What The NLRB Thinks About Your Employee Handbook

What The NLRB Thinks About Your Employee Handbook

As organized labor unions continue to decline, we continue to see the National Labor Relations Board (“NLRB”) expand into new areas not generally associated with organized labor.  While, the NLRB has enforcement powers and the ability to bring charges against most privatesector employers, historically the NLRB has not exercised their powers outside of the organized labor context.

[Note: Excluded from coverage under the Act are public-sector employees, agricultural and domestic workers, independent contractors, workers employed by a parent or spouse, employees of air and rail carriers covered by the Railway Labor Act and supervisors (although supervisors that have been discriminated against for refusing to violate the Act may be covered).]

Within the last few years, however, the NLRB has been very active in investigating private-sector companies’ employee handbooks for provisions that the NLRB believes may violate the National Labor Relations Act (“the Act”).  It would appear that, as organized labor continues to decrease, the NLRB will continue to expand its enforcement of the Act into areas not traditionally associated with NLRB enforcement.  As a result, all employers who have implemented an employee handbook need be aware of the recent guidance issued by the NLRB’s General Counsel.  This memorandum will briefly highlight some of the various aspects of the guidance that employers should be aware of.  

Below are three handbook provisions that the guidance highlighted as objectionable:

“Be respectful to the company, other employees, customers, partners and competitors.”

“Do not make insulting, embarrassing, hurtful or abusive comments about other company employees online and avoid the use of offensive, derogatory or prejudicial comments.”

“Do not send unwanted, offensive or inappropriate e-mails.”

If you did not find anything objectionable about these provisions then you are certainly not alone.  However, Richard F. Griffin, Jr., General Counsel of the National Labor Relations Board, disagrees.  

According to a recently released memo from Mr. Griffin, all three of the above provisions are unlawful rules which an employee could “reasonably construe” to prohibit protected Section 7 activity under the “Act”. (However, employees have a Section 7 right to discuss wages, hours and other terms and conditions of employment with fellow employees, as well as nonemployees.) This memo is important because the Office of the General Counsel investigates unfair labor practice charges and the NLRB’s Regional Directors receive their marching orders from the General Counsel when they are investigating whether a charge has merit.  Thus, the memo offers important guidance as to what language and policies will be viewed suspiciously and are likely to be found to interfere with employees’ rights under the Act. While much of the report and this article discuss handbooks, unlawful provisions can arise in any policy, rule, contract or agreement that the employer enforces or might enforce.

In particular, the memo addresses handbook provisions on the following topics, which Mr. Griffin notes “are frequently at issue”:

• Confidentiality
• Employee Conduct Toward the Company and Supervisors
• Employee Conduct Towards Fellow Employees
• Employee Interaction with Third Parties
• Rules Restricting Use of Company Logos, Copyrights and Trademarks
• Rules Restricting Photography and Recording
• Restrictions on Employees Leaving Work 
• Employer Conflict of Interest Rules

The problem with the General Counsel’s position regarding these topics is that, while Mr. Griffin recognizes in his memo that “most employers do not draft their employee handbooks with the object of prohibiting or restricting [protected conduct],” the NLRB’s actions do not reflect this commonsense approach.  Rather, the NLRB and General Counsel have taken an expansive view as to what an employee “would reasonably construe” as violating their Section 7 rights.  

As an example, the NLRB has taken the position that the first provision above is “unlawfully overbroad” because employees “would reasonably construe” it to ban protected criticism or protests regarding their supervisors, management or the employer in general.  According to the NLRB, “a rule that prohibits employees from engaging in disrespectful, negative, inappropriate or rude conduct towards the employer or management, absent sufficient clarification or context, will usually be found unlawful.” 

So what about the second provision above?  On its face, this provision only applies to “other company employees” and not supervisors, managers or the employer in general; so how is it unlawful?  According to the NLRB, “employees also have a right under the Act to argue and debate with each other” and the employees’ speech will not lose its Section 7 protection “even if it includes intemperate, abusive and inaccurate statements.”  Thus, the NLRB struck down this provision as unlawful because “debate about unionization and other protected activity is often contentious and controversial” and, as a result, employees would “reasonably read a rule that bans offensive, derogatory, insulting or embarrassing comments as limiting their ability to honestly discuss such subjects.”  The NLRB’s rationale for the two provisions above is concerning primarily because it will have a direct impact on how broadly employers draft anti-harassment/employee conduct provisions in the future. 

Additional highlights (or lowlights depending on your point of view) that should be noted include:

• Rules Regarding Confidentiality: The memo recognizes that employers have a substantial and legitimate interest in maintaining the privacy of certain business information. However, “broad prohibitions on disclosing confidential information are lawful” only as long as “they do not reference information regarding employees or anything that would reasonably be considered a term or condition of employment.”  As an example, a rule prohibiting employees from discussing their compensation would likely be found unlawful.
• Rules Regarding Employee Conduct toward the Company/Supervisors:  While the memo places special emphasis on rules which were illegal due to the fact that they prohibit employees “from engaging in disrespectful, negative, inappropriate or rude conduct towards the employer or management,” the memo further notes that an employee’s criticism of the employer does not lose the protection of the Act because the criticism is false or defamatory.  Thus, according to the General Counsel, a rule is unlawful unless it specifies that only maliciously false statements are prohibited.
• Rules Regarding Employee Interaction with Third Parties:  Mr. Griffin makes clear that employees have a right under the Act to communicate with news media, government agencies and other third parties about the terms and conditions of employment and rules “that reasonably would be read to restrict such communications are unlawful.”  
• Rules Restricting Use of Company Logos, Trademarks and Copyrights: The NLRB’s position is that an “employer’s proprietary interests are not implicated by employees’ non-commercial use of a name, logo or other trademark to identify the employer in the course of Section 7 activity.”  Thus, a broad ban on employee use of company logos, trademarks and copyrights will generally be found overbroad.
• Also insightful, the memo offers examples of lawful rules and provisions as well as a comprehensive discussion of certain handbook provisions which were drafted pursuant to an informal, bilateral NLRB settlement agreement with Wendy’s International LLC.

In sum, it is worth reviewing the memo (GC 15-04) and reviewing your handbook to make sure you do not have any provisions similar to the unlawful ones in the memo.  You may wish to rework potentially problematic provisions with the “model language” of the lawful provisions in the memo. One particular takeaway from the memo should be to pay attention to overly broad provisions.  Any provision that is drafted broadly could be construed as applying to Section 7 activities.

Also important are the matters not discussed in the memo.  Reading between the lines, it appears that the General Counsel does not take issue with workplace rules regarding unlawful acts, rules prohibiting knowingly false statements, rules prohibiting disclosures of trade secrets and rules requiring employees to work during working time.

[Note: Do not confuse working time with “on-duty time,” “company time” or “time on the clock.” Working time is the time an employee is engaged (or should be engaged) in performing their work tasks for their employer.]

Also absent from the memo is any clarification or guidance on what position the General Counsel will take regarding “savings language” in employee handbooks.  Whether a statement in a handbook that no rules are meant or intended to violate an employees’ rights under the Act will protect an employer is an issue that has yet to be determined by the NLRB.

Finally, all employers are now on notice that the NLRB is actively looking at and investigating workplace rules and employee handbooks that may have a chilling effect on an employee’s exercise of rights protected under the Act.  Any rule-based discipline, including termination, of an employee based on a company handbook needs to be scrutinized in the context of whether the rule or provision could be construed as unlawfully broad.  Employers found to be in violation can be ordered to strike any unlawful rules and to reverse any disciplinary action based upon the offending rule.

[Note: For those employers dealing with actual union activity, an unlawful rule could also be grounds for the NLRB to invalidate an election and order a re-run election giving the union another chance to unionize the workforce.]

If you have questions about your handbook or for more information on Employment Law, please call at (865)-546-7311