Employers should be paying close attention to the NLRB – Employer Handbook

You (and anyone else who has attended a wedding or bar mitzvah since 1978) knows that “it’s fun to stay at the Y-M-C-A.”

Young reader, there’s another “place you can go” that is also known by a catchy four-letter acronym and seems to be on constant repeat for employers. Everyone sing along: “It’s unpredictable and confusing to stay at the N-L-R-B.” Unfortunately, here, they do not let you “do whatever you feel.”

That’s right, the NLRB – or National Labor Relations Board, as us squares call it – has been making headlines, most recently with a well-publicized decision banning certain non-disparagement and confidentiality provisions from separation agreements.  And just like the Village People weren’t one hit wonders (you remember “In the Navy” and Macho Man,” right?), expect the hits to keep coming from the NLRB. If employers aren’t listing to what the NLRB is putting out yet, now’s the time to tune it.

Let’s start with a little background. When most think of the NLRB (if they think of it at all), they think of the NLRB’s role in conducting workplace elections for union representation. However, the NLRB does much more than this.

Under Section 7 of the National Labor Relations Act (the 1935 law that established the NLRB), most private sector non-supervisory employees are given the right to “engage in concerted activities for the purpose of collective bargaining or other mutual aid and protection.” On its website, the NLRB describes its role in protecting this “concerted activity” right as follows: “The NLRB is…vested with the power to safeguard employees’ rights to…engage with one another to seek better working conditions… to prevent and remedy unfair labor practices committed by private sector employers.”

What does this right to engage in “concerted activities” or to “engage with one another to seek better working conditions” actually mean? At the most basic level, it means that employees can talk and work together to try to change their terms and conditions of employment. However, at the risk of sounding glib, it really means whatever the NLRB decides it means at any given time, and unfortunately for employers and employees alike, the NLRB changes its mind regularly.

The reason for this regular flip-flopping is because the NLRB’s main leadership, both its five-member Board and its General Counsel, is made up of political appointees. This generally means that when a Democratic President is in office, the NLRB tends to take a more “pro-labor” approach along with a more expansive view of what constitutes “protected concerted activity.” When a Republican President is in office, you tend to get the opposite.

Let me give you an example. During the Obama Administration, the NLRB issued a memorandum about how employer policies and work rules can violate Section 7 of the Act if they could be read in a way that might have a “chilling effect” on concerted activity. Seemingly reasonable rules, like “be respectful to the company, other employees, customers, partners and competitors,” were deemed unlawful because someone might possibly understand it to prohibit any protesting or criticism of their supervisors.

Unsurprisingly, during the Trump Administration, the NLRB’s Board issued a decision rejecting the memorandum’s conclusions and issued a more fact-specific test in which “employer’s interest” was also considered when reviewing a policy or rule. Of course, when the Biden Administration took office, one of the new General Counsel’s first acts was to issue a new memorandum questioning the Trump Board’s revised test, and it is widely expected that the Board will soon issue a decision following suit.

Now that we’ve covered the history, let’s talk about what’s happening now. In late-February, the Board held that it is unlawful for an employer to offer severance agreements that contain overbroad confidentiality and non-disparagement provisions. In the decision, which explicitly overturned two prior Board decisions from 2020 (which, in turn, had overturned even earlier decisions), the Board reasoned such provisions, if drafted broadly, could prohibit an individual from discussing employment-related concerns with other employees, a union, or even the NLRB itself.

This decision has caused much anxiety among executives and HR professionals. However, to be completely honest, there are likely some easy options to address this issue like simply deleting any potentially offending confidentiality or non-disparagement provisions or adding language to make clear that the provisions do not impact an individual’s rights under Section 7 of the Act. Of course, the best decision for a particular employer will depend on its unique circumstances, so contact legal counsel before making any edits to your forms. Also remember that because most executives, supervisors and managers aren’t covered by the Act, you can still likely use your old forms for them.

However, the real question is what will the NLRB do next? As mentioned above, a decision invalidating many seemingly reasonable employee handbook policies and work rules is likely to arrive soon. The NLRB also recently issued a notice that it intends to revise its definition of “joint employment” and rescind a rule that made it easier for employees to decertify a union. The General Counsel has also made clear that she is pushing the NLRB to end “captive audience” meetings during union elections and to provide the right for non-union employees to always bring a witness to an investigatory interview that could lead to discipline (a right that union employees already have). Going forward, it is imperative that all private employers keep a close eye on the NLRB and be prepared to pivot quickly.

As much as many employers may want to ignore the NLRB, it really is just like the “YMCA” at a middle school dance. It’s going to be heard from eventually, and it’s going to make employers throw their hands in the air (albeit for much different reasons).

Ben Mudrick is a partner in the Labor & Employment practice at Harter Secrest & Emery LLP.  He can be reached at [email protected]