NLRB Makes It Significantly Harder for Employers to Issue Discipline for Workplace Outbursts

After the National Labor Relations Board's recent decision in Lion Elastomers LLC II, employers must now carefully navigate two "fundamentally different" classes of employee misconduct: 1) "misconduct during ordinary work," and 2) misconduct committed during activities related to their hours, wages, and working conditions. Employers may discipline employees for profane attacks and threats, posting social media attacks, shouting racist epithets at other employees, or carrying signs sexually harassing a particular employee when committed in the ordinary course of work. However, employers may not discipline employees for the same misconduct if the misconduct is linked to efforts to improve their terms and conditions of employment.

The decision overrules the Board's previous decision in General Motors LLC, decided only three years ago. The Board in General Motors expressly rejected the "setting-specific" tests that created the two-tiered approach the Board announced in Lion Elastomers on the grounds that it too often, in the words of the dissenting Board member, brought about "seemingly arbitrary and, at times, unreasonable results."

The "Setting-Specific" Standards

Under Lion Elastomers, employers must consider various factors before issuing discipline. For example, if an employee's outburst is directed at management, the Board will look to 1) the place of the discussion; 2) the subject matter of the discussion; 3) the nature of the employee's outburst; and 4) whether the outburst was, in any way, provoked by an employer's unfair labor practice (known as the "Atlantic Steel test" for the underlying case). In cases involving employees' misuse of social media and most cases involving conversations among employees in the workplace, the Board will look at the "totality-of-the-circumstances" regarding the posts or conversations. And when the misconduct takes place on a picket line, the Board will consider whether "the misconduct [was] such that, under the circumstances existing, it may reasonably tend to coerce or intimidate employees in the exercise of rights protected under the Act" (known as the "Clear Pine Mouldings" standard).

As these different, setting-specific standards demonstrate, how and why an employer responds to employee misconduct could mean the difference between lawfully maintaining workplace civility and violating the National Labor Relations Act. Board Chairman Lauren McFerran justified the two-tiered approach to addressing serious misconduct and the "setting specific" analysis this way: "To fully protect employee rights, conduct during protected concerted activity must be evaluated in the context of that important activity—not as if it occurred in the ordinary workplace context." That rationale, however, ignores important considerations regarding equal treatment – and equal protection – in the workplace. Going forward, employers will be subject to different rules as to whether and how they can issue responsive discipline, and determining which standard applies will depend on whether the employee was breaking workplace rules while exercising their rights under the Act or simply breaking the rules.

The Board Only Recently Repudiated the "Setting-Specific" Standards

Section 7 of the National Labor Relations Act gives employees the right to engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection." The Board has long recognized that labor disputes often inflame passions and get heated. As such, employees are, in the Board's view, entitled to some measure of latitude. But the Board likewise recognizes that there are still times when employees' misconduct is so egregious that it loses the protections of the Act.

Decades ago the Board adopted the same setting-specific standards outlined in Lion Elastomers to determine whether employee misconduct crossed the line. But those standards presumed that employers disciplined employees because of their protected activity rather than the underlying misconduct. And they all but precluded employers' arguments that they would have imposed discipline for the misconduct regardless of whether the employee engaged in protected concerted activity. Applying the setting-specific standards thus led to inconsistent, arbitrary, and often contradictory results.

To address these problems, the Board in General Motors replaced the traditional, context specific tests with a single, more balanced approach, known as the Wright Line test. Under Wright Line (which sets out the typical standard used in mixed-motive cases), the General Counsel must establish a causal link between the discipline imposed and protected concerted activity. Employers may then rebut the General Counsel's arguments by demonstrating that they would have handled the matter the same as they would absent any protected concerted activities. Replacing the site-specific tests with the Wright Line standard thus simplified the analysis and promoted more predictable, equitable, and consistent results.

What Does It Mean to Return to the Pre-General Motors Era?

As dissenting Board member, Marvin Kaplan, noted, the Board's decision effectively brushes aside the General Motors Board's necessary acknowledgment that times have changed and employers are much less tolerant of aggression, racism, sexism, and threatening behavior in the workplace. Indeed, employers are obligated to swiftly address discrimination and harassment when it occurs or they face significant penalties for failing to do so.

The Board's decision in Lion Elastomers thus invites conflicts with other federal and state agencies charged with enforcing anti-discrimination and harassment laws and with guidance from the Equal Employment Opportunity Commission, state human rights commissions, and related agencies. Employers now risk incurring unfair labor practice charges for swiftly addressing – as they should – workers' use of overtly racists slurs in the workplace or displays of highly offensive and sexually charged content about their supervisors. How the Board will address these competing concerns in future cases remains to be seen, leaving employers with little clear guidance for now on how to best balance their various obligations under different federal and state laws.

How Should Employers Proceed Under Lion Elastomers?

The Board's decision in Lion Elastomers has reintroduced uncertainty and ambiguity into the disciplinary process. While there is much still to be sorted out, employers should:

• Carefully consider the context and circumstances surrounding profane speech or conduct during union activity or workplace activism prior to issuing corrective action, including:
• Review whether corrective action is aimed at addressing the nature of the complaint or subject matter or the conduct.
• Consider where the conduct occurred, the severity of the language used, and the conduct displayed, as well as the audience to which the conduct was directed.
• Ensure policies and practices align with the restored standards set forth in the Lion Elastomers ruling, which may include updating policies related to social media use, workplace discussions, and picket-line conduct.
• Provide relevant management training. Front-line supervisors charged with ensuring safe, secure, and civil workplaces will require extra support and education on how to navigate the Board's two-tier approach.

This continues to be an evolving area of law. DWT will continue to monitor these and other labor law developments. Please reach out to the authors if you have questions about how the Board's decision might impact your organization.