NLRB General Counsel Shines Guideline Light On Employer Work Rules

In an effort to “help employers to review their handbooks and other rules, and conform them if necessary, to ensure that they are lawful,” the National Labor Relations Board's (the Board) general counsel recently issued a 30-page memorandum setting forth guidance on employers' internal personnel policies to ensure compliance with the National Labor Relations Act (the Act). The report is relevant to nearly all private employers, regardless of whether they have union-represented employees.

Although the Board's general counsel said in a letter accompanying the guidance memorandum that he believes “most employers do not draft their employee handbooks with the object of prohibiting or restricting conduct protected by the [Act],” the guidance memorandum is troubling because it finds that many seemingly innocuous, sensible employer handbook provisions and policies are unlawful because they could potentially be interpreted to restrict employees' rights to engage in activities protected under the Act.

While the guidance memorandum has no independent legal authority, it does signal to all employers (union and non-union) those areas that the general counsel's office will investigate in pursuing unfair labor practice charges. As we have seen over the last couple of years, the Board has become much more aggressive in pursuing charges against non-union companies for policy violations, and this guidance memorandum helps clarify the general counsel's position.

Under the Act, Section 7 protects the rights of all non-management employees, union and non-union, to discuss and to complain about wages, hours and other terms and conditions of employment. The guidance memorandum focuses on eight distinct sets of rules or policies, but cautions that the examples are illustrative, not exclusive. It gives a number of examples of unlawful versus lawful policies and rules, the most significant of which are as follows.

Rules Regarding Confidentiality

Employees have the right to discuss wages, hours and other terms and conditions of employment with fellow employees, as well as with non-employees, such as union representatives. Thus, an employer's confidentiality policy that specifically prohibits employee discussions of terms and conditions of employment, or that employees would reasonably understand to prohibit such discussions, violates the Act. Examples of unlawful rules include:

• Do not discuss customer or employee information outside of work, including phone numbers and addresses.
• Never publish or disclose the employer's or another's confidential information.

On the other hand, the following rules have been found lawful:

• No unauthorized disclosure of business “secrets” or other confidential information.
• Do not disclose confidential financial data or other non-public proprietary confidential information. Do not share confidential information regarding business partners, vendors or customers.

Rules Regarding Conduct Toward Fellow Employees

In addition to employees' rights to publicly discuss their terms and conditions of employment and to criticize their employer's labor policies, employees also have the right to argue and debate with each other about unions, management and their terms and conditions of employment. Thus, the following rules have been found unlawful:

• 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.

Examples of lawful rules include:

• Making inappropriate gestures, including visual staring.
• Threating, intimidating, coercing, or otherwise interfering with the job performance of fellow employees or visitors.

Rules Regarding Employee Conduct Toward the Company and Supervisors

Another area that the Board has carefully scrutinized over the last several years is cases involving disciplinary action where employees have been insubordinate, negative, or disrespectful toward supervisors or upper management. Once again, the Board's rationale is that employees have a protected right under the NLRA to be disrespectful to supervisors regarding their terms and conditions of employment. Examples of unlawful rules concerning this issue include:

• Be respectful to the company, other employees, customers, partners and competitors.
• Disrespectful conduct or insubordination, including, but not limited to, refusing to follow orders from a supervisor or a designated representative.

Examples of lawful rules include:

• No rudeness or unprofessional behavior toward a customer or anyone in contact with the company.
• Being insubordinate, threating, intimidating, disrespectful or assaulting a manager/supervisor, coworker, customer or vendor will result in discipline.

Rules Regarding Employee Communications with Outside Parties

The guidance memorandum notes that employees have a right to communicate with news media, government agencies and third parties about wages, benefits and terms and conditions of employment. Consequently, handbook rules that restrict communications with third parties and particularly the media are frequently found unlawful. As a result, the following rule has been found unlawful:

• 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.

An example of a lawful rule includes:

• 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.

Rules Restricting Use of Company Logos, Copyrights And Trademarks

While recognizing that employers have a right to protect their intellectual property, the Board's general counsel believes that an employer cannot restrict the fair use of the intellectual property in the exercise of employees' rights protected under the Act. The guidance memorandum notes that employees have a right to use the employer's name and logo on picket signs, leaflets and other protest material. Examples of unlawful rules concerning this issue include:

• 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 social media profile [is banned] ' In addition, it is prohibited to use [the employer's] logos, trademarks or any other copyrighted material.

On the other hand, the following rule has been found lawful:

• For [the employer's] protection, as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks and other intellectual property, including [the employer's] own copyrights, trademarks and brands.

Employer Rules Regarding Leaving Work

The guidance memorandum notes that one of the most fundamental rights employees have is the right to go on strike. Accordingly, the Board has determined rules that regulate when employees can leave work are unlawful if employees reasonably would read them to forbid protected strike actions and walkouts. Examples of unlawful rules include:

• Walking off the job is prohibited.
• Failure to report to your scheduled shift for more than three consecutive days without prior authorization or walking off the job during a scheduled shift is prohibited.

Examples of lawful rules include:

• Entering or leaving company property without permission may result in discharge.
• Walking off a shift, failing to report for a scheduled shift and leaving early without supervisor permission are also grounds for immediate termination.

The reasoning here is that in the absence of terms like “work stoppage” or “walking off the job,” a rule forbidding employees from leaving work without permission will not reasonably be read to encompass strikes.

Employer Conflict-of-Interest Rules

Employers frequently include codes of conduct, non-competition or non-solicitation agreements in their company policies. Some of these rules have come under close scrutiny by the Board. As a result, if an employer's conflict-of-interest rule would reasonably be read to discourage protest activity, boycotts or support for a union, the rule will be found unlawful. Thus, the following rule was considered unlawful:

• Employees may not engage in any action that is not in the best interest of the employer.

On the other hand, the following rule was found lawful:

• Employees must refrain from any activity or having any financial interest that is inconsistent with the company's best interest and also must refrain from activities, investments or associations 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 gains.

Employer Takeaways

As the general counsel pointed out in his letter accompanying the guidance memorandum, even well-intentioned employer rules and policies can and do violate the Act. Thus, even though the Board's “logic” underlying the lawful and unlawful distinctions noted above is difficult to decipher, now is the time for employers to carefully review their employee handbooks, policies and other written procedures in light of these guidelines to avoid the potential of any unfair labor practice charge.

Thomas G. Servodidio chairs Duane Morris' Employment, Labor, Benefits and Immigration Practice Group, and also serves on the firm's Executive Committee. He is resident in the firm's Philadelphia office. Adam Keating is an associate in the Atlanta office. This article is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this article are those of the authors and do not necessarily reflect the views of the authors' law firm or its individual partners.

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In an effort to “help employers to review their handbooks and other rules, and conform them if necessary, to ensure that they are lawful,” the National Labor Relations Board's (the Board) general counsel recently issued a 30-page memorandum setting forth guidance on employers' internal personnel policies to ensure compliance with the National Labor Relations Act (the Act). The report is relevant to nearly all private employers, regardless of whether they have union-represented employees.

Although the Board's general counsel said in a letter accompanying the guidance memorandum that he believes “most employers do not draft their employee handbooks with the object of prohibiting or restricting conduct protected by the [Act],” the guidance memorandum is troubling because it finds that many seemingly innocuous, sensible employer handbook provisions and policies are unlawful because they could potentially be interpreted to restrict employees' rights to engage in activities protected under the Act.

While the guidance memorandum has no independent legal authority, it does signal to all employers (union and non-union) those areas that the general counsel's office will investigate in pursuing unfair labor practice charges. As we have seen over the last couple of years, the Board has become much more aggressive in pursuing charges against non-union companies for policy violations, and this guidance memorandum helps clarify the general counsel's position.

Under the Act, Section 7 protects the rights of all non-management employees, union and non-union, to discuss and to complain about wages, hours and other terms and conditions of employment. The guidance memorandum focuses on eight distinct sets of rules or policies, but cautions that the examples are illustrative, not exclusive. It gives a number of examples of unlawful versus lawful policies and rules, the most significant of which are as follows.

Rules Regarding Confidentiality

Employees have the right to discuss wages, hours and other terms and conditions of employment with fellow employees, as well as with non-employees, such as union representatives. Thus, an employer's confidentiality policy that specifically prohibits employee discussions of terms and conditions of employment, or that employees would reasonably understand to prohibit such discussions, violates the Act. Examples of unlawful rules include:

• Do not discuss customer or employee information outside of work, including phone numbers and addresses.
• Never publish or disclose the employer's or another's confidential information.

On the other hand, the following rules have been found lawful:

• No unauthorized disclosure of business “secrets” or other confidential information.
• Do not disclose confidential financial data or other non-public proprietary confidential information. Do not share confidential information regarding business partners, vendors or customers.

Rules Regarding Conduct Toward Fellow Employees

In addition to employees' rights to publicly discuss their terms and conditions of employment and to criticize their employer's labor policies, employees also have the right to argue and debate with each other about unions, management and their terms and conditions of employment. Thus, the following rules have been found unlawful:

• 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.

Examples of lawful rules include:

• Making inappropriate gestures, including visual staring.
• Threating, intimidating, coercing, or otherwise interfering with the job performance of fellow employees or visitors.

Rules Regarding Employee Conduct Toward the Company and Supervisors

Another area that the Board has carefully scrutinized over the last several years is cases involving disciplinary action where employees have been insubordinate, negative, or disrespectful toward supervisors or upper management. Once again, the Board's rationale is that employees have a protected right under the NLRA to be disrespectful to supervisors regarding their terms and conditions of employment. Examples of unlawful rules concerning this issue include:

• Be respectful to the company, other employees, customers, partners and competitors.
• Disrespectful conduct or insubordination, including, but not limited to, refusing to follow orders from a supervisor or a designated representative.

Examples of lawful rules include:

• No rudeness or unprofessional behavior toward a customer or anyone in contact with the company.
• Being insubordinate, threating, intimidating, disrespectful or assaulting a manager/supervisor, coworker, customer or vendor will result in discipline.

Rules Regarding Employee Communications with Outside Parties

The guidance memorandum notes that employees have a right to communicate with news media, government agencies and third parties about wages, benefits and terms and conditions of employment. Consequently, handbook rules that restrict communications with third parties and particularly the media are frequently found unlawful. As a result, the following rule has been found unlawful:

• 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.

An example of a lawful rule includes:

• 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.

Rules Restricting Use of Company Logos, Copyrights And Trademarks

While recognizing that employers have a right to protect their intellectual property, the Board's general counsel believes that an employer cannot restrict the fair use of the intellectual property in the exercise of employees' rights protected under the Act. The guidance memorandum notes that employees have a right to use the employer's name and logo on picket signs, leaflets and other protest material. Examples of unlawful rules concerning this issue include:

• 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 social media profile [is banned] ' In addition, it is prohibited to use [the employer's] logos, trademarks or any other copyrighted material.

On the other hand, the following rule has been found lawful:

• For [the employer's] protection, as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks and other intellectual property, including [the employer's] own copyrights, trademarks and brands.

Employer Rules Regarding Leaving Work

The guidance memorandum notes that one of the most fundamental rights employees have is the right to go on strike. Accordingly, the Board has determined rules that regulate when employees can leave work are unlawful if employees reasonably would read them to forbid protected strike actions and walkouts. Examples of unlawful rules include:

• Walking off the job is prohibited.
• Failure to report to your scheduled shift for more than three consecutive days without prior authorization or walking off the job during a scheduled shift is prohibited.

Examples of lawful rules include:

• Entering or leaving company property without permission may result in discharge.
• Walking off a shift, failing to report for a scheduled shift and leaving early without supervisor permission are also grounds for immediate termination.

The reasoning here is that in the absence of terms like “work stoppage” or “walking off the job,” a rule forbidding employees from leaving work without permission will not reasonably be read to encompass strikes.

Employer Conflict-of-Interest Rules

Employers frequently include codes of conduct, non-competition or non-solicitation agreements in their company policies. Some of these rules have come under close scrutiny by the Board. As a result, if an employer's conflict-of-interest rule would reasonably be read to discourage protest activity, boycotts or support for a union, the rule will be found unlawful. Thus, the following rule was considered unlawful:

• Employees may not engage in any action that is not in the best interest of the employer.

On the other hand, the following rule was found lawful:

• Employees must refrain from any activity or having any financial interest that is inconsistent with the company's best interest and also must refrain from activities, investments or associations 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 gains.

Employer Takeaways

As the general counsel pointed out in his letter accompanying the guidance memorandum, even well-intentioned employer rules and policies can and do violate the Act. Thus, even though the Board's “logic” underlying the lawful and unlawful distinctions noted above is difficult to decipher, now is the time for employers to carefully review their employee handbooks, policies and other written procedures in light of these guidelines to avoid the potential of any unfair labor practice charge.

Thomas G. Servodidio chairs Duane Morris' Employment, Labor, Benefits and Immigration Practice Group, and also serves on the firm's Executive Committee. He is resident in the firm's Philadelphia office. Adam Keating is an associate in the Atlanta office. This article is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this article are those of the authors and do not necessarily reflect the views of the authors' law firm or its individual partners.

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