosiveness of the statements--in essence, if you vote for the union, you will lose your job--“must take into account the economic dependence” of employees on their employer. Id. at 617. This principle my colleagues lift out of its context in Gissel Packing and apply to the entirely different context at issue here. Their position is that because the “reasonable employee” should be understood as an economically dependent and vulnerable employee when deciding whether an employer violates the Act by making statements expressly predicting that voting for a union will have dire consequences, the “reasonable employee” must be understood exactly the same way when deciding whether a challenged work rule that makes no reference whatsoever to Section 7 activity may be lawfully maintained. This faulty logic is akin to reasoning that because it makes sense to board up houses before a hurricane, houses must be similarly protected from a breeze.

Finally, I turn to the affirmative defense the majority provides employers, which enables my colleagues to claim that their standard adjusts the competing rights of employees and employers and thus accords with Republic Aviation. I recognize that this defense seemingly distinguishes my colleagues’ standard from that endorsed by the dissenters in Lafayette Park Hotel and Lutheran Heritage and applied in 2 Sisters Food Group and subsequent cases. Whether there is really any substantive difference remains to be seen.

To review, once a work rule is deemed presumptively unlawful--under the new standard, which applies retroactively, most probably are⁶²--the employer escapes unfair labor practice liability by proving that the challenged rule “advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule” (emphasis added). The majority’s decision leaves unanswered a number of questions about this defense.

For example, a presumptively unlawful rule under the majority’s standard is a rule that could be interpreted, by a reasonable employee as the majority defines that being,⁶³ to restrict or prohibit Section 7 activity. In other words, a presumptively unlawful rule is an overbroad rule, and an overbroad rule can always be narrowed. Given as much, how will an employer prove that it is unable to advance its legitimate and substantial interest or interests with a more narrowly tailored rule? Would an employer have to show that it maintains the current rule because a prior narrower rule failed adequately to advance the relevant interest or interests? Would it suffice for an employer to introduce evidence that it considered (but did not actually implement) a narrower rule and rejected it as unlikely to advance the relevant interest or interests? What if the Board finds a rule unlawful, the employer narrows it, and the narrowed rule fails adequately to advance the relevant interest or interests. Now that the original rule has been shown to be the narrowest possible rule, may the employer reinstate it, even though doing so would seemingly defy the Board’s prior decision?

Time will tell, but I suspect that the affirmative defense my colleagues have devised is merely a Republic Aviation fig leaf, unlikely ever to be successfully established but enabling them to claim that they have “work[ed] out an adjustment” of competing employee and employer rights.⁶⁴ Employers would be well advised to assume as much and try to avoid a finding of presumptive unlawfulness in the first place by retaining competent labor counsel to craft, for inclusion in their employee handbooks, language that would make it impossible--even for my colleagues’ version of the reasonable employee--to interpret any rules contained therein to restrict Section 7 activity.

1. The majority errs in applying its new standard retroactively.

For all the reasons set forth above, Boeing and LA Specialty Produce should not be overruled. For those that follow, if those decisions are to be overruled, the majority should overrule them prospectively only.

The Board must not apply a new rule of decision retroactively--meaning in all pending cases in whatever stage--if doing so would work a manifest injustice. SNE Enterprises, 344 NLRB 673, 673 (2005). To determine whether retroactive application would cause manifest injustice, the Board considers “the reliance of the parties on preexisting law, the effect of retroactivity on accomplishment of the purposes of the Act, and any particular injustice arising from retroactive application.” Id. Each of these considerations militates against retroactive application.

Regarding reliance on preexisting law, Boeing has been the governing precedent for deciding work-rule allegations for more than 5-1/2 years. There is no reason to believe that employers have not framed their work rules in reliance on its balancing standard, particularly for rules covered by category determinations in Boeing itself and in cases applying it. The majority neither has nor cites evidence to support their empirical claim that reliance on Boeing has been “minimal.”

Next, retroactive application does not accomplish the purposes of the Act. As relevant here, those purposes have been authoritatively defined by the Supreme Court as requiring the Board to work out an adjustment between employees’ rights and employers’ legitimate interests. Multiple courts of appeals have held that the required adjustment entails a balancing of employee rights and employer interests. At minimum, the Board must give substantial weight to the latter. The standard my colleagues have adopted does neither.

Finally, by applying their decision retroactively, the majority pulls the rug out from under the feet of respondent employers in pending cases. My colleagues say this inflicts no particular injustice because the remedy in such cases will be an order to rescind the previously lawful but now-offending rule, “leaving the employer free to replace the rule with a more narrowly tailored substitute.” That depends on the rule. As I explain below, there is now no such thing as a lawful investigative confidentiality rule, however “narrowly tailored.” More importantly, the majority defends their position by invoking the remedy for the unfair labor practice findings that retroactivity will entail, skipping over those findings themselves. By applying their decision retroactively, my colleagues predictably make employers in pending cases who were law-abiding yesterday into lawbreakers today. Moreover, depending on the circumstances, retroactive application of today’s decision in a pending case could make the difference between issuance of a narrow “in any like or related manner” and a broad “in any other manner” cease-and-desist order, and between standard and extraordinary remedies. See Noah’s Ark Processors, LLC d/b/a WR Reserve, 372 NLRB No. 80 (2023).

1. The Board should retain Apogee Retail.

“Having rescinded the standard adopted in Boeing and revised in LA Specialty Produce,” writes the majority, “we necessarily reject those decisions and their progeny” (emphasis added). With those three words, my colleagues overrule in relevant part every case in which the Board applied Boeing. Although I dissent from each of these overrulings, one now-overruled case particularly warrants further discussion: Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (2019). Because the interests at stake in that case are so important, my colleagues’ decision to overrule Apogee without even attempting to address the specific type of rules at issue in that case is particularly unfortunate.

In Apogee Retail, the Board held that rules requiring employees to maintain the confidentiality of workplace investigations for the duration of the investigation are categorically lawful to maintain.⁶⁵ Applying Boeing, the Board in Apogee implemented the Supreme Court’s instruction to “work[] out an adjustment” between employees’ Section 7 rights and employers’ legitimate interests. It acknowledged that employees may be engaging in protected concerted activity when they discuss incidents of workplace misconduct.⁶⁶ But it also recognized that investigative confidentiality rules serve critically important interests, for employers and employees. Confidentiality ensures that potential witnesses will not coordinate their accounts of relevant events or confuse their own recollections with those of others. It also allows employers to “quiet[] fears that truthful disclosures may lead to retaliation”⁶⁷ by assuring employees that their candid statements will not be revealed--a vitally important assurance, since disclosures made in the course of an investigation may reveal grave wrongdoing, such as discrimination, harassment, bullying, or criminal misconduct. Such investigations also may implicate employees or supervisors with whom the interviewed employee has regular contact. It is essential that an employer be able to assure employees that their reports will be kept strictly confidential. Doing so also serves the employer’s interest in obtaining evidence promptly, while employees’ memory of relevant events is fresh.⁶⁸

Recognizing, moreover, that the interests served by investigative confidentiality rules have their greatest saliency while the investigation is ongoing, the Board in Apogee distinguished between rules that limit confidentiality to the duration of the investigation and those that do not, making the former categorically lawful to maintain and examining the latter on a case-by-case basis. In this way, Apogee gave employers “certainty beforehand” that an investigative confidentiality rule limited to open investigations will be deemed lawful, removing “fear of later evaluations labeling its conduct an unfair labor practice.”⁶⁹

The Board in Apogee overruled Banner Estrella Medical Center,⁷⁰ a pre-Boeing decision that effectively prohibited employers from maintaining investigative confidentiality rules.⁷¹ Banner Estrella made a pretense of accommodating legitimate employer interests, while in fact giving determinative weight to employee rights (like other pre-Boeing decisions issued by the Board in and after 2011), contrary to the Supreme Court’s mandate to balance rights and interests. Banner Estrella did allow for the possibility that particular investigations might remain confidential, but it effectively prohibited employers from requiring confidentiality from the outset, by workplace rule or otherwise, since an employer could not know whether it would be able to make the showing Banner Estrella demanded until its investigation was underway.

Under Banner Estrella, investigative confidentiality was required to be dealt with on a case-by-case basis, and an employer violated Section 8(a)(1) by restricting employee discussions of any workplace investigation unless it presented “objectively reasonable grounds for believing that the integrity of the investigation w[ould] be compromised without confidentiality.”⁷² Specifically, under Banner Estrella, the employer was required to prove, “with respect to each specific investigation in which confidentiality was required, that ‘witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, and there [was] a need to prevent a cover up,”⁷³ or other “comparably serious threats” to the integrity of the investigation.⁷⁴

As the Board explained in Apogee, the Banner Estrella decision

disregarded the reality that a preliminary investigation is necessary in order to determine whether “witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, and there is a need to prevent a cover up.” Since the employer would not, at the outset, have the information it needs to make that determination, under Banner Estrella it is unable to provide the very assurances of confidentiality necessary to obtain the information it needs to make the determination Banner Estrella demands.⁷⁵

Thus, under the pre-Boeing approach in Banner Estrella, employers could not maintain investigative confidentiality rules at all. The Banner Estrella Board ignored the legitimate--indeed, critical--employer and employee interests served by policies that require investigative confidentiality from the outset of an investigation, focusing instead on the potential infringement on Section 7 rights. Not only did this invalidate workplace policies maintained by countless employers, it was also contrary to EEO and OSHA workplace-investigation guidance.⁷⁶ Banner Estrella forced employers into a bind. They could choose to defy the law by requiring confidentiality from the outset, at the risk of incurring unfair labor practice liability. Or they could comply with the law but, in doing so, sacrifice the benefits of confidentiality, not just for employers, but for employees as well.

Apogee struck an appropriate balance between employee rights and employer (and employee) interests. My colleagues do a disservice to employers and employees by overruling it.

Conclusion

The majority says that employers are free to maintain work rules that protect their legitimate interests, so long as they narrowly tailor their rules so that no word or phrase could possibly be interpreted, by a reasonable employee as my colleagues define that being--i.e., an unreasonably hypervigilant employee--to restrict Section 7 activity. However, as the Board observed in Boeing, and as Chairman Gould explained nearly 25 years ago in Lafayette Park Hotel, it is virtually impossible to craft work rules that are general enough to serve their intended lawful purpose without being susceptible to an interpretation that infringes on Section 7 rights.⁷⁷ Moreover, the majority applies their decision retroactively. Employers therefore should assume that simply by maintaining work rules, they are violating the National Labor Relations Act. We have returned to a bygone era, from 2011 to 2017, when the Board majority rarely saw a challenged rule it did not find unlawful.

The majority criticizes Boeing as giving “too much weight to employer interests” and “too little weight to the burden a work rule could impose on employees’ Section 7 rights.” But they fail to explain why their standard, which claims to balance these interests but inherently privileges employee rights while placing scant, if any, weight on employer interests, is any better. The standard that they embrace today is not only inconsistent with the balancing required under Republic Aviation but it makes it nearly impossible for employers to defend their rules in furtherance of legitimate employer interests, such as ensuring that a workplace is safe or that employees can work without being subject to abuse, for example. Not only is this not what the Act intended but it assumes that adults are unable to recognize for themselves whether or not such rules, read in context, are intended to apply to, or will be enforced against, employees’ exercise of their Section 7 rights. Because my colleagues’ decision here fails to pay more than lip service to the required balancing of employees’ rights and employers’ legitimate business interests, I respectfully dissent.

DECISION AND ORDER

BY CHAIRMAN MCFERRAN AND MEMBERS KAPLAN, WILCOX, AND PROUTY

In March 2020, during the early stages of the COVID19 pandemic, the Respondent terminated employee Ronald Vincer for raising concerns about its COVID protocols and decision to remain open for business.  The Region issued a complaint alleging that Vincer had been discharged for engaging in protected concerted activity in violation of Section 8(a)(1) of the Act. On May 27, 2022, Administrative Law Judge Michael A. Rosas issued the attached decision.¹  In finding the violation, the judge concluded that Vincer’s COVID-related complaints constituted concerted activity under the Meyers Industries cases.^[1]  The Respondent excepts, arguing, among other things, that Vincer’s COVID-related complaints constituted mere individual “griping,” not protected concerted activity, under the Board’s decision in Alstate Maintenance, LLC, 367 NLRB No. 68 (2019).  The General Counsel filed cross-exceptions contending that the judge reached the correct result, but that Alstate Maintenance should be overruled because it deviated from Meyers II by narrowly construing and thereby limiting concerted activity.

We affirm the judge’s conclusion that the Respondent violated Section 8(a)(1) by discharging Vincer. As explained below, although we agree with the judge that, contrary to the contentions of the Respondent, the finding of a violation is warranted under extant law, including Alstate Maintenance, we further find, in general agreement with the General Counsel, that Alstate Maintenance invited unwarranted restrictions on what constitutes concerted activity under Section 7 of the Act and is at least in tension with, if not contrary to, Meyers II.  Accordingly, we overrule Alstate Maintenance to better promote the policies of the Act, consistent with prior precedent.  Applying the standard articulated in Meyers II, we affirm the judge’s conclusion that the Respondent violated Section 8(a)(1) by discharging Vincer.

I. BACKGROUND

The Respondent manufactures plastic storage products at a plant in Burgettstown, Pennsylvania.  Approximately 26 to 33 employees work in the plant, which includes a machine shop, a fabricating department, and an office. 

The Respondent hired Vincer as a fabricator in 2015.  Managers considered him to be a highly skilled employee, but Vincer was also very social, and he would often talk with other employees at their workstations, especially James Boustead.  Casual discussion among employees while they worked was commonplace and accepted by management. 

The Respondent periodically counseled Vincer about performance deficiencies, including excessive talking, distracting coworkers, and using his cell phone.  On March 5, 2020, Donnie Miller, the Respondent’s owner, counseled Vincer and Boustead about excessive talking and production times.  However, Vincer was not issued a written warning.^[2]

On March 6, the Pennsylvania governor issued an order proclaiming a disaster emergency as a result of the COVID pandemic.  On March 16, the governor announced statewide mitigation efforts, effective March 17, including a stay-at-home-order and the closure of non-life-sustaining businesses.  The announcement, however, did not identify which businesses qualified as life-sustaining.

Around this time, the emerging pandemic was a frequent topic of conversation within the plant.  Plant Manager Blake Trenary and Chief Operating Officer Timothy Zeliesko periodically updated employees about developments.  Vincer and Boustead spoke to each other about the pandemic every day.  Boustead mentioned that he was at high risk for serious illness because of past medical problems.  Vincer told Boustead and other employees that he believed that the Respondent was not an essential or lifesustaining business and should close.  He also suggested to Boustead that someone should contact the authorities and tell them that the Respondent was still open.

On March 16, the day that the governor announced the closure of nonessential businesses, Zeliesko convened an all-hands meeting in the middle of the plant.  Plant Manager Trenary was also present.  At the meeting Zeliesko stated his belief that the Respondent would be classified as an essential business and outlined the health and safety measures taken by the company.  Vincer, clearly upset, asserted that the Respondent did not have the proper precautions in place and that the employees should not be working (“we shouldn’t be working”).^[3]  Several other employees also raised questions regarding whether Respondent qualified as an essential business.^[4] Zeliesko replied that the employees needed to keep working until there was further clarification from the state government.

On March 18, employee Larry Pierson learned that his wife had been sent home from her job at a nursing home with flu-like symptoms.  Pierson shared that information with Vincer, who suggested that Pierson inform Trenary. 

Pierson did so, and Trenary sent him home.  On Monday, March 23, Boustead informed Vincer that Pierson had returned to work on March 20.  (Vincer had been off that day.)  Concerned about the Respondent’s protocols, Vincer asked Zeliesko what the requirements were for employees to return to work after having or being exposed to COVID.  Zeliesko replied that he would have to get backto him.  Vincer also asked Zeliesko if he thought the company should be open and operating.  Zeliesko replied that the Respondent believed that it was a life-sustaining business.

After his conversation with Zeliesko, Vincer spoke with Boustead.  Vincer urged him to speak with Trenary or Zeliesko about his health vulnerabilities and the protocols the Respondent was putting in place when people were sick or exposed to COVID.  Boustead did speak about his concerns with Trenary, who assured him that the Respondent would follow proper procedures, make anyone who came into contact with COVID stay home, and inform him if he should get tested.^[5][6]

On March 24, Trenary observed Vincer text messaging on his cell phone and reported it to Zeliesko.  Almost immediately, and without further investigation, they went to Miller and recommended that Vincer be terminated.  Miller agreed.  Shortly thereafter, Miller, Zeliesko, and Trenary informed Vincer that he was terminated for poor attitude, talking, and lack of profit.

The judge found that Vincer’s conduct—raising concerns to the Respondent about its COVID protocols and its decision to remain open for business—was both concerted and for mutual aid or protection.  He rejected the Respondent’s contentions that Vincer’s complaints constituted mere individual “griping.”  Applying Wright Line,⁸ the judge found that the Respondent discharged Vincer for his protected concerted activity in violation of Section 8(a)(1), rejecting the Respondent’s assertion that it terminated him for poor performance and violating its policies.  

On exceptions, the Respondent argues that Vincer’s conduct was not concerted under Alstate Maintenance.^[7]  The General Counsel cross-excepts, asserting that Alstate Maintenance misconstrued the Meyers Industries cases, improperly narrowed the definition of concerted activity by imposing a limited list of factors that will support a finding of intent to induce group action, and thus undermined the Act’s purpose of protecting employees who seek to improve their working conditions.  Therefore, the General Counsel argues, Alstate Maintenance should be overruled.  In response, the Respondent contends that Alstate Maintenance was correctly decided and is consistent with Meyers II.

II. DISCUSSION

Having examined Alstate Maintenance and the premises upon which it rests, we conclude that it should be overruled. For the reasons explained below, we find that Alstate Maintenance established an unduly restrictive test that is at least in tension with Meyers II, unnecessarily overruled WorldMark by Wyndham, 356 NLRB 765 (2011), and failed to fully promote the policies of the Act.

Section 8(a)(1) makes it an unfair labor practice “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [S]ection 7.”  Section 7 establishes the right “to engage in . . . concerted activities for the purpose of . . . mutual aid or protection.”  “To be protected under Section 7 of the Act, employee conduct must be both ‘concerted’ and engaged in for the purpose of ‘mutual aid or protection.’”  Fresh & Easy Neighborhood Market, Inc., 361 NLRB 151, 152 (2014).

In Meyers I, the Board held that an employee’s activity is concerted when it is “engaged in with or on the authority of other employees, and not solely by and on behalf of the employee himself.”  268 NLRB at 497.  Subsequently, in Meyers II, the Board clarified that concerted activity under Section 7 “encompasses those circumstances where individual employees seek to initiate or to induce or to prepare for group action, as well as individual employees bringing truly group complaints to the attention of management.”  281 NLRB at 887.  However, in Meyers I, and again in Meyers II, the Board cautioned that this definition of concerted activity “is by no means exhaustive” and it acknowledged that a “myriad of factual situations . . . have arisen, and will continue to arise, in this area of the law.” 268 NLRB at 496–497; 281 NLRB 887.  The Board emphasized therefore that “the question of whether an employee engaged in concerted activity is, at its heart, a factual one" based on the totality of the record evidence.  268 NLRB at 497; 281 NLRB at 886.

The Board also reaffirmed that activity that at inception involves only a speaker and a listener can be concerted, “for such activity is an indispensable preliminary step to employee self-organization.”  Id. at 887 (quoting Meyers I, 268 NLRB at 494; Root-Carlin, Inc., 92 NLRB 1313, 1314 (1951)).  Notably, the “object of inducing group action need not be express,” and an employee’s statement may, in certain contexts, “implicitly elicit[] support from his fellow employees.”  Whittaker Corp., 289 NLRB 933, 933–934 (1988).  Thus, in the decades that followed Meyers I and Meyers II, the Board conducted a thorough review of all the record evidence in order to determine whether an individual employee’s protest had “some linkage to group action.”  Id. at 884.

In Alstate Maintenance, however, the Board majority cast aside this holistic approach and, in its place, adopted a checklist of factors that imposed significant and unwarranted restrictions on what constitutes concerted activity.  In doing so, the Board narrowed the circumstances in which statements made by individual employees in front of their coworkers will be found concerted.  367 NLRB No. 68, slip op at 7.  The majority held that “an individual employee who raises a workplace concern with a supervisor or manager is engaged in concerted activity if there is evidence of ‘group activities’—e.g., prior or contemporaneous discussion of the concern between or among members of the workforce.” Id., slip op at 3.  The majority also held that “[t]he fact that a statement is made at a meeting, in a group setting or with other employees present will not automatically make the statement concerted activity.”  Id., slip op at 7.  “Rather, to be concerted activity, an individual employee’s statement to a supervisor or manager must either bring a truly group complaint regarding a workplace issue to management’s attention, or the totality of the circumstances must support a reasonable inference that in making the statement, the employee was seeking to initiate, induce or prepare for group action.”  Id.  The majority decision then set forth a list of five “relevant factors that would tend to support drawing such an inference”:

(1) the statement was made in an employee meeting called by the employer to announce a decision affecting wages, hours, or some other term or condition of employment; (2) the decision affects multiple employees attending the meeting; (3) the employee who speaks up in response to the announcement did so to protest or complain about the decision, not merely . . . to ask questions about how the decision has been or will be implemented; (4) the speaker protested or complained about the decision’s effect on the work force generally or some portion of the work force, not solely about its effect on the speaker him- or herself; and (5) the meeting presented the first opportunity employees had to address the decision, so that the speaker had no opportunity to discuss it with other employees beforehand.

Id.^[8]

The decision in Alstate Maintenance overruled WorldMark by Wyndham, supra.  In WorldMark, the Board found that an employee engaged in concerted activity when he complained to a supervisor in front of other employees, one of whom then joined in the protest, about a change in dress code that would require employees to tuck in their shirts.  The Board observed generally that the Board had consistently found activity concerted when, in front of their coworkers, single employees protest terms and conditions of employment common to all employees.  Id. at 766.  More specifically, the Board in WorldMark looked at all of the surrounding circumstances and found concerted activity based on the following facts: (1) the employee took the first opportunity to question the newly announced dress code change; (2) the dress code affected him and his coworkers as a group; (3) the employee presented his objection in group terms, using “we,” not “I”; (4) the employee knew from past experience that his coworkers preferred to wear their shirts untucked, and thus the employee would reasonably expect this issue to be a matter of concern to his coworkers; and (5) in fact, a coworker did join his protest.  Id.

The Alstate Maintenance majority, however, fundamentally misconstrued the WorldMark decision, insisting that it wrongly announced a per se rule that an employee’s protest made in any group context is always a concerted inducement to group action.  367 NLRB No. 68, slip op at 7.  WorldMark neither established nor applied a per se rule.  Rather, as described above, the Board considered all the surrounding circumstances in finding that the employee’s protest was an inducement to group action.  The WorldMark decision merely reflected the Board’s longstanding recognition that a complaint made in front of a group of coworkers is a relevant consideration that, in combination with other relevant facts, may support an inference that an employee is seeking to induce group action.^[9]

The Alstate Maintenance majority also found it problematic that the employee in WorldMark—like the protesting employee in Alstate Maintenance—raised his objection in an impromptu gathering of employees, rather than in a formal employer-employee meeting.  Id., slip op. at 5.  The majority cited decisions in which employee protests in formal group meetings were found to be concerted.  In Chromalloy Gas Turbine Corp., 331 NLRB 858 (2000), the Board found that an individual employee’s protest of a new break policy was concerted under all the circumstances.  To be sure, the Board relied on the fact that the employee lodged her protest during a formal meeting called by the employer to discuss the policy, which often suggests an intent to induce group action.  But the Board did not hold that concert may be found only in such formalized meetings.^[10]  Similarly, in Whittaker Corp., supra, the Board found that an employee engaged in concerted activity when he objected, in a formal employer-employee meeting, to the employer’s announcement that employees would not be receiving their regular annual wage increase.  As in Chromalloy, the Board noted that, “[p]articularly in a group-meeting context, a concerted objective may be inferred from the circumstances.”  289 NLRB at 934.  But, again, the Board, quoting Meyers I, emphasized that “the question of whether an employee engaged in concerted activity is, at its heart, a factual one.”  Id. at 933.  Likewise, in Cibao Meat Products, the Board found concerted activity where an employee voiced his protest during an employer-called meeting, but once again it did not hold that only such a setting could support the finding.  338 NLRB 934 (2003), enfd. mem. 84 Fed.Appx. 155 (2d Cir. 2004), cert. denied 543 U.S. 986 (2004).  In sum, although in each of these cases the Board found that, “particularly in a group meeting,” one might reasonably infer that a protest was intended to induce group action, the Board never held that asserting an objection during a formal meeting was either necessary or sufficient.  Rather, in each case the Board conducted a thorough review of all the facts in finding concerted activity.

Contrary to the assertions of the Alstate Maintenance majority and our concurring colleague, WorldMark is in harmony with this approach, as the Third Circuit implicitly recognized in MCPc, Inc., 813 F.3d 475, 485 (3d Cir. 2016).  In MCPc, in affirming the Board’s finding that an employee engaged in concerted activity when he communicated his dissatisfaction about shared working conditions to a manager during a lunch with his coworkers, the court acknowledged the “long line of decisions by the Board and courts” finding that an individual employee engaged in concerted activity by complaining during formal meetings called by the employer to address the issue.  Id. at 484 (citing cases).  But the court also observed that the Board and other courts of appeals have “extended this line of reasoning to the lone employee who complains to management in a less organized group context.”  Id.  The court stated, “[a]lthough merely complaining in a group setting would surely not be sufficient in itself to transform an individual grievance into concerted activity, we rely on WorldMark by Wyndham for the narrow proposition that in such circumstances a lack of prior planning does not foreclose a finding of concerted activity, where the individual's statements further a common interest or by their terms seek to induce group action in the common interest.”  Id. at 484–485.  Notably, the Third Circuit did not interpret WorldMark as establishing a per se rule that an employee’s protest made in any group context is always a concerted inducement to group action.  This understanding of WorldMark is fully consistent with the Meyers decisions, where (as noted earlier) the Board emphasized that under the non-exhaustive definition of “concerted” given in those cases, “a myriad of factual situations would arise calling for careful scrutiny of record evidence on a case-by-case basis.”  Meyers II, 281 NLRB at 887.

Our concurring colleague asserts that, in order to establish concertedness based on a “truly group complaint” under Meyers II, “the General Counsel must establish that the employee was bringing a complaint to management that had been derived from group action.”  He contends that the employee in WorldMark did not meet this standard because “[t]here is no evidence that the employee had been aware of, let alone part of, any group action with regard to the rumored rule change leading to a truly group complaint.”  Nor, he claims, is there evidence that the employee “asked the manager those questions with the intent of initiating group action.”  Our colleague’s argument, however, is based on an overly circumscribed—and incorrect—interpretation of Meyers II.

As mentioned, in Meyers II, the Board reaffirmed that activity that at inception involves only a speaker and a listener can be concerted, “for such activity is an indispensable preliminary step to employee self-organization.”  281 NLRB at 887.  Contrary to our concurring colleague’s argument, nothing in Meyers II requires that the General Counsel establish that the employee’s complaint “had been derived from group action” (emphasis added).  Rather, Meyers II broadly defines concerted conduct, explaining that, “to qualify as such, it must appear at the very least it was engaged in with the object of initiating or inducing or preparing for group action or that it had some relation to group action in the interest of the employees.”  Id., quoting Mushroom Transportation Co. v. NLRB, 330 F.2d 683, 685 (3d Cir. 1964).^[11]

Our colleague asserts that “the mens rea required to establish the ‘intent to induce’ under Meyers II is that at the time that a single employee raises a concern with the employer, the employee acted with the intent to induce group action” (our colleague’s emphasis).  Thus, our colleague contends that “[t]he fact that an employee’s remark may ‘spark[ ] group action or prompt a “truly group complaint” to crystallize’ does not provide evidence of, nor can it retroactively change, the employee’s initial intent.”  Relatedly, our colleague suggests that a “relation to group action” cannot be found based on group action occurring after the alleged concerted activity.^[12] 

We disagree with our colleague’s claim that contextual evidence arising after the alleged concerted activity, including whether an individual employee’s remark sparks group action, is irrelevant to the determination of concerted activity.  We do not suggest that future action can “retroactively change” whether an initial remark was concerted.   Rather, we find that later events can be relevant objective evidence of whether an employee’s conduct sought to initiate, induce, or prepare for group action, or was related to group action, and that this evidence is appropriately considered in analyzing the alleged concerted activity.  In so finding, we hew to the essential holding of Meyers II that “whether the employee has engaged in concerted activity is a factual one based on the totality of the record evidence.”  Id. at 886.^[13]

WorldMark is fully consistent with these principles and with Meyers II.  Thus, the Alstate Maintenance majority’s reversal of WorldMark was both unwarranted under Meyers IIand—as the Third Circuit’s decision in MCPcmakes clear—unnecessary.  Making matters worse, Alstate Maintenance then announced a new set of factors that served to substantially narrow the situations in which statements made by individual employees in front of their coworkers will be found concerted.  Alstate Maintenance, 367 NLRB No. 68, slip op. at 7.  While capturing some examples of concerted activity, the five factors set forth by the majority are far too restrictive to delineate the boundaries of concerted conduct.  Guided by the Meyers II principle that the question of whether an employee has engaged in concerted activity is a factual one based on the totality of the record evidence, the Board had always before rejected the imposition of strict criteria, such as the majority’s checklist of factors.^[14]

The sound policy reasons underlying such a holistic approach are clear.  As the Board explained in Meyers II, one of the fundamental purposes of Congress’s decision to protect “concerted” activities by employees was to “reduce the industrial unrest produced by the lack of appropriate channels for the collective efforts of employees to improve working conditions.”  281 NLRB at 883.  The Board can best achieve that statutory goal if it avoids an artificially narrow interpretation of “concerted” activity.  But instead, the Alstate Maintenance majority did the opposite.  Its checklist of factors effectively imposes a minimum threshold for concerted activity in place of the factsensitive approach required under Meyers.^[15]  Alstate Maintenance thus suffers from the same flaw the Third Circuit criticized in MCPc when it rejected the employer’s attempt to pick apart an employee’s protest based on assertedly missing elements: it “espouse[d] an unduly cramped interpretation of concerted activity under [Section] 7—one that assesses concerted activity in terms of isolated points of conduct rather than the totality of the circumstances.”  MCPc, 813 F.3d at 486. 

It is easy to see how Alstate Maintenance’s “unduly cramped” checklist of factors is likely to exclude concerted activity from protection.  For example, factor 1— whether the statement was made in an employee meeting called by the employer to announce a decision affecting terms or conditions of employment—fails to recognize that, as discussed above, employees may initiate protest through spontaneous, informal means that also deserve Section 7 protection.^[16]  Factor 3––whether the employee who speaks up in response to the announcement did so to protest or complain about the decision, not merely to ask questions about how it will be implemented—is similarly dismissive of complaints raised outside the formal meeting context, and further suggests that employee questions, as opposed to declarative protests, are less likely to be inducements of group action.  Indeed, the Respondent’s exceptions brief relies on this very factor in arguing that Vincer’s conduct was not concerted, claiming that “asking questions . . . is not concerted activity.”  But asking questions is frequently an indirect way of criticizing and drawing others to oppose a new policy.^[17]  Finally, factor 5— whether the meeting presented the first opportunity employees had to address the decision—suggests that an intent to induce group action is absent if the employee previously had an opportunity to discuss a matter with his coworkers but did not do so.  An employee, however, may choose to confront their employer in the presence of other employees about a matter of mutual employee concern before discussing the matter with coworkers.  An employee’s choice of this approach will not detract from their intent to induce group action, nor does it preclude an employee’s remark from sparking group action or prompting a “truly group complaint” to crystallize.^[18]  Moreover, an employee may choose to confront their employer at a second (or third, or 10th) meeting, regardless of whether the employee had previously discussed the issue with their coworkers, and, in so doing, may strike a chord that causes a “truly group complaint” to manifest or group action to take shape.  Section 7 protects employees who bring a group complaint to the attention of management or make an explicit or implicit call to group action.  It does not impose artificial limits on when and how employees engage in concerted activity.

For the foregoing reasons, we overrule Alstate Maintenance and reaffirm the fundamental principle of Meyers II that “the question of whether an employee has engaged in concerted activity is a factual one based on the totality of the record evidence.”  281 NLRB at 886.  Contrary to Alstate Maintenance, we regard WorldMark as correctly decided and consistent with Meyers II and other prior precedent.

Having considered the totality of the evidence here, we easily conclude that Vincer’s conduct was concerted.  At the all-hands meeting on March 16, 2020, Chief Operating Officer Zeliesko told employees that it was his belief that the Respondent would be classified as an essential business and outlined the health and safety measures taken by the company.  Vincer, clearly upset, spoke up and directly challenged Zeliesko, blurting out that “we shouldn’t be working” and voicing concern over the Respondent’s lack of proper precautions.  Vincer’s COVID-related comments were concerted because they sought to bring “truly group complaints to the attention of management.”  Meyers II, 281 NLRB at 887.  The group nature of Vincer’s complaints is further evinced by the fact that he was not the only employee who voiced concerns about the Respondent being deemed an essential business at this meeting.

Moreover, in the days after the March 16 meeting, Vincer continued speaking to other employees about his concerns regarding the Respondent’s return-to-work procedures foremployees who contracted or were exposed to COVID.  On March 23, Vincer learned that an employee had returned to work on March 20—only 2 days after he had been sent home because his wife was believed to have contracted COVID.  Concerned, Vincer stopped Zeliesko and asked him about the Respondent’s return-to-work protocol and again suggested that the company should close. This conversation is concerted, even though Vincer was speaking one-on-one with Zeliesko, because it was a “logical outgrowth” of the “truly group complaint” Vincer had raised at the March 16 all-hands meeting.  See Mike Yurosek & Son, Inc., 306 NLRB 1037, 1038–1039 (1992), after remand, 310 NLRB 831 (1993), enfd. 53 F.3d 261 (9th Cir. 1995).

For these reasons, we conclude that Vincer’s conduct was concerted under the Board’s longstanding totality-ofthe-circumstances test, which we reaffirm today.^[19]  As stated in footnote 9, above, we adopt the judge’s findings that Vincer’s conduct was also for mutual aid or protection, that it was a motivating factor in his discharge, and that the Respondent failed to prove that it would have discharged Vincer even absent this conduct.  Accordingly, we affirm the judge’s conclusion that the Respondent violated Section 8(a)(1) by discharging Vincer.

AMENDED REMEDY

In addition to the remedies ordered by the judge, and in accordance with our decision in Thryv, Inc., 372 NLRB No. 22 (2022), the Respondent shall compensate Ronald Vincer for any other direct or foreseeable pecuniary harms incurred as a result of his unlawful termination, including reasonable search-for-work and interim employment expenses, if any, regardless of whether these expenses exceed interim earnings.  Compensation for these harms shall be calculated separately from taxable net backpay, with interest at the rate prescribed in New Horizons, 283 NLRB 1173 (1987), compounded daily as prescribed in Kentucky River Medical Center, 356 NLRB 6 (2010).^23. We shall modify the judge’s recommended Order in accordance with our decisions in Paragon Systems, Inc., 371 NLRB No. 104 (2022), and Thryv, supra.  We shall substitute a new notice to conform to the Order as modified.

ORDER

The National Labor Relations Board orders that the Respondent, Miller Plastic Products, Inc., Burgettstown, Pennsylvania, its officers, agents, successors, and assigns, shall

1. Cease and desist from

Discharging employees because they engage in protected concerted activities.

In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.

1. Take the following affirmative action necessary to effectuate the policies of the Act.

(a)  Within 14 days from the date of this Order, offer Ronald Vincer full reinstatement to his former job or, if that job no longer exists, to a substantially equivalent position, without prejudice to his seniority or any other rights or privileges previously enjoyed.

• Make Ronald Vincer whole for any loss of earnings and other benefits, and for any other direct or foreseeable pecuniary harms, suffered as a result of the discrimination against him, in the manner set forth in the remedy section of the judge’s decision as amended in this decision.
• Compensate Ronald Vincer for the adverse tax consequences, if any, of receiving a lump-sum backpay award, and file with the Regional Director for Region 5, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report allocating the backpay award to the appropriate calendar year.
• File with the Regional Director for Region 5, within

21 days of the date the amount of backpay is fixed by agreement or Board order or such additional time as the Regional Director may allow for good cause shown, a copy of Ronald Vincer’s corresponding W-2 forms reflecting the backpay award.

• Within 14 days from the date of this Order, remove from its files any reference to the unlawful discharge, and within 3 days thereafter, notify the employee in writing that this has been done and that the discharge will not be used against him in any way.
• Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.
• Within 14 days after service by the Region, post at its Burgettstown, Pennsylvania facility, copies of the attached notice marked “Appendix.”²⁴ Copies of the notice, on forms provided by the Regional Director for Region 5, after being signed by the Respondent’s authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted.  In addition to physical posting of paper notices, notices shall be distributed electronically, such as by email, posting on an intranet or an internet site, and/or other electronic means, if the Respondent customarily communicates with its employees by such means.  Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material.  If the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since March 24, 2020.
• Within 21 days after service by the Region, file with the Regional Director for Region 5 a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply.

   Dated, Washington, D.C.  August 25, 2023

______________________________________

         Lauren McFerran,                           Chairman

______________________________________

         Gwynne A. Wilcox,                        Member

______________________________________

         David M. Prouty,                            Member

(SEAL)            NATIONAL LABOR RELATIONS BOARD

MEMBER KAPLAN, concurring in the result.

In this case, the judge found that the Respondent unlawfully terminated employee Ronald Vincer for engaging in protected concerted activities when he raised concerns about the Respondent’s COVID-19 protocols and its decision to remain open for business during the pandemic.^[20]  In finding that Vincer engaged in concerted protected conduct, the judge applied the longstanding established law in this area, the two Meyers Industries cases (“Meyers cases”).^[21][22]

My colleagues and I agree that Vincer’s COVID-related complaints constituted concerted activity under the Meyers cases, as found by the judge.  Furthermore, we agree that, even applying the recent Alstate Maintenance³ case, as the Respondent urged in its exceptions brief, the conduct at issue would still be found to be concerted and protected.

That should be the end of the matter, as there is nothing left to discuss that would affect the outcome of this case.  Nevertheless, my colleagues have concluded, in indisputable dicta not necessary to deciding this case, that the Alstate decision “invited unwarranted restrictions on what constitutes concerted activity,” and, therefore, that it must be overruled.^[23]  In asserting that their analyses are not dicta, my colleagues attempt to rely on the fact that “the parties have expressly raised the issue in their exceptions and cross-exceptions.”  To be clear, only the General Counsel raised the issue that Alstate should be overruled; the Respondent merely cited Alstate as relevant precedent.  And my colleagues and I agree that the application of that relevant precedent to the case before us would not affect the outcome.^[24] 

But more importantly, even if both parties had raised the issue, that would not change the fact that my colleagues’ decision to overrule Alstate is completely unnecessary to the holding in this case, which of course is that Vincer engaged in concerted protected activity and that the Respondent violated the Act by terminating him for engaging in that activity.  Courts have long recognized that, regardless of what is said in an opinion, “the decision can hold nothing beyond the facts of that case.”  Edwards v. Prime, Inc., 602 F.3d 1276, 1298 (11th Cir. 2010) (internal citations omitted); see generally Jiminez v. Walker, 458 F.3d 130, 142 (2d Cir. 2006) (“Holdings—what is necessary to a decision—are binding.  Dicta—no matter how strong or how characterized—are not.”); Rohrbaugh v. Celotex, 53 F.3d 1181, 1184 (10th Cir. 1995) (“Dicta are statements and comments in an opinion concerning some rule of law or legal proposition not necessarily involved nor essential to determination of the case in hand.”) (quotation omitted).  The courts have also recognized that, as in court decisions, analyses in Board decisions are dicta where they are not necessary to decide the case at issue.  See, e.g., Allied Mechanical Services v. NLRB, 668 F.3d 758, 768 (D.C. Cir. (2012) (recognizing a statement that “is unnecessary to the decision” is "dicta"); NLRB v. Master Slack, 773 F.2d 77, 82 (6th Cir. 1985) (judge’s finding “was not essential to either his order or the Board's order; it was mere dicta”); NLRB v. Browning-Ferris Industries, 691 F.2d 1117, 1123 (3d Cir. 1982) (finding joint employer analysis to be dicta where the employers were found to be a single employer).

As for my colleagues’ contention that overruling Alstate provides an “alternative rationale” for finding the violation here, I do not disagree that the Board has the ability to proffer an alternative rationale for either finding or not finding a violation when that alternative rationale would be controlling on the facts on the case being litigated.  The problem here, however, is that my colleagues’ overruling of Alstate does not constitute an actual alternative rationale for their holding in this case. 

My colleagues find that Vincer engaged in concerted activity on March 16 by bringing a truly group complaint to the attention of management and that his conduct on March 23 was a “logical outgrowth” of this earlier concerted activity.  Neither of these theories of concertedness was at issue in Alstate.  Alternatively, my colleagues rely on Alstate to find that Vincer intended to initiate group action on March 16.  All the relevant evidence cited and relied upon in the majority decision is consistent with Meyers and Alstate, which my colleagues acknowledge.  But then my colleagues state that they have “explicitly rejected Alstate Maintenance’s articulation of concerted activity and overruled it,” which they follow with a bare assertion that they have applied their new standard “to the facts of this case” to find a violation of the Act.  Although my colleagues assert this to be so, not one of “the facts of this case” is actually cited in or relevant to my colleagues’ analysis rejecting Alstate.^[25] 

Accordingly, I disagree with my colleagues' assertion that their conclusions regarding the propriety of Alstate are anything but nonprecedential dicta.^[26]  Ordinarily I would not comment on dicta, but because the majority is attempting to use dicta to overrule Board precedent, I feel that I must respond, in dicta.

I. THE MEYERS CASES REQUIRE GROUP ACTION OR, IN THE ABSENCE OF GROUP ACTION, THE INTENT TO INITIATE GROUP ACTION

Section 7 of the Act gives employees the right “to selforganization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”  Accordingly, the Board has long recognized that, in order to be protected by Section 7, the conduct at issue must be both “protected”—involving matters of “mutual aid or protection”—and “concerted.”  The definition of what is required under Board law for activity to be considered “concerted” is the central focus of my colleagues’ dicta.

As mentioned above, the standards for determining whether an activity is concerted are controlled by the Meyers cases.  Under these standards, activity is usually deemed concerted only if engaged in by two or more employees.  As the Board held in Meyers I, “[i]n general, to find an employee’s activity to be ‘concerted,’ we shall require that it be engaged in with or on the authority of other employees, and not solely by and on behalf of the employee himself.”^[27][28]  In Meyers II, on remand from the Court of Appeals for the D.C. Circuit, the Board clarified that the Meyers I standard could encompass the actions of single employees, so long as one of two specified requirements was met.  In establishing these two requirements, the Board “fully embrac[ed] the view of concertedness” developed by the Third Circuit in Mushroom Transportation, 330 F.2d 683 (1964). 

In Mushroom Transportation, the court held that “a conversation may constitute a concerted activity although it involves only a speaker and a listener, but to qualify as such, it must appear at the very least it was engaged in with the object of initiating or inducing or preparing for group action or that it had some relation to group action in the interest of employees.”⁹  The court added that “[a]ctivity which consists of mere talk must, in order to be protected, be talk looking toward group action. . . . [I]f it looks forward to no action at all, it is more than likely to be mere ‘griping.’”^[29]  The Board, noting again that it was basing its definition of concertedness on that contained in Mushroom Transportation, reiterated the standard as “those circumstances where individual employees seek to initiate or to induce or to prepare for group action’ or where individual employees bring truly group complaints to the attention of management.’”^[30]  Finally, the Board emphasized that the assessment of “‘whether an employee has engaged in concerted activity is a factual one based on the totality of the record evidence.’”^[31] 

Given that my colleagues’ decision plays loose and fast with the two requirements set forth in Meyers II, it is important to emphasize that every definition of concerted activity focuses on whether or not the activity involves group action.  Accordingly, to establish concertedness in the case of a single employee based on a “truly group complaint,” the General Counsel must establish that the employee was bringing a complaint to management that had been derived from group action.  The quotation from Mushroom Transportation, cited above, requires “some relation to group action.” Id. at 685 (emphasis added).  Further, in discussing group complaints, the Board also cited, with approval, prior cases establishing the principle that “[w]hen the record evidence demonstrates group activities, whether ‘specially authorized’ in a formal agency sense, or otherwise, we shall find the conduct to be concerted.”  Meyers II at 886 (emphasis added).  Similarly, when an employee is not bringing a truly group complaint to the attention of management, the General Counsel must establish that, based on the totality of the circumstances, the activity was taken with a specific purpose:  to initiate group action.

II. THE STANDARD THAT MY COLLEAGUES ARE SUGGESTING CANNOT BE RECONCILED WITH EITHER OF THE TWO CONDITIONS MANDATED BY THE MEYERS INDUSTRIES CASES

(a)  My colleagues oversimply, and thus misrepresent, Board precedent in order to avoid the specific facts and analysis set forth in the cases upon which they rely.

My colleagues take the position that my “view” of what is required under Board precedent to establish concerted activity—consistent with the holding in Alstate—is an “overly circumscribed—and incorrect—interpretation of Meyers II.”  As explained above, my “interpretation” is nothing more than the application of the express language set forth in the Meyers cases and the well-established precedent interpreting them.^[32]  In particular, I note that my colleagues suggest that I have erred by taking the position that Meyers II requires that the alleged concerted conduct arose from group action.^[33]  In making this suggestion, however, they fail to cite a single case^[34] where the Board found that the “relation to group action” requirement, as opposed to the "intent to induce" requirement, was satisfied where the conduct at issue did not arise from existing group action.  Further, my colleagues seem to take the puzzling position that the “group action” that the remark must be related to can be group action that takes place after the remark is made.  Specifically, they contend that the single employee's “impromptu” complaint to management in Alstate was clearly related to group action because, after the single employee raised a concern with management about a customer’s “ungenerous tipping practices,” the employee’s coworkers collectively walked away when the customer arrived and asked for assistance.^[35]  Meyers II, however, does not require that the concerted nature of the activity be judged based on whether it is related to future group action.  Rather, the language of Meyers II establishes that the concerted nature of activity is to be judged at the time the action took place, and my colleagues have failed to cite to any case suggesting otherwise.^[36] 

Similarly, with regard to the “intent to induce” requirement, my colleagues contend that a single “employee . . . may choose to confront their employer in the presence of other employees about a matter of mutual employee concern before discussing the matter with coworkers."  That is true, but the requirement in Meyers II is not that a single employee “chose to raise an issue with management in the presence of other employees.”  Rather, the requirement is that the employee sought to initiate or induce group action.  Put another way, the mens rea required to establish the “intent to induce” under Meyers II is that at the time that a single employee raises a concern with the employer, the employee acted with the intent to induce group action.^[37] 

The fact that an employee's remark may “spark[ ] group action or prompt a ‘truly group complaint’ to crystallize” does not provide evidence of, nor can it retroactively change, the employee's initial intent.¹⁸  And, other than in Worldmark, the Board has never held that simply discussing a concern in the presence of other employees is sufficient to establish the required original intent.¹⁹ 

One fundamental error in my colleagues’ analysis is that it centers on a false premise:  that the Board has “consistently found activity concerted when, in front of their coworkers, single employees protest terms and conditions of employment common to all employees.”  That broad statement, however, is simply not an accurate representation of Board law.  The Board, in fact, has not “consistently found” such activity concerted.  Rather, the Board has consistently inferred group action in scenarios where specific facts are present.  Specifically, the Board has found it appropriate to infer that the action of the single employee was intended to initiate group action when the action was taken in the context of a gathering where employees and management are discussing terms and conditions of employment.^[38]  No such group gathering was in play in WorldMark^[39] or in Alstate, and on that basis the cases upon which my colleagues rely are easily distinguishable.^[40][41] 

The first case upon which my colleagues rely is Whittaker Corp., 289 NLRB 933 (1988).  In that case, employees were called by the employer’s president to a series of meetings, at which he informed the gathered employees that they would not be receiving their regular annual wage increases.  He invited questions from the employees, and several employees asked questions about the announced change.  At the final meeting, after the president informed the gathered employees, an employee stated that he didn’t “remember us being called together when there’s been a good year and saying here’s something extra.  But now that there’s a little downturn, I feel we’re being asked to bear the brunt of it by not having an increase.”  Id. at 933 (internal quotation marks omitted). 

In finding that the activity was protected, the Board primarily relied upon the fact that the case was “strikingly similar” to the circumstances presented in another case, Enterprise Products.²³  Id. at 934.  As in Whittaker, the employer in Enterprise convened a meeting with employees at which it announced that it could not increase employees’ wages or give them their customary annual bonus.  It offered employees the opportunity to respond to the announcement, and one employee expressed a negative reaction to the employer’s announcement.  As in Enterprise, the employer in Whittaker had called employees into a meeting and solicited their responses, thereby “lump[ing] them together and view[ing] them as a group.”  Whittaker at 934 (quoting Enterprise at 949) (additional internal brackets omitted).  Finally, the employee in Whittaker phrased his remarks, in front of a gathering of employees and managers, in terms of “us” and “we.”  The Board noted the employee’s use of those common terms were “[o]bviously . . . addressed to everyone assembled to discuss the topic of the proposed wage increase suspension, including his fellow employees.”  Id. at 934.

The additional cases cited by my colleagues in support of their position also involved single employees voicing concerns in meetings arranged by the employer, where a ^[42]group of employees met with management and terms and conditions of employment were discussed.  Chromalloy Gas Turbine expressly noted that Whittaker was “a case remarkably similar factually to the instant case.”²⁴  Accordingly, applying the finding in Whittaker “that the objective of ‘initiating . . . or . . . inducing group action . . .’ may be inferred from the context of the group meeting where the comments are made,”^[43] the Board found that a single employee, who raised a complaint in a group meeting called to announce changed terms and conditions of employment, engaged in concerted activity.  Similarly, in Cibao Meat Products, the Board quoted from Whittaker and, without any additional analysis, concluded that “an employee, like [the employee at issue in this case], who protests, in the presence of other employees, a change in an employment term affecting all employees just announced by the employer at an employee meeting is engaged in [concerted activity].”  338 NLRB 934, 934 (2003), enfd. mem. 84 Fed.Appx 155 (2d Cir. 2004), cert. denied 543 U.S. 986 (2004) (emphasis added).

Finally, my colleagues cite to MCPc, Inc., 813 F.3d 475 (3d Cir. 2016), which, as they note, expressly states that “merely complaining in a group setting would surely not be sufficient in itself to transform an individual grievance into concerted activity.”  Id. at 484-485.^[44]  More importantly, I must clarify my colleagues’ description of the context in which the employee’s statement was made.  When the manager in charge would visit employer’s location at which the employees worked (in a different state), which occurred once or twice a month, he invited available employees to join him for lunch.  At the lunch at issue, the employees were discussing how busy they were.  In that context, the employee told the manager that they should hire more engineers, especially given the high salary of a new management hire.  The court found that, given that the employee’s comment was made in a “group meeting context,” namely “a team building lunch related to improving working conditions,” the comment was protected. Id. at 484, 486 (emphasis added).

(b) Alstate properly found that the single employee’s activity in that case was not “concerted” under the Meyers cases and, therefore, did not need to be overturned.

My colleagues assert that Alstate must be overruled not only because it reached the wrong result by creating an “unduly restrictive test” based on an “‘unduly cramped’ checklist of factors.”^[45]  To the contrary, the Board’s holding in Alstate was an accurate application of the requirements set forth in Meyers II for finding a single employee’s conduct concerted under the Act.  

In Alstate, the Board adopted the judge’s finding that a skycap at JFK International Airport who made an offhand complaint about a past client in the presence of his coworkers was not acting concertedly and was lawfully fired.  There, a skycap was working with three coworkers when his supervisor told him that a customer airline requested skycap assistance with an incoming soccer team’s equipment.  The skycap told the supervisor, “We did a similar job a year prior and we didn't receive a tip for it.”  When the team’s equipment arrived and managers sought the skycaps’ assistance, the skycaps walked away.  The General Counsel alleged that the skycap’s single comment was concerted and that, therefore, his subsequent discharge was unlawful.  The Board disagreed, finding that under the Meyers cases—as well as any reasonable interpretation of concerted activity—merely complaining to a supervisor in the presence of coworkers was not sufficient to establish that the complaint was made with the intention of initiating group action.^[46]  Moreover, the direct evidence reinforced that the skycap had no mind toward concerted action: he testified that his statement was “just a comment” and was not aimed at changing the Respondent’s policies or practices.^[47]  The Alstate Board correctly adopted the judge’s finding that the skycap’s remark was neither concerted nor undertaken for the purpose of mutual aid or protection and dismissed the complaint.^[48] It also reversed WorldMark and “reaffirm[ed] the standards articulated in Meyers I and II, under which individual griping does not qualify as concerted activity solely because it is carried out in the presence of other employees and a supervisor and includes the use of the first-person plural.”^[49]

(c) To the extent my colleagues are suggesting that the activity in WorldMark constitutes concerted activity, that view cannot be reconciled with the requirements set forth in the Meyers

Once again, in support of their position that the conduct at issue in WorldMark was concerted, my colleagues assert that “[t]he WorldMark decision merely reflected the Board’s longstanding recognition that a complaint made in front of a group of coworkers is a relevant consideration that, in combination with other relevant facts, may support an inference that an employee is seeking to induce group action.”  Because I have already set forth what the actual “longstanding recognition” of the Board is in inferring that an employee is seeking to induce group action, I hardly need point out that my colleagues’ representation of Board precedent is not quite accurate.  Indeed, an examination of the conduct at issue in WorldMark, reveals that the conduct fails to satisfy either of the Meyers II requirements, nor does it contain “other relevant facts” that would suggest that group action was involved in, or sought to initiate, the conduct.  Accordingly, to the extent that my colleagues are asserting that the activity at issue in WorldMark can be held out as an example of concerted activity, their decision cannot be reconciled with the Meyers cases.

In WorldMark, an employee just back from vacation had heard a rumor that the employer was planning to change its dress code.  While on the sales floor, in the presence of two other employees, a manager approached the employee and “mentioned two new company policies . . . including that sales representatives had to tuck in their shirts.”  The employee indicated that he had heard a rumor and, apparently still doubting the veracity of the manager, asked whether the change in policy was true.  When the manager confirmed the policy, the employee inquired whether it was a company-wide policy or “is it just us.”  Again, seeming to question whether the policy actually existed, the employee inquired why the new policy had not been posted as a memo because “any time they have changes, we always see a memo.”  At that point, an employee who had overheard the conversation between the employee and the manager chimed in, expressing his disagreement with the new dress code policy.^[50][51] 

On the record facts, the judge determined that, before the second employee decided to voice his opinion, the single employee had not engaged in concerted activity.  The judge found that “there exists no evidence that [the employee] sought any form of group action in support of his individual protest” and dismissed the complaint.³³ 

Assuming for the sake of argument that the questions from the single employee to the manager constituted a “complaint” about the new policy—and I am doubtful that they did—the conduct does not meet either of the requirements set forth in Meyers II. There is no evidence that the employee had been aware of, let alone part of, any group action with regard to the rumored rule change leading to a truly group complaint.  Nor is there evidence that he asked the manager those questions with the intent of initiating group action. 

Nevertheless, the Board in WorldMark concluded that the “surrounding circumstances” supported a finding of concerted activity, and my colleagues endorse that decision today.  In support of that position, my colleagues state that WorldMark based its finding of concerted activity on the following facts:

(1)  the employee took the first opportunity to question the newly announced dress code change;^[52] (2) the dress code affected him and his coworkers as a group; (3) the employee presented his objection in group terms, using “we,” (4) the employee knew from past experience that his coworkers preferred to wear their shirts untucked, and thus the employee would reasonably expect this issue to be a matter of concern to his coworkers; and (5) in fact, a coworker did join his protest.

My colleagues contend that these facts, plus the fact that the single employee’s statements were made on the sales floor with two employees nearby, support a finding that the employee acted with the intent of initiating group action.  I don’t see it.  To begin, although the employee may have been aware that his coworkers preferred to wear their shirts untucked, and therefore might have speculated that the policy change would be a “matter of concern” to his coworker, that merely shows that the employee assumed that the subject of his statements was a matter of “mutual aid and protection.”  There is no question, however, that Meyers II does not find that individual employees raising complaints for “mutual aid and protection,” in the absence of group action, constitutes concerted activity.  Rather, it requires an intention to initiate group action.  These facts do not touch on that matter.

As noted above, the Board in Whittaker found that the employee’s use of “us” and “we” was a contributing factor in finding an intent to initiate group action based on the context in which those pronouns were used.  Specifically, the Board found that the employee’s use of those terms was “[o]bviously addressed to everyone assembled to discuss the [proposed change in terms and conditions of employment], including his fellow employees.”  Id. at 934 (emphasis added).  No such analysis applies to the statements made by the employees’ comments in WorldMark or Alstate, where the comments were solely directed to the other person involved in the conversation – a manager.  In that context, and absent any other facts suggesting that the employee was directing his statements to fellow employees, the use of “us” or “we” supports a finding of protected, rather than concerted, activity. 

My colleagues suggest as a result of the fifth fact—that the employee’s activity did result in group action—that the Board should infer that the employee acted with the intent to initiate that action.  However, that is not the test under Meyers II.  Meyers II requires that the General Counsel establish, by the totality of the circumstances, that the statements were made with the intent of initiating group action.  Absent the group meeting context, the mere fact that an employee who was not part of the conversation happened to chime in after the fact does not transform, post hoc, the employee’s motivation for making the statements in the first place.

Finally, my colleagues, in light of the fact that the cases upon which they rely are readily distinguishable, assert that the caselaw supports their position because “the Board [has] never held that asserting an objection during a formal meeting was either necessary or sufficient.”^[53]  This assertion, however, completely misses the point.  The only question to be answered is whether the conduct at issue in WorldMark and Alstate satisfies one of the two requirements set forth in Meyers.  As described thoroughly above, none of the facts upon which the Board in WorldMark relied actually supports finding an inference that group action was the goal of the employee’s actions.  It could well be that my colleagues believe that the requirements set forth in the Meyers cases create an “unduly restrictive test” for finding concerted activity.  But that is the current law, and my colleagues’ view that concerted activity exists where the General Counsel has not established, based on the totality of the circumstances, that a single employee brought a “truly group complaint” to the attention of management or acted with the specific intention of initiating group action cannot be reconciled with that law.  

Conclusion

As I stated at the beginning of my comments, the analysis set forth by my colleagues pertaining to whether a discussion in front of, but not involving, other employees satisfies the requirements of Meyers II, above, plays no role in deciding this case.  Nevertheless, for the reasons set forth above, the dicta contained in their decision cannot be reconciled with the Meyers cases.  The Act requires that, to be covered by the statute, employee actions be both protected and concerted. Accordingly, the Meyers cases, mindful of the Act’s clear direction, define the limited circumstances in which a single employee, acting alone, will be considered to be acting in a concerted manner with other employees, focusing on the requirement that “concerted” involve some form of “group action.”  My colleagues today attempt to stretch the meaning of “group action” beyond all recognition, asserting that a single employee can, in effect, act on his own so long as other employees are present and certain other circumstances— which do not, in fact, support a finding of concerted activity—are present.  The fact that an employee is raising an issue concerning a group concern goes to whether the conduct is protected, not whether it was undertaken in connection with group action.  None of the facts relied upon by my colleagues are comparable to the facts that have, in the past, led the Board to infer the required “group action” that is the foundation of concerted activity.  Nor have they cited any facts, not present in earlier cases, that would support a finding that the employee’s activity was concerted.  Accordingly, to the extent that my colleagues take the position that concerted activity can be established by protected activity taken without the requisite intent toward group action, their view is contrary to the requirements of both the Act as well as the Meyers cases. 

   Dated, Washington, D.C.  August 25, 2023

______________________________________

         Marvin E. Kaplan,                          Member

[1] Meyers Industries, 268 NLRB 493 (1984) (Meyers I), remanded sub nom. Prill v. NLRB, 755 F.2d 941 (D.C. Cir. 1985), cert. denied 474 U.S. 948 (1985); Meyers Industries, 281 NLRB 882 (1986) (Meyers II), affd. sub nom. Prill v. NLRB, 835 F.2d 1481 (D.C. Cir. 1987), cert. denied 487 U.S. 1205 (1988).

[2] Under the Respondent’s disciplinary procedures, front-line supervisors are to document policy violations on an “Employee Warning Report” signed by the issuing supervisor and the employee and placed in the employee’s file.

[3] At the hearing, Vincer was not asked about his comments at the March 16 meeting, and he did not address the meeting in his testimony.  However, Trenary and Boustead both confirmed that, at the March 16 meeting, Vincer challenged the Respondent’s decision to remain open for business.  Thus, Boustead confirmed that his past recollection, as accurately recorded in his Board affidavit, was that Vincer “was upset” at the meeting, he asked “why we were still working when the employer was not an essential business," and he stated that “he didn’t think we had the proper precautions in place for the pandemic.”  Trenary testified that Vincer said, “we shouldn't be working.”

[4] In so finding, the judge relied on the testimony of employee James Boustead, whom the judge called “the most credible witness in this case,”

[5] Boustead testified that, at Vincer’s suggestion, he expressed his concerns to both Trenary and Zeliesko, and they stated that the Respondent was “an essential business because of the food and water purification products that we . . . manufacture” and assured him that they would follow proper procedures.  Although Zeliesko denied that Boustead approached him with any COVID-related concerns, Trenary confirmed that Boustead approached him and raised concerns about COVID and “his personal health issues” but testified that the conversation took place on March 16, after the all-hands meeting.

[6] NLRB 1083 (1980), enfd. 662 F.2d 889 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982).

[7] The Respondent also argues that Vincer’s conduct was not for mutual aid or protection, that the General Counsel failed to establish animus under Wright Line, and that the Respondent met its Wright Line rebuttal burden.  For the reasons stated by the judge, we reject these arguments.

[8] Then-Member McFerran dissented, finding that Alstate Maintenance’s narrow definition of concerted activity is unwarranted, at odds with precedent, and inconsistent with the policies of the Act.  Id., slip op. at 12–15.  We find the dissent persuasive, and our analysis below echoes many of its points.

[9] Similar to the Alstate Maintenance majority’s mischaracterization of WorldMark, our colleague mischaracterizes our decision here as “center[ed] on a false premise” that the Board has consistently found activity concerted when, in front of their coworkers, single employees protest

[10] Nor has the Board found that only communications among coworkers that are “prior [to] or contemporaneous” with such meetings bear on the question of concert.  Indeed, the Board, with court approval, has found the contrary.  See, e.g., Hugh H. Wilson Corp., 171 NLRB 1040, 1046–1048 & fn. 11 (1968) (finding that employees who griped when informed separately about employer’s withholding contributions to the profit sharing plan, asked questions during a subsequent meeting

[11] Our colleague contends that there is “no language whatsoever that indicates that an employee who ‘appears to’ engage in the express requirements for establishing concerted activity satisfies the test in Meyers II.” But as the passage quoted above makes clear, Meyers II endorses the view that this may satisfy the test for concerted activity. And, indeed, the Board has held that “[u]nder Section 7, both the concertedness element and the ‘mutual aid and protection’ element are analyzed under an objective standard.” Fresh & Easy Neighborhood Market, Inc., 361 NLRB 151, 153 (2014) (making clear that “[a]n employee’s subjective motive for taking action is not relevant to whether that action was concerted”). 

[12] Our colleague asserts that “the language of Meyers II establishes that the concerted nature of activity is to be judged at the time the action took place.” (Our colleague’s emphasis.)  He does not, however, point to any such language.  Indeed, the Board in Meyers II recognized that “the actions of the individual employee engaged in concerted activity might be remote in time and place from group action.”  281 NLRB at 885.

[13] Contrary to our colleague’s assertion, our position does not mean that concertedness “depend[s] upon others’ reactions” (his emphasis) to an employee’s conduct.  Of course, intent to induce group action can be inferred regardless of whether anyone else takes up the concern raised

[14] See, e.g., Fresh & Easy, 361 NLRB at 154 (no requirement that solicited coworkers actually join the protest in order to prove an intent to induce group action); Whittaker Corp., 289 NLRB at 933–934 (rejecting requirement that the “object of inducing group action [be] express” and finding concerted an employee’s “statement at the meeting implicitly elicited support from his fellow employees against the announced change”).

[15] Although the Alstate Maintenance majority insisted that the five factors are not exhaustive, it also expressly declined to hold “that all of these factors must be present” (367 NLRB No. 68, slip op. at 7 fn. 45, emphasis in original), thus implying that at least one factor must be present and that situations not encompassed by these factors will not support an inference of concerted action.

[16] Certainly, the fact that an employee raised a protest at an official meeting might strengthen the inference of intent to induce group action, but it is not and has never been a requirement.  See MCPc, supra, 813 F.3d at 484 (endorsing Board’s concerted activity finding in cases of “lone employee who complains to management in a less organized group context and who, in so doing, successfully attracts the impromptu support of at least one fellow employee”); Kiewit Power Constructors Co. v. NLRB, 652 F.3d 22, 24–26 (D.C. Cir. 2011) (finding protected concerted activity where employees objected to a new break policy in front of other employees while on the job); Colders Furniture, 292 NLRB 941 (1989), enfd. sub nom. NLRB v. Henry Colder Co., 907 F.2d 765 (7th Cir. 1990) (spontaneous lunchroom discussion among employees led to employee’s impromptu visit to manager’s office to make concerted complaint); Salisbury Hotel, 283 NLRB 685, 686, 694 (1987) (complaints exchanged among employees themselves were concerted where they led to group protest to management).

[17] See NLRB v. Talsol Group, 155 F.3d 785, 791, 797 (6th Cir. 1998) (employee’s questions of management concerning details of safety policy found to be concerted inducement of group action).

[18] Indeed, this is precisely what occurred in Alstate Maintenance, when one employee’s impromptu complaint to management in front of his coworkers about an arriving customer’s ungenerous tipping practices was followed by the coworkers collectively walking away when the customer appeared and asked for assistance.  In our view, the “object of initiating” and “relation to group action” could not be clearer.  Meyers II, 281 NLRB at 887.

[19] Moreover, even under Alstate Maintenance, we would find no merit in the Respondent’s argument that the majority’s decision in that case precludes a finding of concerted activity.  There is evidence of “prior or contemporaneous discussion of the concern between or among members of the workforce.” 367 NLRB No. 68, slip op. at 3.  In the days leading up to the March 16 all-hands meeting, the emerging COVID pandemic was a frequent topic of conversation among employees.  During this time, Vincer had daily conversations about the virus with employee Boustead, communicated to several employees his belief that the Respondent was not an essential business and should close, and suggested to Boustead that someone should contact the authorities and tell them that the Respondent was still open.  These facts show that Vincer “was

[20] I acknowledge and apply Paragon Systems, Inc., 371 NLRB No. 104 (2022), as Board precedent regarding modifications to the Board’s electronic notice-posting requirements, although I expressed disagreement there with the Board’s approach and would have adhered to the position the Board adopted in Danbury Ambulance, 369 NLRB No. 68 (2020).

Further, I would require the Respondent to compensate Ronald Vincer for other pecuniary harms only insofar as the losses were directly caused by the unlawful action, or indirectly caused by the unlawful action where the causal link between the loss and the unfair labor practice is sufficiently clear, consistent with my partial dissent in Thryv, Inc., 372 NLRB No. 22 (2022).

[21] Meyers Industries, 268 NLRB 493 (1984) (Meyers I), remanded sub nom. Prill v. NLRB, 755 F.2d 941 (D.C. Cir. 1985), cert. denied 474 U.S.

[22] NLRB No. 68 (2019). 

[23] To be clear, contrary to my colleagues’ representation, I do not disagree with their “decision to overrule Alstate Maintenance,” insofar as that suggests that I believe that they have overruled that case.  They have not.  

[24] My colleagues appear to be taking the position that merely citing a case as relevant precedent in a party’s brief or a judge’s decision is sufficient to put the issue of whether that case should be overturned before the Board, regardless of whether the outcome of the case turned on that precedent.  I disagree. 

[25] In urging the overruling of Alstate in her Brief in Support of Cross Exceptions, the General Counsel also did not refer to the facts of the instant case or suggest that overruling Alstate was in any way relevant to determining whether Vincer’s activity was concerted.

[26]  I further note that my colleagues’ decision to address an issue not necessary to deciding this case does not merely implicate the legal principle of obiter dicta; such decisions have real-world consequences.  First, drafting decisions that are nothing more than dicta requires an expenditure of Board resources for no real purpose other than providing Board

[27]  268 NLRB at 497.

[28] F.2d at 685 (emphasis added).

[29] Id.

[30] Alstate, 367 NLRB No. 68, slip op. at 6 (quoting Meyers II, 281 NLRB at 887). 

[31] Id. (quoting Meyers II, 281 NLRB at 886).  

[32] Furthermore, if the Alstate Board’s “interpretation” of the express language set forth in the Meyers cases and Mushroom Transportation were so incorrect, one would expect that my colleagues would be able to cite numerous cases that issued during the nearly six decades between the seminal cases and Alstate where the result would be reversed under Alstate.  To the contrary, the only such case my colleagues can point to is WorldMark by Wyndham, which proffered an unprecedented interpretation contrary to the language set forth in the Meyers cases. 

[33] In my view “derived from,” the phrase highlighted by my colleagues, means the same thing as “arises from” or “is related to” group action that precedes the alleged concerted activity. 

[34] With the possible exception of WorldMark by Wyndham, which was wrongly decided.  It’s not clear to me how conduct could be “related to” group action without in some way arising from that action.

[35] I note that, in referring to the walkout in Alstate as evidence of concertedness, my colleagues also misrepresent the holding in that case.  “[T]he General Counsel’s theory of the case was strictly limited to the

[36] Not only would consideration of subsequent actions to determine whether an activity was concerted in the first place be inconsistent with both Meyers II and common sense, it would be unworkable.  What if a single employee raised a concern about personally wanting to work more overtime, but then three months later his coworkers decided that they wanted the employer to provide more overtime and took collective action.  Would that render the initial activity concerted?  What if the collective action took place one week later? 

[37] My colleagues disagree with this conclusion, asserting that I do not “point to any such language.”  To the contrary, I point to the language set forth in Meyers II itself.  Although my colleagues are correct that the phrase “at the time” is not expressly set forth in the Meyers II test, I do not believe that there is any other reasonable interpretation of the express language set forth by the Board in that case.

[38] Thereby satisfying the “intent” prong of Meyers II:  that the individual engaged in the conduct had the “object of initiating or inducing or preparing for group action.”  281 NLRB at 887.  Again, the specific situation of speaking in a group meeting in those circumstances has been found sufficient to establish an intent on the part of the speaker to initiate group action. 

[39] Worldmark by Wyndham, 356 NLRB 765 (2011).

[40] Contrary to my colleagues’ suggestion, I am not stating that this specific scenario is the only possible scenario in which the Board could find, based on the totality of the circumstances, that activity by a single employee was taken with the intention of initiating group action, although I lack the imagination to conjure a hypothetical scenario where that would be the case.  Rather, I am simply disagreeing with my colleagues' position that cases presenting completely different facts, where the analysis of concertedness turns on those specific facts, support the position they are taking today in dicta.  That is simply not the case. 

[41] NLRB 946 (1982).

[42] NLRB 858, 863 (2000), enfd. 262 F.3d 184 (2d Cir. 2001).

[43] Id. at 863 (emphasis added) (quoting Whittaker).

[44] Although my colleagues cite this case as affirmation that their view that “a lack of prior planning does not foreclose a finding of concerted activity,” that is hardly a controversial view.  As detailed above, the Board has consistently found that when an employer calls a group meeting with employees and announces new terms and conditions of employment, the first employee to voice a complaint related to the terms and conditions announced at the meeting will have engaged in concerted activity, even though they did not have the opportunity to engage in prior planning.

[45] My colleagues repeatedly contend that, despite the fact that Alstate never indicated that “one factor must be present” to find activity to be concerted, language contained in fn. 45 of the decision can only be interpreted as making that requirement.  This interpretation, however, only considers the first sentence in the footnote.  The second sentence in the

[46] Alstate Maintenance, 367 NLRB No. 68, slip op. at 4.

[47] Id.

[48] My colleagues, in contending that his comment should have been found concerted, must supply the requisite intent on his behalf.

[49] Id., slip op. at 7. 

[50] Agreeing with the judge’s dismissal of the complaint, Member Hayes aptly noted in his dissent that the coworker’s expression of personal frustration “did not transform” the charging party’s questioning into group action.  Id. at 768 (Member Hayes, dissenting). 

[51] NLRB at 779. 

[52] My colleagues appear to find that the WorldMark decision erred in relying on this fact, insofar as they suggest that if the employee had the opportunity to raise the issue before, but declined to do so, that would impose an “artificial limit” on employees’ ability to engage in concerted activity.  Accordingly, I will not address this fact here.

[53] My colleagues appear to suggest that various inapposite cases, whether involving groups of employees protesting together, or a complaint arising as a direct result of group action, or a coworker directly soliciting others to join their protest, support their view that the conduct at issue in WorldMark and Alstate constituted concerted activity.  In each