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| 3 minutes read

NLRB Revives 'Biggest Idiot' Standard, & Your Handbooks Are Toast (Again)

Section 7 of the National Labor Relations Act (NLRA) grants employees the right to unionize, engage in activities to advance their common interests, and abstain from these activities. From time to time, employers establish work rules that prohibit or appear to prohibit or discourage these activities. When this occurs, the National Labor Relations Board (NLRB or Board) can strike down the work rule under Section 7. How the NLRB determines whether a work rule violates the NLRA ebbs and flows with each administration. But yesterday the NLRB placed otherwise innocuous handbook provisions squarely in its sights. And killed them. 

In its voluminous and stilted Stericycle decision, the Board revived and embellished on the standard it will apply when reviewing handbook provisions and other work rules under Section 7 of the NLRA. Without diving too deep into the weeds, the Board will revert to a previously overruled standard that asks whether a reasonable employee could (not would) interpret a policy in a manner that would chill their exercise of Section 7 rights. That would be sort of okay if the Board means "reasonable" when it says "reasonable," but it clearly doesn't. 

Instead, the Board has revived what I have previously described as the "Biggest Idiot" standard. Here's how that standard works: Take any policy in your handbook, visualize the biggest idiot on the planet, and then ask yourself if it is even remotely possible that this idiot could somehow misread the policy in a manner that would deter this idiot from engaging in their Section 7 rights under the NLRA. If the answer is yes, game over--your work rule violates the NLRA.  Ask yourself how your work rules stand up to this inquiry. Not good.

To get to this result, the Board overruled two decisions from the previous administration that created a more balanced, more realistic test. Throwing rationality to the wind, the Board now holds that a work rule is presumptively unlawful if a reasonable employee could interpret it to restrict or prohibit Section 7 activity. When magically interpreting what a reasonable person might think, the Board will now take into account the person's supposed economic dependence on the employer, as though economic dependence somehow justifies irrational thinking. Worse still, the Board will completely and utterly ignore the provable, legitimate business reasons or business necessity for the work rule in question before finding the work rule presumptively invalid. Only then may an employer offer evidence that the work rule legitimately advances the employer's business interests, and the employer must then prove that a more narrowly tailored rule would not advance the employer's business interests.

The Board formulated this test through a game of "could-a, would-a, should-a." Under the previous Board standard, the Board would ask whether a work rule would cause a reasonable employee to interpret it to restrict Section 7 rights. This largely placed the burden on the Board to demonstrate a Section 7 violation. Under the new standard, the Board will ask whether a worker could misinterpret the rule to prohibit or chill Section 7 rights. Enter the Biggest Idiot theory. The Board is far, far more likely to find a Section 7 violation when one considers the endless bases on which an employee might misinterpret a work rule. This is particularly true in light of the Board's newly-minted "economic dependence" inquiry because, let's face it, any employee (reasonable or idiotic) who depends on their employer for their financial survival will likely conclude that a policy violates their Section 7 rights, even if completely cynical and even if only after the fact. The Board will now rationalize its "invalidate now, force the employer to explain the impossible later" rule pretty much across the board thanks to its new presumption of invalidity. 

In the NLRB world, presumptions are already extremely difficult to overcome for an employer. Add to the new presumption the employer's burden to prove that a narrower rule would not properly protect its business interests and employers can now expect many otherwise innocuous work rules to be struck down. The Board will flyspeck employer policies into the ground and no amount of prescience and draftsmanship will protect employers and their work rules from this presumption or the unlikely rebuttal showing the Board imposes.  

You may ask why I haven't discussed the work rules actually at issue here? Good question. That's because the Board hardly makes mention of the work rules at issue in this case and punts the application of its new standard back to the administrative law judge. The Board simply used this case to create out of whole cloth a new standard untethered to the actual dispute before it. Seeing a sliver of an opening to revive the Biggest Idiot standard, the Board leapt, and your handbooks are far the worse for it.    

Indeed, the standard my colleagues have adopted directly conflicts with longstanding Board precedent. Under their standard, a [work rule] 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). Member Kaplan's dissent