May 3, 2023Client Alert

The NLRB Overturns General Motors

On May 1, 2023, the National Labor Relations Board in Lion Elastomers LLC II, 372 NLRB No. 83 (2023) overturned General Motors LLC, 369 NLRB No. 127 (2020), reinstating the employee-friendly setting-specific standards to determine whether an employee’s outburst is protected by Section 7 of the National Labor Relations Act. The setting-specific standards reinstated by the Lion Elastomers II decision recognize that there is a “fundamental difference” between employee misconduct that constitutes protected Section 7 activity and misconduct committed in an ordinary workplace setting, making it harder for employers to discipline and ultimately terminate employees for outbursts that violate employer code of conduct and similar policies.

Prior Wright Line Standard

In 2020, the Board in General Motors concluded that the setting-specific standards historically used in employee misconduct cases often resulted in unwarranted protection of employees engaged in deeply offensive conduct and that these outcomes were difficult to reconcile with antidiscrimination laws.  In General Motors, the Board held that irrespective of the setting involved, the fundamental issue in cases of alleged “abusive conduct” by an employee was the employer’s motive in taking adverse action against the employee. Therefore, the Wright Line burden shifting test, rather than the setting-specific standards, was the appropriate standard for all cases involving such conduct.

Under the Wright Line test, the General Counsel had to prove that the employee’s protected activity was a motivating factor in the discipline. If that burden was met, the employer then had to prove it would have taken the same action even in the absence of the protected activity.

The Reinstated Setting-Specific Standards

Prior to July 2020, the Board applied three different setting-specific standards to determine whether employers had unlawfully disciplined or discharged employees for misconduct committed in the course of Section 7 activity.  The Atlantic Steel standard governed encounters with management in the workplace, the totality-of-the-circumstances test governed social media posts and exchanges between employees, and the Clear Pine Mouldings standard governed offensive conduct and statements at the picket-line. The Lion Elastomers LLC II decision reinstated all three of these standards.

Under the Atlantic Steel standard, the Board considers four factors to determine whether an employee’s misconduct during protected activity loses protection of the Act: (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 provoked by the employer’s unfair labor practice.

In cases dealing with social media posts and exchanges between employees, the Board considers the totality of the circumstances to determine whether an employee loses protection of the Act. Finally, under the Clear Pine Mouldings standard, an employee’s misconduct at the picket-line only loses protection of the Act if under the given circumstances, the misconduct was such that it would have reasonably coerced or intimidated non-strikers in the exercise of rights protected under the Act.

Overturning General Motors

In overturning General Motors and reinstating these three standards, the Board emphasized Section 7 activity may warrant protection even if the employer acted against the employee in a good faith response to misconduct. As such, the Board concluded that the employer’s good faith is immaterial. Rather, the focus is on how the exercise of Section 7 rights would be affected if the employer were permitted to discipline or discharge the employee for misconduct.

The board further emphasized that employees should be able to exercise Section 7 rights without fear of punishment for the heated expression that often occurs in labor disputes.

This decision reflects one of the areas of emphasis in the General Counsel’s stated agenda of reform to Board law. Unions and plaintiff’s counsel will likely be keenly aware of this shift in Board law. Employers faced with inappropriate and offensive conduct by its employees should be mindful of these “return to familiar” standards and seek counsel prior to issuing disciplinary action, especially if considering suspension or termination.

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