Tag: employee handbook

September 27, 2023

NLRB Gets Tougher on Employer Work Rules

Many U.S. employers still don’t realize how much influence the National Labor Relations Board has over their workplaces. In a potentially wide-reaching decision, the federal labor board has changed its standard for applying the National Labor Relations Act to employer work rules. In other words, more rules and policies, such as those commonly found in employee handbooks, will be deemed unlawful by the NLRB if their validity is challenged.

Section 7 of the NLRA

Yes, the National Labor Relations Act gives employees the right to unionize for purposes of collective bargaining with their employers. But its protections don’t end there. The NLRA also affords employees the right to take other actions short of unionization.

Section 7 of the Act grants employees “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. . . . (It also grants the less policed right “to refrain from any or all such activities.”)

It is the protection for engaging in concerted activities for their mutual aid or protection that can be relied on to protect employees in workforces that are not represented by a union and may not even be seeking to unionize.

How Does Section 7 Affect Employee Handbooks?

The National Labor Relations Board does not permit employers to adopt workplace policies that unduly restrict employees in exercising Section 7 rights. For example, policies prohibiting employees from discussing compensation have long been deemed unlawful. How and where to draw the line, however, has been a hotly debated topic at the Board for at least the past couple of decades.

Both sides of this debate generally agree that the question is when do employer work rules go too far that they would have a tendency to chill protected employee activity. Again, employees usually have the right to share their salaries to enable them to seek better pay. So, a rule prohibiting them from discussing compensation is assumed to credibly “chill,” or prevent, such discussions without any compelling legal interest on the employer’s part. But many other employer work rules are more readily justified by legitimate purposes. Thus, the question becomes, what’s more important–the employer’s interests or the employee’s potential exercise of Section 7 rights?

Previous Standard on Employer Work Rules

In a series of decisions beginning in 2017, a Republican-majority labor board reinstituted standards for scrutinizing employer policies that give more weight to employers’ business interests. As explained by the General Counsel of the NLRB at the time, many categories of rules usually would not violate the NLRA “either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the Act, or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the rule.”

Such “usually lawful” rules included:

Civility Rules
No-Photography Rules and No-Recording Rules
Rules Against Insubordination, Non-cooperation, or On-the-job Conduct that Adversely Affects Operations
Disruptive Behavior Rules
Rules Protecting Confidential, Proprietary, and Customer Information or Documents
Rules against Defamation or Misrepresentation
Rules against Using Employer Logos or Intellectual Property
Rules Requiring Authorization to Speak for Company
Rules Banning Disloyalty, Nepotism, or Self-Enrichment

Other rules would require more individualized scrutiny based on the context, such as:

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

New, More Restrictive Standard

In the Biden administration, the NLRB shifted to a pro-labor, Democratic majority. This shift has recently culminated in a litany of reversals of Board policy. In a case involving Stericycle, Inc., the NLRB adopted “a new legal standard to decide whether an employer’s work rule that does not expressly restrict employees’ protected concerted activity under Section 7” violates the NLRA.

In other words, the NLRB has changed the standard that presumably applies to all of the bulleted categories of employer work rules above. According to the current Board majority, they have devised a new standard that “builds on and revises” a test introduced through a 2004 case (which had been since reversed during the Trump administration).

The Board majority began with the premise and assertion that “the current standard fails to account for the economic dependency of employees on their employers.” Because of that dependence, the NLRB now places the burden squarely on the employer to ensure that no employee would reasonably interpret any rule as preventing them from doing anything that might be protected activity under Section 7.

In its words, the Board initially requires proof “that a challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights.” To reiterate the employee-centric nature of that inquiry, the Board “will interpret the rule from the perspective of an employee who is subject to the rule and economically dependent on the employer, and who also contemplates engaging in protected concerted activity.”

To rebut the presumption that a rule is unlawful, the employer must now prove “that it advances legitimate and substantial business interests that cannot be achieved by a more narrowly tailored rule.”

Impact of New Standard on Old Rules

The NLRB’s August 2, 2023, decision confirms that the new standard applies even to pre-existing employer work rules. The new standard will likely be challenged in the courts. Yet, for now at least, employers who ignore it do so at the risk of NLRB prosecution. Granted, most employee handbooks aren’t the subject of unfair labor practice charges at the NLRB, even if they contain questionable and now potentially unlawful policies. However, there are certain scenarios where legal scrutiny becomes more likely.

Unions seeking to represent an employer’s workforce commonly review employee handbooks, work rules, and policy manuals. If they find anything that could violate the NLRA, they may bring charges as part of their organizing campaign.

In addition, maintaining potentially unlawful policies becomes problematic when attempting to discipline an employee for violating one of them. In that case, the employee may be motivated to go to the NLRB to challenge the discipline imposed, especially in the case of termination. In addition to other potentially costly remedies, the NLRB has the authority to reinstate employees fired for unlawful reasons.

Review Your Policies

The NLRB is creating something of a revolving door for employee handbooks. If your current work rules were written in the past few years under the then-prevailing NLRB standards, they may contain policies that the Board would now consider unlawful. On the other hand, if your relevant policies were cautiously drafted or revised during the Obama administration, they may still be acceptable to the NLRB.

In any event, all private employers (the NLRB doesn’t have jurisdiction over most government entities) should consider evaluating their policy manuals under the new standard. There is, perhaps, even more urgency if you’re in an industry or scenario where you feel at risk for future unionization or have policies you commonly rely on for discipline that might fall into the categories listed above.

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January 23, 2020

NLRB 2020 (Webinar Recap)

On January 22, 2020, I presented a complimentary webinar called “NLRB 2020: Updates for All Private Sector Employers”. For those who couldn’t attend the live webinar, we’re happy to make it available for you to watch at your convenience.

In the webinar, we discuss:

Employee Policies
Email Use
Investigatory Confidentiality
Representation Election Rule Changes
Union Issues

The National Labor Relations Board has a significant impact on private companies throughout the United States. The NLRB not only oversees union elections and management-labor relations, but also enforces employee rights to engage in concerted activities for their mutual aid and protection. Recently, the Board has taken many steps to reverse pro-labor rulings under the prior administration in Washington. We summarize many of those in this webinar.

Don’t have time to watch the whole webinar right now? Click here to download the slides from the webinar.

Why You Should Watch “NLRB 2020”

Whether you currently have unionized employees or not, recent NLRB actions could affect your company. Fortunately, it’s mostly good news for employers.

After several years of restrictive enforcement of the National Labor Relations Act, the NLRB is now reiterating private companies’ rights to run their business. While employees still enjoy many protections, employers have more leeway in several areas that would have been problematic before.

If you are concerned about potential organizing activity, be sure to learn about the new NLRB election rules. These will favor employers compared to the current rules. But the procedures don’t change until April 2020, leaving open the possibility that unions will hurry to pursue organizing campaigns and elections before then.

Plus, if you already have unionized employees, there are also updates that affect you more directly. Recent NLRB decisions restore earlier longstanding views on deferral to arbitration awards, dues checkoff, and union insignias.

We also comment on the current composition of the NLRB Board and how it could change, along with what that could mean for employers.

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June 7, 2018

New Rules for Employee Handbooks

On June 6, 2018, the General Counsel of the National Labor Relations Board issued a guidance memorandum regarding employee handbooks and other work rules. The memo applies a December 2017 NLRB case decision that permitted employers greater flexibility in drafting meaningful workplace policies.

If challenged under the National Labor Relations Act, rules will now fall into one of three categories: lawful rules, unlawful rules, and rules requiring further scrutiny. Many more rules will be deemed lawful than under the previous analysis.

1. Rules that are Generally Lawful to Maintain

The guidance memorandum identifies nine subcategories of rules that will usually not violate the National Labor Relations Act (NLRA). These rules are acceptable “either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the Act, or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the rule.”

Civility Rules

Under the Obama Administration, the NLRB routinely found that this type of rule was unlawful. Now they will usually be acceptable because they “are consistent with basic standards of harmony and civility.”

Examples of generally lawful civility rules include:

“Behavior that is rude, condescending or otherwise socially unacceptable is prohibited.”
“Disparaging the company’s employees is prohibited.”
“Employees may not post any statements, photographs, video or audio that reasonably could be viewed as disparaging to employees.”

No-Photography Rules and No-Recording Rules

The NLRB recently allowed a rule prohibiting the use of camera-enabled devices to take images or video at work. The guidance memo suggests that similar rules regarding audio recording should likewise be lawful.

However, the memo cautions that “a ban on mere possession of cell phones at work may be unlawful where the employees’ main method of communication during the work day is by cell phone.”

Rules Against Insubordination, Non-cooperation, or On-the-job Conduct that Adversely Affects Operations

The guidance memorandum acknowledges that nearly all employee handbooks contain these rules. It provides these specific examples:

“Being uncooperative with supervisors or otherwise engaging in conduct that does not support the Employer’s goals and objectives is prohibited.”
“Insubordination to a manager or lack of cooperation with fellow employees or guests is prohibited.”

Rules of this nature will generally be acceptable.

Disruptive Behavior Rules

The guidance memorandum references rules prohibiting:

“Boisterous and other disruptive conduct.”
“Creating a disturbance on Company premises or creating discord with clients or fellow employees.”

In 2016, the NLRB found the first rule above unlawful because employees could read it to prohibit lawful activity such as protests and picketing. However, the current Board will likely allow these rules. The guidance memo offers that “even if employees would read such rules as applying to strikes and walkouts (as opposed to only unprotected conduct), employees would not generally refrain from such activity merely because a rule bans disruptive conduct.”

Rules Protecting Confidential, Proprietary, and Customer Information or Documents

Confidentiality rules in employee handbooks can be problematic if they limit discussion of wage information or working conditions. But the guidance memorandum clarifies that other rules “banning the discussion of confidential, proprietary, or customer information” are now generally acceptable. “Employees do not have a right under the Act to disclose employee information obtained from unauthorized access/use of confidential records, or to remove records from the employer’s premises.”

Rules against Defamation or Misrepresentation

As recently as 2017, the NLRB held that a rule prohibiting employees from “misrepresenting the company’s products or services or its employees” was unlawful. The new guidance memorandum suggests that rule is now acceptable, recognizing that “[t]he vast majority of conduct covered by these rules is unprotected.”

Rules against Using Employer Logos or Intellectual Property

In the past, the NLRB objected to these rules:

“Employees are forbidden from using the Company’s logos for any reason.”
“Do not use any Company logo, trademark, or graphic without prior written approval.”

Now, employers may include similar rules in their employee handbooks. The current NLRB General Counsel accepts that these rules are unlikely to deter employees from “fair use of a logo on a picket sign,” which would likely be allowed under federal copyright and labor laws.

Rules Requiring Authorization to Speak for Company

As long as the rule only addresses who may speak on behalf of the company, it will generally be lawful.

Rules Banning Disloyalty, Nepotism, or Self-Enrichment

The NLRB has historically allowed rules of this nature. Examples include:

“Employees may not engage in conduct that is disloyal, competitive, or damaging to the company such as illegal acts in restraining of trade or employment with another employer.”
“Employees are banned from activities or investments that compete with the Company, interferes with one’s judgment concerning the Company’s best interests, or exploits one’s position with the Company for personal gain.”

2. Rules Warranting Individualized Scrutiny

The NLRB recognizes a gray area for rules that are not obviously lawful or unlawful on their face. Whether an employer may maintain such rules in their employee handbooks or policies manuals will depend on context.

The guidance memo advises that:

[S]uch rules should be viewed as they would by employees who interpret work rules as they apply to the everydayness of their job. Other contextual factors include the placement of the rules among other rules, the kinds of examples provided, and the type and character of the workplace.

These rules will also draw greater scrutiny if employees have actually refrained from lawful activity because of them.

Here are some rules that may fall into this category:

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

3. Rules that are Unlawful to Maintain

Finally, some rules will still readily violate the NLRA. The following will most likely get employers in trouble.

Confidentiality Rules Specifically Regarding Wages, Benefits, or Working Conditions

The ability to interact with other employees over core terms of employment is a fundamental right under federal labor law. The guidance memorandum offers that “[t]here are no legitimate interests in banning employees from discussing wages or working conditions that are sufficient to overcome Section 7 [of the NLRA] rights.”

Rules Against Joining Outside Organizations or Voting on Matters Concerning Employer

Similarly, the NLRA plainly gives employees the right to join unions. So, employers cannot directly purport to curtail that right through a workplace rule.

Revising Employee Handbooks

This NLRB guidance and the recent case decision give employers greater leeway in drafting their workplace policies. Accordingly, businesses may take this opportunity to review their employee handbooks and consider revisions. But, employers who previously revised policies to comply with earlier, more-stringent NLRB rulings could choose to retain the less-restrictive policies.