New rules for work rules

June 27th, 2018 by Fiona W. Ong at Shawe Rosenthal


This blog was written by Fiona Ong at Shawe Rosenthal, author of our Maryland Human Resources Manual. You can find the original blog post here and their Labor & Employment Report newsletter (which is excellent) here.

 

NLRB Issues New (And More Balanced) Guidance on Handbook Rules

On June 6, 2018, the General Counsel of the National Labor Relations Board issued guidance on lawful and unlawful handbook rules under the National Labor Relations Act. This guidance follows the GC’s December 1, 2017 withdrawal of prior guidance on handbook rules that had been issued in 2015. Shortly thereafter, on December 14, 2017, the Board issued its decision in The Boeing Co., in which it articulated a new and more balanced test for assessing the legality of workplace rules, applicable to both unionized and non-unionized employers. 

In The Boeing Co., the Board rejected the test set forth in the 2004 case of Lutheran Heritage Village-Livonia, under which facially neutral workplace rules were deemed to violate the NLRA if they “could” be interpreted to prohibit the exercise of employees’ protected Section 7 rights to engage in concerted activity regarding the terms and conditions of their employment. Instead, the Board now only prohibits rules that “would” be so interpreted.

Under the new test, when evaluating facially neutral policies that could be reasonably interpreted to interfere with employees’ protected 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.

In connection with this test, the Board also set forth three categories of employment policies and rules, for which the Board has now identified specific types of rules that fall into each category:

Category 1: Rules that are Generally Lawful to Maintain

These rules are deemed lawful, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule. The GC has now provided an extensive list of such lawful rules (many of which had previously been found unlawful under the old test), with examples of acceptable language:

  • Civility rules. Such rules may include language prohibiting conduct that is “rude,” “discourteous,” “unbusinesslike,” or “offensive,” or that “disparages” employees. The GC noted that the vast majority of conduct covered by such a rule involves name-calling, gossip and rudeness, which are not protected by Section 7. The GC found this type of rule advances “substantial employee and employer interests,” including the prevention of illegal harassment and violence, as well as the avoidance of unnecessary conflict or a toxic work environment that could interfere with productivity and other legitimate business goals.
  • No-Photography and no-recording rules. No-photography rules prohibit the use of cameras to capture images or video, while no-recording rules prohibit the recording of conversations, phone calls, or meetings without the prior approval of those being recorded. The GC found that employers’ substantial interest in promulgating such rules include: security concerns; protection of property; protection of proprietary, confidential and customer information; avoiding legal liability; maintaining the integrity of operations; and encouraging open communication without the fear of being recorded. Although the GC notes that such rules may “occasionally chill” employees from taking pictures of protected concerted activity or working conditions, the GC finds that the employers’ substantial interest outweighs such “peripheral NLRA-protected activity.”
  • Rules against insubordination, non-cooperation, or on-the-job conduct that adversely affects operations. These rules prohibit insubordination, unlawful or improper conduct, uncooperative behavior, refusal to comply with orders or perform work, among other on-the-job conduct adversely impacting operations. The GC notes that the “vast majority” of conduct prohibited by such rules is unprotected by the NLRA, while employers have a substantial interest in maintaining discipline and production.
  • Disruptive behavior rules. Such rules prohibit “disruptive” or “disorderly” conduct, or creating a “disturbance” or “discord.” The GC finds that the majority of conduct covered by these prohibitions involved roughhousing, dangerous conduct or bad behavior that is not protected by the NLRA. Although the rules may also be read to apply to the protected activities of walkouts, protests, picketing, strikes, or presenting petitions or grievances to management, the GC opined that such rules would not prevent employees from engaging in such activities. Moreover, employers have a substantial interested in enhancing workplace productivity and safety through such rules. Such rules, of course, could not be used to discipline employees from engaging in protected activities such as a strike or walkout in some circumstances, and cannot specifically ban such activities.
  • Rules protecting confidential, proprietary, and customer information or documents. These rules protect such things as “customer information,” “confidential financial data or other non-public proprietary company information,” “company-private information,” and “business secrets or other confidential information.” The GC notes that this type of information is not impacted by Section 7 rights, unless the terms and conditions of employment are specifically included in the rule. And even then, there is no right to disclose employee information obtained through unauthorized access/use of confidential records. The GC states that the need to protect confidential, proprietary and customer information is “obvious.”
  • Rules against defamation or misrepresentation. The rules associated with this type of intentional conduct deal principally with unprotected activity, with an impact only on employees’ “peripheral” Section 7 rights to engage in unintentional defamation. Employers have a significant interest in protecting their reputation and promoting honesty.
  • Rules against using employer logos or intellectual property. The GC provides examples of such rules, such as “Employees are forbidden from using the Company’s logos for any reason,” and “Do not use any Company logo, trademark, or graphic without prior written approval.” Although the fair use of such logos for protected concerted activity must be permitted under the NLRA, the GC notes that “it is unlikely that the rule would actually cause [employees] to refrain from using [the logos]” in that context. Moreover, the GC states, any chill on the employees’ activity “would have only a peripheral effect on Section 7 rights” by keeping employees from using the logo but not stopping the protected activity itself. In contrast, employers have a significant interest in protecting their intellectual property, and their failure to police its use could result in the loss of such intellectual property. Additionally, employers have an interest in ensuring that employees’ personal social media activity does not appear to be officially sanctioned by the company through use of the company’s logo.
  • Rules requiring authorization to speak for the company. Although rules cannot ban an employee from speaking about the company, they can control who speaks on behalf of the company, in order to accomplish the employer’s legitimate interest in controlling the company’s message.
  • Rules banning disloyalty, nepotism, or self-enrichment. Such rules are intended to prevent employees from engaging in conduct that constitutes a conflict of financial interest, such as engaging in competition with the company, taking actions that are not in the company’s best interests, or using the company for personal gain. Such conduct is not protected by the NLRA, and employers have a substantial interest in avoiding these types of conflicts of interest, which “can also undermine the company’s reputation and integrity, and cause employees to doubt the fairness of personnel actions.”

Category 2: Rules that Warrant Individualized Scrutiny

These rules must be evaluated in each case as to whether it would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications. Examples of such rules are:

  • Broad conflict of interest rules.
  • Confidentiality rules broadly encompassing “employer business’ or “employee information.”
  • Rules regarding disparagement or criticism of the employer.
  • Rules regulating use of the employer’s name.
  • Rules generally restricting speaking to the media or third parties.
  • Rules banning off-duty conduct that might harm the employer.
  • Rules against making false or inaccurate statements.

Category 3: Rules that are Unlawful to Maintain

These rules are 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.

  • Confidentiality rules specifically regarding wages, benefits or working conditions. Discussion as to these topics is likely protected, and employers have no legitimate interests in banning such discussions. Thus, on balance, the right to engage in such discussions is not outweighed by any employer interest. 
  • Rules against joining outside organizations or voting on matters concerning the employer. Such rules clearly encompass the “core aspect” under the NLRA of union representation. “Because the right to join a union is a fundamental right under the Act, such a rule will always be unlawful.”



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