Employment Law Daily NLRB invalidates hospital code of conduct provisions over dissent’s call to abandon standard
Monday, April 18, 2016

NLRB invalidates hospital code of conduct provisions over dissent’s call to abandon standard

By Lisa Milam-Perez, J.D. Portions of a hospital’s “Code of Conduct for Surgical Services and Perianesthesia,” which prohibited employee conduct that is “inappropriate or detrimental to patient care,” was unlawful, a divided NLRB panel held, as employees would reasonably construe these prohibitions as barring protected Section 7 activity. But the real issue here was not the lawfulness of the specific policies in question; as the majority suggested, the practical impact of its order was “modest,” just a tweaking of a few handbook provisions, while the vast majority of the hospital’s handbook directives were either upheld or not at issue. Rather, the case was about the wisdom of the Board’s standard used to evaluate them (William Beaumont Hospital, April 13, 2016). This holding should be “a relatively unremarkable application of well-established law to uncontroverted fact,” the majority noted, but Member Miscimarra saw it differently, calling the case “a tragic example of the problems fostered by the Lutheran Heritage [Village] standard.” As he quipped, “Under Lutheran Heritage, reasonable work requirements have become like Lord Voldemort in Harry Potter: they are ever-present but must not be identified by name.” What transpired was a lengthy debate as to the merits of the long-used standard. Challenged provisions. The hospital’s policy ran afoul of the NLRA in its opening paragraph, according to the majority, with “imprecise” language prohibiting conduct that “impedes harmonious interactions and relationships.” The directive was unlawfully overbroad, as it could feasibly encompass any conflict among employees, including those related to disagreements and interactions that would be protected by Section 7. A few other provisions were struck down as well, including prohibitions on:
  • “behavior that is … counter to promoting teamwork”
  • “negative or disparaging comments about the ... professional capabilities of an employee or physician to employees, physicians, patients, or visitors.”
However, most of the code of conduct survived Board scrutiny, which the majority was careful to note as it took pains to minimize the significance of its holding in its scuffle with the dissent. The Board upheld prohibitions on:
  • “[w]illful and intentional threats, intimidation, harassment, humiliation, or coercion of employees, physicians, patients or visitors”
  • “[p]rofane and abusive language directed at employees, physicians, patients or visitors”
  • “[b]ehavior that is rude, condescending or otherwise socially unacceptable”
  • “[i]ntentional misrepresentation of information”
  • “behavior that is disruptive to a safe and healing environment.”
These holdings were “firmly grounded in the well-established principles that were articulated more than a decade ago in Lutheran Heritage Village,” the majority wrote, principles that appellate courts, in fact, have routinely endorsed. Dissent. Miscimarra accused the majority of disregarding the literally life-or-death issues that arise in the hospital setting in its rush to defend employees’ Section 7 rights. (In the underlying case, two labor and delivery nurses were discharged for “bullying” and “negative” conduct after a newborn infant died, in part because of poor communication among hospital employees. The Board upheld those firings. And the majority felt compelled to strike back at their colleague’s intimation that “that there is a link between Board doctrine and the death of a baby.”) Miscimarra would find the challenged conduct rules were well-supported by substantial justification, even under the Board’s current test. In his view, they had little chilling effect on the exercise of protected rights because employees would understand that they were simply intended to promote patient care, not to impinge on NLRA-protected activity. His main point, though, was that “the time has come for the Board to abandon Lutheran Heritage Village-Livonia” as the standard for evaluating the lawfulness of employer work rules under the Act. He outlined what he believes are “multiple defects” in the approach, particularly its “reasonably construes” prong: it’s premised on a “misguided belief” that employees would do better to have no handbook policies at all; it hamstrings the analysis, with little regard for different industries and work settings; and it has “defied all reasonable efforts to make it yield predictable results.” Worst of all, he suggested, is that the standard fails to take into account an employer’s “legitimate justifications” for a particular work rule. Lutheran Heritage “imposes a form of blindness on the Board,” he lamented, “requiring that we ignore every important consequence associated with our decisions in this area, and with employment policies, work rules and handbook provisions, except their potential impact on the NLRA.” This is not what the Act requires, and contrary to Supreme Court precedent, he urged. In its place, Miscimarra proposed a new standard—one that weighs the potential adverse impact of a given work rule on NLRA-protected activity against an employer’s legitimate justifications for maintaining the rule. And, under this balancing test, “a facially neutral rule should be declared unlawful only if the justifications are outweighed by the adverse impact on Section 7 activity.” Ain’t broke, don’t fix it. The majority countered that the dissent’s proposed test would undermine the statute’s “essential protections,” had a “weaker analytical foundation,” offered no greater clarity, and would be harder to apply. “Whatever the flaws in current law might be, the shortcomings in the dissent’s standard are glaringly apparent,” the majority wrote. “In this sometimes difficult area of labor law, the Board should not take a step backward.” The majority rejected the notion that the Supreme Court (specifically, in its Republic Aviation decision, which Miscimarra cited) mandated the balancing of an employer’s business justifications for a rule over its potential chilling effect on employee rights. All that matters is whether the rule would reasonably tend to chill employees in the exercise of protected rights. Both the First Circuit and the D.C. Circuit have afforded the Board deference on this approach, and the dissent’s insistence on imposing such a balancing test “reflects a fundamental misunderstanding of the Board’s task in evaluating rules that are alleged to be unlawfully overbroad.” As for the unpredictable results that the current standard ostensibly has yielded over the years, the fault lies not in Lutheran Heritage, the majority said, but in the ever-increasing “bureaucratization of work.” The perhaps inconsistent Board jurisprudence that has emerged is simply “inherent in the remarkable number, variety, and detail of employer work rules (and the larger documents in which they appear), drafted with differing degrees of skill and levels of legal sophistication.” This is what happens, too, when each challenged work rule is to be analyzed in context, not merely by reading a given phrase in isolation, the majority responded. “Nor has the Board’s jurisprudence, before or after Lutheran Heritage Village, had any apparent effect on the adoption and maintenance of employer rules as a general matter.” “As a practical matter, the only way that certainty, predictability and stability might result from such a complex exercise would be if adoption of the dissent’s test meant that facial challenges to employer rules would rarely succeed,” the majority concluded. “But to effectively limit the Act’s reach to the unlawful application of facially neutral rules would leave the potential chilling effect of such rules on protected, concerted activity unaddressed. That result is unacceptable if the Act is to be properly enforced.”

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