NLRB’s New Guidance Loosens Reigns on Handbooks

Earlier this year, we predicted that the National Labor Relations Board (NLRB) would be “loosening the reins on employer handbook rules.” We can finally tell you exactly how much the reins have been loosened because the NLRB’s General Counsel has outlined the standards the Board will follow when assessing employers’ personnel policies. Overall, you will have much greater leeway in drafting and enforcing workplace rules and, in particular, any rules related to civility, insubordination, disruptive behavior, photography/recordings in the workplace, confidential information, defamation, disloyalty, or media contact on behalf of the company.

Background

In its decision in The Boeing Company on December 14, 2017, the NLRB reassessed its standard for determining when a workplace policy or rule violates Section 7 of the National Labor Relations Act (NLRA). The NLRB established a new standard that focuses on the balance between (1) the policy’s negative impact on employees’ ability to exercise their Section 7 rights and (2) the policy’s connection to the employer’s right to maintain discipline and productivity in the workplace. The NLRB not only added a balancing test but also significantly altered its jurisprudence on the reasonable interpretation of handbook rules, severely criticizing the effects of the previous standard set forth in 2004 under Lutheran Heritage Village-Livonia.

Under the previous standard, almost any workplace policy could be interpreted as applicable to Section 7 activity. Under the new standard, ambiguities in workplace policies are no longer interpreted against the drafter of the policy, and generalized provisions will not be interpreted as banning all activity that could conceivably be included under the policy’s prohibitions.

On June 6, the NLRB’s General Counsel published a memorandum outlining general guidance and the standards the Board will follow when evaluating the lawfulness of employee handbook policies. The standards are organized in three categories:

1. Rules that are generally lawful to maintain;
2. Rules that demand individualized scrutiny; and
3. Rules that are unlawful.

(See GC 18-04, “Guidance on Handbook Rules Post-Boeing” (June 6, 2018), available at https://www.nlrb.gov/reports-guidance/general-counsel-memos.)

Category 1: Rules that Are Generally Lawful

Category 1 rules are presumed to be lawful because when they’re reasonably interpreted, they do not prohibit or interfere with employees’ exercise of any rights guaranteed by the NLRA or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the policy. Examples of policies or rules that are generally presumed to be lawful under the new balancing standard include rules that address:

• Civility, including policies and prohibitions related to inappropriate conduct; rude, condescending, or otherwise socially unacceptable behavior; negative or disparaging comments about another employee or a visitor; rude, discourteous, or unprofessional behavior; disparaging or offensive language; or statements, photographs, video, or audio that could reasonably be viewed as disparaging to other employees;
• No-photography/no-recording rules, including policies and prohibitions related to using camera-enabled devices; recording conversations, meetings, and images without approval; or recording coworkers’ conversations without approval;
• Insubordination, noncooperation, or on-the-job conduct that adversely affects operations, including policies and prohibitions related to insubordination, unlawful or improper conduct, uncooperative behavior, a refusal to comply with orders or perform work, or other on-the-job conduct that adversely affects the employer’s operations;
• Disruptive behavior, including policies and prohibitions related to boisterous behavior and other disruptive conduct, creating disturbances on company premises or creating discord with clients or fellow employees, or disorderly conduct on company premises or during working hours for any reason. (The no-disruption rule may not be used to discipline employees for a strike or walkout.);
• Confidential, proprietary, and customer information or documents, including policies and prohibitions related to nondisclosure of customer information; nondisclosure of confidential financial data or other nonpublic proprietary company information; nondisclosure of confidential information to partners, vendors, customers, or other employees; and nondisclosure of business secrets or other confidential information;
• Defamation or misrepresentation, including policies and prohibitions related to misrepresenting company products, services, or employees or sending defamatory e-mails;
• Use of employer logos or intellectual property, including policies and prohibitions related to use of company logos or intellectual property for non-business-related purposes;
• Authorization to speak on behalf of the company, including policies and prohibitions related to employees not being authorized to comment to the media and only designated spokespersons being able to respond to media requests for information; and
• Disloyalty, nepotism, or self-enrichment, including policies and prohibitions related to conduct that is disloyal, competitive, or damaging to the company; illegal acts in restraint of trade; employment with another employer; and activities or investments that compete with the company, interfere with an employee’s judgment regarding the company’s best interests, or exploit the employee’s position with the company for personal gain.

Category 2: Rules that Require Individualized Scrutiny

Category 2 rules are not obviously lawful or unlawful, and must be evaluated on a case-by-case basis to determine whether they would interfere with employees’ NLRA rights and, if so, whether any adverse impact on employees’ rights is outweighed by legitimate justifications. Examples of policies or rules that must be evaluated on a case-by-case basis include:

• Broad conflict-of-interest rules that do not specifically target fraud or self-enrichment;
• Confidentiality rules that are not limited to restricting the use of customer or proprietary information;
• Rules that restrict disparagement or criticism of the employer rather than disparagement of other employees;
• Rules that restrict the use of the employer’s name rather than the use of its logo or trademark;
• Media contact rules that generally restrict employees from speaking to the media or third parties about the employer rather than speaking to the media/third parties on the employer’s behalf;
• Rules that ban off-duty conduct that might harm the employer rather than banning insubordinate or disruptive conduct at work; and
• Rules that ban false or inaccurate statements rather than defamatory statements.

Category 3: Rules that Are Unlawful

Category 3 rules are generally unlawful, and you should ensure that you don’t implement any policies or practices that fall into this third category. Examples of policies or rules that are unlawful include rules that address:

• Confidentiality of wages, benefits, or working conditions, including policies and prohibitions related to the disclosure of salary; employment contracts and terms of employment; wages, commissions, or performance bonuses; or information about an employee’s identity or disclosures to the media or any third party about any employee’s employment and working conditions; and
• Membership in an outside organization or voting on matters that concern the employer, including policies and prohibitions related to general restrictions on an employee’s membership in any outside organization (because this may reasonably be interpreted to include union activity) or general restrictions on employee voting (because this may reasonably be interpreted to include voting on union matters).

Bottom Line

The General Counsel’s memo finally gives employers the necessary guidance to properly apply the revised standard for lawful workplace policies set forth in Boeing in December. The three categories enumerated in the memo include examples to help you ensure the proper balance between a policy’s negative impact on employees’ Section 7 rights and your right to maintain discipline and productivity in the workplace.

As always, you should continue to work with your employment lawyers to ensure your policies comply with the law, and keep performing annual policy audits and reviews. Categories 2 and 3 contain some “red flag” areas that you should scrutinize and use as guidance for revising your policies if necessary. On the other hand, you can look to Category 1 for some much-welcomed breathing room.

KrisAnn Norby-Jahner is an Attorney at Vogel Law Firm and can be reached at knorby-jahner@vogellaw.com or 701-258-7899.