Imagine this: Your company has policies in your employee handbook determined to be unlawful by the NLRB. Then, you and the NLRB engage in a line-by-line revision of the policies to ensure compliance with Board law and thereafter you issue a new handbook, with policies approved by the Board, to your employees. Everything is ok, right? Wrong! This is exactly what occurred in Boch Imports, Inc. v. National Labor Relations Board. In affirming the NLRB, the First Circuit determined that the Employer failed to properly repudiate its prior, unlawful handbook policies even though it revised those policies in collaboration with the NLRB Regional Office.
In 2011, the Employer’s union workers challenged several portions of its 2010 employee handbook. Even though the NLRB Regional Office investigating the case engaged in a line-by-line review of the handbook with the Employer, and the revised handbook was issued to employees before the Administrative Law Judge hearing, the General Counsel still argued that the old policies, which were no longer in the handbook, constituted an unfair labor practice because the Employer did not properly “repudiate” them. The ALJ determined that the Employer did not properly repudiate the old rules or provide assurances to employees that it would not engage in the same violations in the future. A divided NLRB panel upheld the ALJ’s decision, finding that the Employer did not effectively repudiate in 2013 its prior unlawful handbook and unlawfully maintained several over-broad provisions from the 2010 handbook until it issued its new handbook in 2013. The Board even ordered Boch to issue a much more detailed notice to employees than had the ALJ.
The Employer petitioned for review with the First Circuit where it argued, among other things, that the handbook rules were effectively repudiated; specifically noting that it worked in tandem with the NLRB Regional office to ensure compliance with Board law. In affirming the Board’s findings, the Court of Appeals noted that an employer must repudiate an unlawful policy, even if the employer has since discontinued that policy or revised it to be compliant with Board law. According to the First Circuit, repudiation requires that the employer “signal unambiguously” to employees that it acknowledges its unlawful conduct, recognizes the Section 7 rights of employees, and pledges not to interfere with those rights in the future.
As the employer in this case found out, doing “nothing more in terms of notification than to provide copies of the handbook to employees” will not suffice. Rather, as outrageous as it sounds, employers defending unfair labor practices who revise their handbook in consultation with and the approval of the NLRB must affirmatively notify employees that certain handbook policies were found unlawful, and that such policies may impinge on their Section 7 rights. In fact, failing to do so may result in further litigation initiated by the NLRB. Although not addressed in the Boch case, one wonders what the NLRB would say about employers without pending NLRB ULP charges who revise their concededly unlawful handbooks to come into compliance with Board law. Must they, in addition to issuing their new handbook, affirmatively “repudiate” the unlawful portions of their prior handbook? It seems crazy to think so, but don’t assume this Labor Board wouldn’t take that position.