Some Work Rules Still Don't Fly Under the NLRB's New Boeing Standard

By Geoffrey M. Gilbert, Jr. - McMahon Berger, PC.

June 7, 2018

Does your Company have a work rule that limits an employee’s ability to secure a second job?  If so, maintaining such a rule may violate the National Labor Relations Act (“Act”).

In Nicholson Terminal & Dock Company, the Company’s Personnel Handbook contained a rule prohibiting moonlighting.  More specifically the rule stated, in relevant part, that employees could not work a second job that: (1) was inconsistent with the Company’s interests; or (2) could have a detrimental impact on the Company’s image with customers or the public.  The rule also required employees to get the approval of the Company’s Treasurer before accepting other employment.  The National Labor Relations Board (“NLRB”) alleged that this rule as well as several others were “facially unlawful” under The Boeing Company, 365 NLRB No. 154 (2017), because they were overly broad and would tend to chill employees in the exercise of their Section 7 rights.

On May 16, 2018, Administrative Law Judge Elizabeth Taft (the “Judge”), determined that, among other things, the Company’s rule prohibiting moonlighting was unlawful.  In reaching her decision, the Judge applied the balancing test recently established by the NLRB in Boeing to determine whether the potential impact on employees’ rights under the Act was outweighed by the Company’s legitimate justification for the rule (See McMahon Berger Blog dated Dec. 27, 2017).  In this respect, the Judge first determined that the prohibition against moonlighting affected and interfered with the employees’ non-work time in that it could restrict an employee’s right to engage in organizing efforts, including salting, as well as an employee’s right to affiliate with other employees/unions.  The Judge also determined that by requiring employees to get permission to work a second job the rule would chill an employee’s right to engage in protected conduct.

Next, the Judge examined the Company’s justifications for the rule.  Specifically, the Company asserted the rule was necessary because: (1) the work performed by employees was dangerous and working a second job could cause fatigue; and (2) the Company did not want its employees working for a competitor. Ultimately the Judge found that the Company’s “prohibitions and restrictions on moonlighting are unlawful because the proffered justifications for the rule do not outweigh the potential impact of the rule on substantial, core Section 7 rights.”

At the time the decision in Boeing was issued, employers hoped that the new standard for evaluating work rules would make it more difficult to establish that a work rule violates the Act – and for the most part it has.  This decision by the Judge, although not binding, serves as a reminder to employers that the new Boeing standard does not guarantee a finding that all work rules are lawful as well as a reminder to review existing rules/policies.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years, and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.