Executive Summary: In a 20-page memorandum dated June 6, 2018, National Labor Relations Board (NLRB) General Counsel Peter Robb issued guidance to the Regions on handbook rules in light of the Board’s decision in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017).
As discussed in our December 19, 2017 Alert, in Boeing, the Board re-evaluated the standard concerning when maintaining a work rule violates Section 8(a)(1) of the National Labor Relations Act (NLRA). A new standard that focuses on the negative impact on the employees’ ability to exercise their Section 7 rights and the rule’s connection to the employers’ right to maintain discipline and productivity in their workplace was born. Boeing not only added the balancing test, it significantly altered the Board’s jurisprudence on the reasonable interpretation of handbook rules. Following Boeing, the Board will no longer interpret ambiguities in rules against the drafter, nor will it interpret generalized handbook rules as banning all activity that could conceivably be included in the rule.
Three categories of rules were established in Boeing: Category 1 rules are generally lawful to maintain; Category 2 rules warrant individualized scrutiny; and Category 3 rules are unlawful to maintain.
Category 1: The rules in this category are generally lawful because the rule does not prohibit or interfere with the exercise of an employee’s Section 7 rights or because the potential adverse impact on those rights is outweighed by a business justification. According to the General Counsel’s guidance, Regions should DISMISS any unfair labor practice charges alleging that the rules in this category are facially unlawful. These rules include but may not be limited to:
- Civility Rules – The majority of conduct covered by these rules, including name-calling, gossip and rudeness, do not implicate Section 7 rights. Examples of these rules include, “Behavior that is rude, condescending or otherwise socially unacceptable,” “Employees may not make negative or disparaging comments about their colleagues,” “Rude, discourteous or non-businesslike behavior is forbidden,” “Employees may not post any statements, photographs, video or audio that could be reasonably viewed as disparaging to other employees... .”
- No-Photography and No-Recording Rules – The Board in Boeing determined that no-photography rules have little, if any, impact on Section 7 rights. Employers have legitimate interests in limiting recording and photography on their property. These interests may be related to security, protection of proprietary information or customer information. Employers will now be allowed to maintain these rules. Employers must keep in mind that a blanket prohibition on the possession of cell phones at work may still be unlawful.
- Rules Against Insubordination, Non-Cooperation or On-The-Job Conduct that Adversely Affects the Employers’ Operations – Most employer handbooks include a rule forbidding insubordination, improper conduct, refusal to comply with orders or perform work. Employers have legitimate reasons for desiring to prevent insubordination at work. As long as the rules do not indicate that Section 7 activity is prohibited, the rule should now be lawful.
- Disruptive Behavior Rules – Like rules against insubordination, disruptive behavior rules are prevalent in handbooks. The conduct covered by these rules is generally dangerous conduct, roughhousing or just general bad behavior. These rules are generally in place to maintain a safe work environment, prevent workplace violence, fighting and harassment, and to maintain workplace productivity. As long as an employer does not apply these rules to discipline employees for strikes or walk-outs, enforcement of such rules should not be considered an unfair labor practice.
- Rules Protecting Confidential, Proprietary, and Customer Information or Documents – Most employers have a need to protect proprietary information and, therefore, most companies have rules prohibiting disclosure of this information. As long as rules protecting confidential information do not prevent employees from discussing their wages or salary with their colleagues, these rules will generally be upheld. Rules such as prohibitions on disclosing confidential financial data about a company, confidential information about the business, its customers or vendors, and divulging private information to others will now be considered lawful.
- Rules Against Defamation or Misrepresentation – It is crucial that companies protect their reputations and those of their employees from defamation or slander since they survive on the good-will of their name and their products or services. Therefore, going forward, rules such as “misrepresenting the company’s products, services or its employees is prohibited” will be allowed. Robb reasoned that the vast majority of conduct that these rules prevent is not protected by the NLRA, and even concerted activity can be unprotected if the defamation is intentional.
- Rules against Using Employer Logos or Intellectual Property – Employees cannot use an employer’s intellectual property for personal gain or to infer that their actions or statements are condoned by the employer. As such, companies may continue to promulgate and maintain rules prohibiting employees from using company logos, trademarks, etc. without prior written approval of the company. Of course, using a company logo on a picket sign or handbill when engaging in concerted protected activity is still lawful.
- Rules Requiring Authorization to Speak for the Company – If the rule only regulates who can speak on behalf of the company and does not chill an employee’s Section 7 rights, then employers can maintain rules that require authorization to make statements to the public on behalf of the company. Employers can also maintain rules that identify specific people as those who are authorized to speak on the company’s behalf.
- Rules Banning Disloyalty, Nepotism, or Self-Enrichment – Often referred to as conflict of interest rules, these types of rules are generally lawful. These rules generally have no impact on Section 7 rights, and employers have a legitimate business interest in making sure their employees are not engaged in self-dealing or working for companies in direct competition with them.
Category 2: This category includes rules that require individualized analysis as they are not blatantly unlawful or lawful. The analysis must include a determination as to whether the rule would prohibit or interfere with NLRA rights and, if so, whether the adverse impact on NLRA protected conduct is outweighed by legitimate business justifications. In this category the Board may draw distinctions between industries, and parties may be given an opportunity to introduce evidence regarding a particular rule’s impact on protected rights or the work-related justification for the rule. Regions must submit all Category 2 rules to Advice if any question as to the validity of such a rule arises. The submission must include the rule at issue, related rules, evidence of actually chilling an employee’s Section 7 rights and the employer’s justification for the rule. Additionally, the submission should include the Region’s proposed balancing of all factors and recommended conclusion.
Examples of these rules include rules regulating the use of a company name as opposed to the use of a company logo or trademark; a general ban on speaking to the media as opposed to a ban on speaking to the media on behalf of the company; and rules against making false statements against colleagues as opposed to a rule defaming colleagues.
Category 3: These are rules that will always be unlawful because they prohibit or even limit NLRA protected conduct, and the adverse impact on the rights of employees is not outweighed by the justifications associated with the rule. Such rules include those prohibiting employees from discussing wages or benefits with one another or rules that prohibit the discussion of working conditions with anyone outside the company.
Effect on Employers
Employers can take back some control of the work environment and institute common-sense rules that protect their good-will and the workplace in general. Additionally, unfair labor practice charges based on discipline or a termination are less likely to morph into handbook complaints than in the past several years.
If you have any questions regarding the General Counsel’s guidance or other labor or employment related issues, please feel free to contact the author of this Alert, Michelle Harkavy, a partner in our New York City office, at mharkavy@fordharrison.com. You may also contact the FordHarrison attorney with whom you usually work.