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NLRB Tightens Standard For Employee Discipline Related To Concerted Activity

In a ruling earlier this month, the National Labor Relations Board (the “Board” or “NLRB”) reversed a Trump-era NLRB ruling that had given employers substantially more leeway to discipline employees for abusive, harassing, or discriminatory comments or actions that occur in the context of concerted activity otherwise protected under Section 7 of the National Labor Relations Act (the “NLRA”).

In this new ruling, Lion Elastomers, 372 NLRB No. 83 (2023), the NLRB revived its previous multi-factor test for assessing the lawfulness of discipline imposed on an employee who engages in such conduct while participating in Section 7 activity.

Background: Atlantic Steel

Under Section 7 of the NLRA, employees – whether unionized or non-unionized – have a right to engage in concerted (i.e., joint) activity aimed at bettering the terms and conditions of their employment. In some instances, however, an employee’s behavior in the course of concerted activity – for instance, abusive language directed toward a supervisor during a meeting – may be deemed so extreme or outrageous as to forfeit the protections of the NLRA and render the employee liable to discipline.

Prior to 2020, such scenarios were governed by the Board’s decision in Atlantic Steel, 245 NLRB 814 (1979). Under Atlantic Steel, the NLRB applied “setting-specific standards” based on the premise that otherwise questionable employee conduct – such as heated words toward a supervisor – often cannot be separated from the protected activity during which it takes place.

In determining whether abusive conduct is inseparable from the concerted activity, and thus protected under Section 7, the Board examined the following four factors: (1) the location where the discussion or conduct occurred; (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 unfair labor practice on the employer’s part. Under this test, the Board deemed an employer’s motive and good faith in issuing discipline as “immaterial.” (The NLRB applied variants of the Atlantic Steel standard to employee misconduct occurring on a picket line or through social media posts.)

One frequently-voiced criticism of Atlantic Steel is that it creates potential difficulties for employers in seeking to comply both with the NLRA and with Title VII and similar anti-discrimination statutes. For instance, if an employer is compelled to tolerate sexually harassing remarks made by an employee in the course of Section 7 activity, the employer could potentially open itself up to Title VII liability to another employee who is the victim of the harassing comments.

NLRB’s General Motors Detour

In General Motors LLC, 369 NLRB No. 127 (2020), the NLRB abandoned the Atlantic Steel standard. Instead, the Board announced that it would apply the so-called Wright Line test to determine whether an employer had lawfully disciplined an employee for abusive conduct occurring in the course of Section 7 activity.

Under this new standard, the NLRB focused on the employer’s motive for imposing disciplinary action. Specifically, so long as the employer could demonstrate that it would have taken the same disciplinary action if the conduct had occurred outside of any Section 7 protected activity, the employer’s action would be deemed lawful under the NLRA.

Lion Elastomers: Return To Atlantic Steel

In Lion Elastomers, the NLRB overruled General Motors and reverted back to the Atlantic Steel test. The Board majority opined that this restored legal standard “ensures that adequate weight is given to the rights guaranteed to employees by Section 7 of the [A]ct, by ensuring that those rights can be exercised by employees robustly without fear of punishment for the heated or exuberant expression and advocacy that often accompanies labor disputes.”

While the Board majority conceded that employers have a legitimate interest in “maintaining order and respect in the workplace,” it went on to state that the NLRA “imposes no obligation on employees to be ‘civil’ in exercising their statutory rights.”

On the subject of employers’ concerns about the seemingly competing demands of the NLRA and Title VII, the Lion Elastomers decision essentially dodges the issue, asserting that responsibility for reconciling such conflicting statutory mandates rests upon the courts, and not upon agencies such as the NLRB.

Implications For Employers

By reinstating the Atlantic Steel standard, the Lion Elastomers decision makes it more difficult for employers to discipline employees for abusive comments or actions that occur in the context of concerted activity. An employer can no longer avoid liability by showing that it would have disciplined the employee for the behavior irrespective of its connection to Section 7 activity. Instead, the Board will again apply the multi-factor Atlantic Steel analysis, with uncertain results, at best, for employers.

In light of this development, employers should act cautiously, and consult labor counsel, before terminating or otherwise disciplining employees for misconduct occurring in the course of Section 7 protected activity.

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If you have questions about the Lion Elastomers decision or any other NLRA issue, please feel free to contact one of our experienced labor attorneys.