NLRB Tips: GC Memorandum 15-04 Offers Guidance on Valid Handbook Rules – Agency Scrutiny to Continue

April 17, 2015   Written by:   Filed under: Breaking News


On March 19, 2015, the NLRB’s General Counsel issued a report offering guidance as to how to fashion employee handbook rules that won’t be deemed unlawful by the NLRB. The memorandum, located on the Board’s website, is divided into two sections and looks at the rules “frequently at issue” in cases before the Agency, including confidentiality rules, professionalism rules, trademark rules, and photography and recording rules.

The general rules applied in this area of the law are straightforward. Application of the general rules is where difficulty arises. Under Lutheran Heritage Village Livonia, 343 NLRB 646 (2004), the mere maintenance of a work rule may violate Section 8(a)(1) of the Act if the rule has a “chilling effect” on employees’ Section 7 activity (i. e. – a rule explicitly restricting protected, concerted activity). Even if a rule does not explicitly prohibit Section 7 activity, it will still be found illegal if 1) employees would “reasonably construe” the rule’s language to prohibit Section 7 activity; 2) the rule was promulgated in response to union or other Section 7 activity; 3) the rule was actually applied to restrict the exercise of Section 7 rights.

Part one of the memorandum juxtaposes rules found to be unlawful with rules that would be found legal by the NLRB, and explains the Board’s rationale for its reasoning in each instance.

Part two of the memorandum deals specifically with Wendy’s corporate handbook rules that were found illegal after an ULP charge was filed against the company and then revised to comply with the NLRB viewpoint pursuant to an informal settlement.

The relevant portions of Part I of the GC memo are examined below. As the memorandum is thirty pages, the discussion is not intended as an exhaustive review of its contents. Actual rules are represented as bullet points below.

Part I – Examples of Lawful and Unlawful Rules

1.   Rules Regarding Confidentiality

Employees have a Section 7 right to discuss wages, hours, and other terms and conditions of employment with fellow employees. Confidentiality rules that broadly encompass “employee” or “personnel” information, without further clarification, will reasonably be construed by employees to restrict Section 7 protected communications.

The following rule was considered unlawful because it restricted disclosure of employee information and was therefore overly-broad:

  • Do not discuss “customer or employee information” outside of work, including “phone numbers [and] addresses.”

The below referenced rules were found to be facially unlawful, even though they did not explicitly reference terms and conditions of employment or employee information, because the rules contained broad restrictions and did not clarify, in express language or contextually, that they did not restrict Section 7 communications:

  • Prohibiting employees from “[d]isclosing … details about the [Employer].”
  • “Sharing of [overheard conversations at the work site] with your co-workers, the public, or anyone outside of your immediate work group is strictly prohibited.”
  • “Discuss work matters only with other [Employer] employees who have a specific business reason to know or have access to such information … Do not discuss work matters in public places.”
  • “[I]f something is not public information, you must not share it.”

Finally, employees not only have the right to protest their wages and working conditions, but also have the right to share information in support of those complaints. Thus, the below rule would “reasonably lead” employees to believe that they cannot disclose such information because it might adversely affect the employer’s interest, image or reputation.

  • Confidential Information is: “All information in which its loss, undue use or unauthorized disclosure could adversely affect the [Employer’s] interests, image and reputation or compromise personal and private information of its members.”

The following are examples of confidentiality rules found legal by the NLRB. The Board found these rules “facially lawful because: 1) they do not reference information regarding employees or employee terms and conditions of employment, 2) although they use the general term “confidential,” they do not define it in an overbroad manner, and 3) they do not otherwise contain language that would reasonably be construed to prohibit Section 7 communications:

  • No unauthorized disclosure of “business ‘secrets’ or other confidential information.”
  • “Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [Employer] is cause for disciplinary action, including termination.”
  • “Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding business partners, vendors or customer.”

Even where a confidentiality policy contains overly-broad language, the rule will be found lawful if, viewed in context; employees would not reasonably conclude that it prohibited Section 7 activity. Thus, the following language was found appropriate because it was contained in a section of a policy that talked of conflicts of interest and compliance with SEC regulations, and state and federal laws. The Board concluded that employees would understand that the language applied to customer credit cards, contracts and trade secrets, not Section 7 communications:

  • Prohibition on disclosure of all “information acquired in the course of one’s work.”

2.   Rules Governing Employee Conduct toward the Company and Supervisors

As outlined in previous LMV ELBs, the NLRB appears to have abandoned common sense in developing protections of employees engaged in Section 7 activity. Disrespectful and obscene language has been sanctioned, where the behavior arguably occurred during an incident involving protected, concerted activity.

Thus, handbook rules that that can reasonably be read to prohibit protected concerted criticism of the employer will be found to be overly-broad. For example, a rule that prohibits employees from engaging in “disrespectful,” “negative,” ‘inappropriate,” or “rude” conduct towards the employer or management, absent sufficient clarification or context, will usually be unlawful. It does not matter if the criticism is false or defamatory, so it is important to specify that false statements must be “maliciously false statements” in reckless disregard for the truth.

Examples of Lawful Rules Regulating Employee Conduct towards the Employer and Fellow Employees

Rules that simply require employees to be respectful to customers and competitors, but do not mention the Company or its management, will be found legal. The following rules are examples of legal prohibitions:

  • No “rudeness or unprofessional behavior toward a customer, or anyone in contact with” the company.
  • “Employees will not be discourteous or disrespectful to a customer or any member of the public while in the course and scope of [company] business.”

Cooperation rules are allowed.

  • “Each employee is expected to work in a cooperative manner with management/ supervision, coworkers, customers and vendors.”

Rules that apply to employee misconduct investigations are legal, but only when read in context as not prohibiting cooperation during ULP investigations or preparation for arbitrations –

  • “Each employee is expected to abide by Company policies to cooperate fully in any investigation that the Company may undertake.”

The General Counsel claims that rules are not read in “isolation.” Therefore, it is critical that all rules are put into a legal context, such as a broader discussion of serious misconduct such as assault, battery, threats, and insubordination towards legitimate work requests.

The context admonition applies to “conduct regulations” directed to employees. The following examples were found to be overly-broad because the prohibitions were not put in “context.”

  • “[D]on’t pick fights” online.
  • Do not make “insulting, embarrassing, hurtful or abusive comments about other company employees online,” and “avoid the use of offensive, derogatory, or prejudicial comments.”
  • “[S]how proper consideration for others’ privacy and for topics that may be considered objectionable or inflammatory, such a politics and religion.”
  • Do not send “unwanted, offensive, or inappropriate” e-mails.
  • Material that is fraudulent, harassing, embarrassing, sexually explicit, profane, obscene, intimidating, defamatory, or otherwise unlawful or inappropriate may not be sent by e-mail …”

The last example could be made legal by inclusion of a “savings clause” in the rule, making clear that the prohibition did not apply to discussion of wages, hours, or other working conditions and the removal of the “intimidation” prohibition, unless it is put in context.

3.   Rules Regulating Third- Party Communications

Another right employees have under Section 7 is the right to communicate with the news media, government agencies, and other third parties concerning wages, hours, benefits or other terms and conditions of employment. Company media policies frequently run afoul of this Board prohibition. While companies may control who makes official statements, it must be careful not to establish rules that may be “reasonably read” to prohibit Section 7 activity by employees. Savings clauses may be helpful in this area.

Examples of Unlawful Rules Governing Third-Party Communications

  • Employees are not “authorized to speak to any representatives of the print and/or electronic media about company matters” unless designated to do so by HR, and must refer all media inquiries to the company media hotline.

This example of an overly-broad rule was illegal because employees would “reasonably construe” the phrase “company matters” to restrict their right to discuss wages, hours, or other working conditions

  • “[A]ssociates are not authorized to answer questions form the news media … When approached for information, you should refer the person to [the Employer’s] Media Relations Department.”
  • “[A]ll inquiries from the media must be referred to the Director of Operations in the corporate office, no exceptions.”
  • “If you are contacted by any government agency you should contact the Law Department immediately for assistance.”

Examples of Lawful Rules on Employee Contact with Outside Parties

The following examples are provided. The Board concluded that, in context, the language could not be reasonably construed as restricting employee rights to engage in Section 7 activity:

  • “The Company strives to anticipate and manage crisis situations in order to reduce disruption to our employees and to maintain our reputation as a high quality company. To best serve these objectives, the company will respond to the news media in a timely and professional manner only through the designated spokespersons.”
  • “Events may occur at our stores that will draw immediate attention form the news media. It is imperative that one person speaks for the Company to deliver an appropriate message and to avoid giving misinformation in any media inquiry. While reporters frequently shop as customers and may ask question about a matter, good reporters identify themselves prior to asking questions. Every … employee is expected to adhere to the following media policy: … 2. Answer all media …”

4.   Rules Restricting Use of Company Logos, Copyright, and Trademarks

Although copyright holders have a clear interest in protecting its intellectual property (IP), rules cannot prohibit employee’s fair use of that property. For example, although company logos and names may be protected under IP laws, an employer may not restrict their use when used in a Section 7 use context – such as on picket signs, leaflets and other protest material. In other words, proprietary interests are not implicated by employees’ non-commercial use of protected IP used in the course of Section 7 activity. Overly-broad restrictions on the use of IP are routinely struck down:

  • Do “not use any Company logos, trademarks, graphics, or advertising materials” in social media.
  • Do not use “other people’s property,” such as trademarks, without permission in social media.
  • “Use of [the Employer’s] name, address or other information in your personal profile [is banned] … In addition, it is prohibited to use [the Employer’s] logos, trademarks or any other copyrighted material.”
  • “Company logos and trademarks may not be used without written consent …”

5.   Employer Rules that Restrict Photography and Recording

Employees have a Section 7 right to photograph and make recordings in furtherance of their protected, concerted activity. Thus, rules which totally ban such activity or prohibit the use or possession of personal cameras or recording devices, are unlawfully broad and would be found illegal.

However, company restrictions on workers recording or photographing can be lawful if they are limited in scope. For example, where a no-photography rule was instituted in response to a breach of patient privacy, the Board found that employees would not reasonably understand that the restriction applied to Section 7 activity.

6.   Rules Restricting Employees from Leaving Work

One of the fundamental rights that employees have under the NLRA is the right to go on strike. Accordingly, rules that regulate when employees can leave work run the risk of being found illegal if employees reasonably would read them to forbid protected strike actions and walkouts.

However, if the rules make no mention of “strikes,” “walk-outs,” or “disruptions,” employees will understand the restrictions pertain to employees leaving the job for reasons unrelated to protected concerted activity. For example, going to McDonald’s for lunch during work time is not considered Section 7 activity.

Savings clauses, with examples included, might be considered appropriate in designing these rules.

The Bottom Line

In composing social media and handbook policies, an employer may avoid being found in violation of the NLRB proscriptions by following the rules suggested below:

  1. No facially invalid or explicit prohibitions on engaging in Section 7 activity.
  2. Context is important. Make sure restrictions are contained in facially legal restrictions and employ the use of liberal examples of the behavior that the employer is restricting.
  3. Savings clauses can be your friend. Use them and repeat them if some restrictions might be considered “iffy.” Insert the savings clauses in close proximity to the rules that are being instituted, not just at the beginning or end of a 50-page employee handbook.
  4. Finally, this can be a tricky area to navigate. Employers should strongly consider getting their handbook policies reviewed by counsel.

This article was prepared by Frank F. Rox, Jr., NLRB Consultant for the law firm of Lehr Middlebrooks Vreeland & Thompson, P.C. Prior to working with the firm, Mr. Rox served as a Senior Trial Attorney for the National Labor Relations Board for more than 30 years. Mr. Rox can be reached at (205) 323-8217.