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Are employer codes of conduct meaningless in today’s NLRB climate?

by Michael J. Westcott

Based on the National Labor Relations Board’s (NLRB) recent attack on employer codes of conduct, employers need to rethink their approach to communicating to employees the kinds of conduct that are prohibited and expected in the workplace. 

Weapon of choice: NLRA Section 7
Many “old school” employers provide employees with work rules and specific examples of conduct or behavior that is unacceptable in the workplace. However, it’s impossible to contemplate every form of inappropriate or wrongful conduct that could ever occur at work. People who have real-world experience in HR know that you just can’t make this stuff up, and the type of behavior that some employees will engage in is mind-boggling. As a result, many employers, particularly in a nonunion setting, rely on codes of conduct or rules of business etiquette to guide their employees in determining the type of behavior that is and isn’t acceptable in the workplace.

Rather than having a written work rule that specifies, for example, that employees can be disciplined or terminated for stealing or insubordination, many employers prefer to speak in terms of their expectation that employees be honest or respectful of management. Unfortunately, that approach to governing workplace conduct is under attack and losing ground every day. The weapon of choice being used against employers is the National Labor Relations Act (NLRA)—specifically, Section 7.

Section 7 of the NLRA provides that “employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a)(3).”

Employers with unionized workforces are more familiar than nonunionized employers with the NLRA and its often counterintuitive provisions and interpretations. There are still many nonunionized employers that believe the NLRA doesn’t apply to them because their workers aren’t represented by a union. Those employers face a rude awakening when they receive their first contact from the NLRB in the form of an unfair labor practice (ULP) charge challenging the lawfulness of their code of conduct or other workplace policies and procedures.

Historical background
In fairness to the NLRB, for many years the Board has taken the position that certain rules of conduct can violate the NLRA if they infringe on employees’ Section 7 rights. The classic example is a no-solicitation rule, which generally prohibits employees from soliciting other employees in the workplace. Since 1945, the NLRB has scrutinized no- solicitation rules to make sure their breadth doesn’t interfere with Section 7 rights.

With certain exceptions, the Board’s scrutiny of such rules in regard to Section 7 rights has been somewhat limited. In recent years, however, the NLRB has been handling a deluge of ULP charges involving allegations that various work rules maintained by employers violate the NLRA. These charges have been fueled by the Board’s determinations that the charges are meritorious.

Some employer rules violate the NLRA because they expressly restrict Section 7 rights. Other rules have been enforced by employers against employees on a disparate basis, which is also a violation of Section 7. Those are the easy cases. The difficult cases occur when the NLRB looks at a rule to determine if employees “could reasonably construe” the language as prohibiting Section 7 activity. Even in the absence of any enforcement, the rule’s mere promulgation and maintenance violates the NLRA because it may chill, or dissuade, employees from exercising Section 7 rights.

Recent criticism by the NLRB
Many codes of conduct or company values statements are written in a broad or ambiguous fashion, which invites criticism from the NLRB. The Board approaches such rules with the idea that any ambiguities will be resolved against the employer that wrote them as a restriction on Section 7 rights rather than against the employees who are required to obey them. Not surprisingly, for any given set of facts, you can usually find NLRB cases that go both ways on whether such rules are legal. Nevertheless, based on its most recent decisions, the NLRB is shooting down certain characterizations or statements so consistently that employers should avoid using them in their guidelines or rules for employee conduct.

For example, some employers prohibit employees from engaging in inappropriate behavior while they’re on company property. The laudable intent is that employees should already know what conduct should and shouldn’t occur in the workplace and shouldn’t have to have everything spelled out for them in terms of what constitutes inappropriate conduct. However, the NLRB has determined such language to be unlawful because the employer didn’t specify or suggest what would be considered “inappropriate” conduct. That’s particularly true if the employer offers no guidance through specific examples or limiting language that would exclude Section 7 activity.

The NLRB’s concern is that an employee could reasonably interpret an “inappropriate behavior” rule as prohibiting protected activities such as criticizing the employer’s labor policies, treatment of employees, or terms and conditions of employment. The NLRB also has concerns that an employer with such a rule has “inordinate subjective discretion” to impose discipline if it doesn’t like the underlying conduct.

Similarly, a requirement that employees be honest can also be problematic. There are numerous cases in which the NLRB has found that rules requiring honesty in the workplace are overly broad in violation of Section 7. Indeed, the Board has held that “within the area of concerted activities, false and inaccurate employee statements are protected so long as they are not malicious.” Accordingly, it has found that work rules prohibiting merely false statements can violate the NLRA.

Asking employees to maintain harmony in the workplace is also problematic. One of the recurring themes in the NLRB’s decisions seems to be that employees’ exercise of Section 7 rights may cause discord or disharmony in the workplace, and rules that could be reasonably construed as prohibiting such conduct are unlawful. For example, the Board has found rules prohibiting “discourteous or inappropriate attitude or behavior to passengers, other employees, or members of the public” and “disorderly conduct during working hours” to be overly broad. Similarly, a rule prohibiting the “inability or unwillingness to work harmoniously with other employees” has been determined to be insufficiently precise because it could encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7.

The NLRB apparently also has issues with conflict-of-interest policies. The Board’s concern in this regard is again the general assumption that such rules are unlawfully overly broad because they could be reasonably construed to prohibit protected criticism of an employer’s labor policies or treatment of employees. The NLRB also believes that broad and indistinct language in a conflict-of-interest policy could mean that discussions with other employees or a union would be considered unsatisfactory conduct, a conflict of interest, or conduct that may not be in the best interests of the employer.

General rules addressing confidential or proprietary information are also likely to be struck down by the NLRB. The Board has consistently rejected confidentiality policies with provisions that prohibit the discussion or release of information concerning employees; employee records or other personnel information; wages, salaries, or compensation; and other terms and conditions of employment.

Employers shouldn’t expect to be able to require their employees to be courteous and respectful or to refrain from using profanity, either. The NLRB has found such rules unlawful because employees would reasonably construe a broad prohibition against “disrespectful” conduct as encompassing Section 7 activity (e.g., protected statements to coworkers, supervisors, managers, or third parties criticizing employer policies or practices dealing with the terms and conditions of employment).

Because such language is categorized as ambiguous, the NLRB will construe it against the employer. How employers are expected to maintain a work environment in which employees feel comfortable and free from harassment when performing their work duties is becoming difficult, if not impossible, to answer.

Bottom line
Because of the current makeup of the NLRB, employers that prefer to take the more generalized approach to controlling conduct in the workplace have an uphill battle. Including examples of the particular type of conduct that is prohibited by the rule or guideline is recommended. Including frequent caveats or disclaimers to the effect that nothing in the rule is intended to interfere with employees’ Section 7 rights, while helpful, often won’t save a code of conduct or behavior guidelines from violating the NLRA. Nevertheless, it doesn’t hurt to use disclaimers.

In the end, we can only hope that as time goes by, this, too, will pass, and you will be able to govern the conduct that occurs in your workplace using codes of conduct or behavior guidelines and rules free from the NLRB’s scrutiny and attack under its restrictive interpretation of Section 7.

Mike Westcott is a partner with Axley Brynelson, LLP in the firm’s Madison, Wisconsin, office. He may be contacted at mwestcott@axley.com.