Court Opinion

ID: 4667860
Source: CourtListenerOpinion
Date Created: 2021-03-16 00:00:30.503165+00
Date Added: 2024-06-11T08:02:59.629391
License: Public Domain

Case: 20-60472     Document: 00515780512         Page: 1     Date Filed: 03/15/2021

              United States Court of Appeals
                   for the Fifth Circuit                             United States Court of Appeals
                                                                              Fifth Circuit

                                                                            FILED
                                                                      March 15, 2021
                                  No. 20-60472
                                                                       Lyle W. Cayce
                                                                            Clerk
   Lowes Home Centers, L.L.C.,

                                                    Petitioner Cross-Respondent,

                                       versus

   National Labor Relations Board,

                                                    Respondent Cross-Petitioner.

                     Appeal from a Petition for Review of the
                        National Labor Relations Board

   Before Davis, Stewart, and Dennis, Circuit Judges.
   Per Curiam:*
          Lowe’s Home Centers, L.L.C. (“Lowe’s”) challenges the denial of
   its Petition for Review of an Order of the National Labor Relations Board.
   Lowe’s workplace policy prohibits disclosure of confidential information,
   and an employee challenged the policy under Section 8(a)(1) of the National

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
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                                    No. 20-60472

   Labor Relations Act, which prevents employers from limiting employees’
   discussions of their wages. The administrative law judge (“ALJ”) concluded
   that Lowe’s policy violated the Act. Lowe’s appealed to the National Labor
   Relations Board, and the Board affirmed. We AFFIRM.
                    I. FACTUAL AND PROCEDURAL HISTORY
          Employee Amber Frare filed an unfair labor practice claim against
   Lowe’s. She alleged that a section of Lowe’s employee code violated 29
   U.S.C. § 1581(a)(1) by interfering with employees’ right to discuss wages.
   The relevant part of the Lowe’s policy reads as follows:
          Employees must maintain the confidentiality of information entrusted
          to them by Lowe’s, its suppliers, its customers, or its competitors,
          except when disclosure is authorized by the Chief Compliance Officer
          or required by law. Employees must consult with the Chief
          Compliance Officer before disclosing any information that could be
          considered confidential.
          Confidential information includes, but is not limited to:
                 · material non-public information; and
                 · proprietary information relating to Lowe’s business such as
                 customer, budget, financial, credit, marketing, pricing, supply
                 cost, personnel, medical records or salary information, and
                 future plans and strategy.
          The parties presented their arguments to an ALJ, and the only issue
   presented was whether this portion of Lowe’s policy violated 29 U.S.C. §
   1581(a)(1).
          The ALJ determined that Lowe’s code provision was “per se
   unlawful” under The Boeing Co., 365 NLRB No. 154, 2017 WL 6403495 (Dec.
   14, 2017). The ALJ did not consider the legitimate justifications for the policy
   and construed any ambiguities against Lowe’s as the policy drafter.

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          Lowe’s filed exceptions. The Board adopted the decision of the ALJ
   with minor changes. Lowe’s now appeals.
                            II. STANDARD OF REVIEW
          We review the Board’s legal conclusions de novo. T-Mobile USA, Inc.
   v. NLRB, 865 F.3d 265, 271 (5th Cir. 2017). The Board’s factual findings are
   entitled to deference so long as they are “supported by substantial evidence
   on the record considered as a whole.” Strand Theatre of Shreveport Corp. v.
   NLRB, 493 F.3d 515, 518 (5th Cir. 2007) (quoting J. Vallery Elec., Inc. v.
   NLRB, 337 F.3d 446, 450 (5th Cir.2003)).
                                 III. DISCUSSION
          Lowe’s appeals the Board’s decision, arguing that the Board erred by
   using the “reasonably construe” standard from Lutheran Heritage and by
   failing to consider legitimate justifications for Lowe’s policy. We disagree.
                         1. “Reasonably construe” standard
          Lowe’s argues that the Board erred by analyzing Lowe’s policy under
   Lutheran Heritage’s overruled “reasonably construe” test. We disagree.
          In Boeing, the Board overruled much of Lutheran Heritage, 343 NLRB
   646 (2004), including its “reasonably construe” standard for assessing the
   lawfulness of facially neutral employment rules. 2017 WL 6403495 at *8.
          “Under Lutheran Heritage, even when an employer's facially neutral
          employment policies, work rules and handbook provisions do not
          expressly restrict Section 7 activity, were not adopted in response to
          NLRA-protected activity, and have not been applied to restrict
          NLRA-protected activity, the Board will still determine that the
          maintenance of these requirements violates Section 8(a)(1) if
          employees “would reasonably construe the language to prohibit
          Section 7 activity.”

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          Id. In Boeing, the Board overruled the “reasonably construe” standard
   for several reasons including its conflict with Supreme Court and NLRB
   precedent, both of which permit businesses to offer legitimate justifications
   for their facially neutral employment policies. Id. at *8−*13.
          After overruling Lutheran Heritage’s strict “reasonably construe”
   test, the Board adopted a more flexible standard.
          “[W]hen a facially neutral rule, reasonably interpreted, would not
          prohibit or interfere with the exercise of NLRA rights, maintenance
          of the rule is lawful without any need to evaluate or balance business
          justifications, and the Board’s inquiry into maintenance of the rule
          comes to an end. Even under Lutheran Heritage--in which legality
          turned solely on a rule’s potential impact on protected rights--a rule
          could lawfully be maintained whenever it would not ‘reasonably’ be
          construed to prohibit NLRA-protected activity, even though it ‘could
          conceivably be read to cover Section 7 activity.’ Conversely, when a
          rule, reasonably interpreted, would prohibit or interfere with the
          exercise of NLRA rights, the mere existence of some plausible
          business justification will not automatically render the rule lawful.
          Again, the Board must carefully evaluate the nature and extent of a
          rule’s adverse impact on NLRA rights, in addition to potential
          justifications, and the rule’s maintenance will violate Section 8(a)(1)
          if the Board determines that the justifications are outweighed by the
          adverse impact on rights protected by Section 7.”
   Id. at *17 (quoting Lutheran Heritage, 343 NLRB at 647).
          In other words, when a facially neutral rule cannot reasonably be
   interpreted to violate the NLRA, the rule is lawful. There is no need to
   examine the employer’s justifications for the rule. Id. When a facially neutral
   rule is reasonably interpreted to violate the NLRA, the rule’s lawfulness is
   uncertain, and further analysis is required. See id. at *4. (“Under the standard

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   we adopt today, when evaluating a facially neutral policy, rule or handbook
   provision that, when reasonably interpreted, would potentially interfere with
   the exercise of NLRA rights, the Board will evaluate two things: (i) the nature
   and extent of the potential impact on NLRA rights, and (ii) legitimate
   justifications associated with the rule.”).
          Here, the Board concluded that Lowe’s policy was facially neutral and
   could be reasonably construed to restrict employees’ wage discussions. The
   policy prohibits employees from discussing confidential information which
   explicitly includes “salary information.” We thus agree with the Board’s
   conclusion that the policy can be reasonably construed to limit employees’
   rights under the NLRA. We now turn to Lowe’s legitimate justifications for
   the policy.
                         2. Lowe’s Legitimate Justifications
          Lowe’s argues that the Board erred by failing to consider its legitimate
   justifications for the policy. We disagree.
          Under Boeing, the Board created three categories of rules. Category 1
   rules are per se lawful, either because they cannot be reasonably interpreted
   to interfere with employees’ rights or because the adverse impacts on rights
   is outweighed by justifications for the rule. Id. at *4. Category 2 rules warrant
   individualized scrutiny in each case, and the Board must weigh the adverse
   impacts on NLRA rights with employer’s legitimate justifications. Id.
          Category 3 rules are generally unlawful because they “would prohibit
   or limit NLRA-protected conduct, and the adverse impact on NLRA rights
   is not outweighed by justifications associated with the rule. An example of a
   Category 3 rule would be a rule that prohibits employees from discussing
   wages or benefits with one another.” Id. at *4.

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          The Board reasonably construed Lowe’s policy as limiting the
   exercise of NLRA rights and looked to Lowe’s justifications. Lowe’s argues
   that its policy was justified by its need to prevent employees from
   disseminating its confidential information. The Board recognized that
   employers have legitimate interests in maintaining confidential records but
   concluded that those “circumstances [were] not present in this case”
   because Lowe’s policy was overly broad. The policy was not tailored to
   address only those employees with special access to confidential information.
   See, e.g., Asheville School, Inc., 347 NLRB 877, 877 fn. 2 (2006) (finding lawful
   discharge of employee who disclosed wage and salary information contained
   in confidential records within her special custody).
          We find no error in the Board’s analysis. Lowe’s policy falls within the
   Category 3 rules contemplated by Boeing because the policy can be reasonably
   construed to limit employees’ wages and because Lowe’s justification does
   not save the policy. The policy is too broad to be justified by Lowe’s interest
   in preventing employees from sharing confidential information.
          Lastly, Lowe’s argues that the ALJ and the Board erred by construing
   the policy’s ambiguities against it. While the ALJ may have relied on that
   principle from Lutheran Heritage, the Board did not.
                                 IV. CONCLUSION
          For the aforementioned reasons, we affirm the Board’s decision.

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