Heartburn and the Employee Handbook – Ensuring Your Policies Do Not Violate Labor Law

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Heartburn and the Employee Handbook – Ensuring Your Policies Do Not Violate Labor Law

June 2014

Under current private sector labor law or in states that maintain a public sector labor law patterned after the National Labor Relations Act (NLRA), an employer may face an unfair labor practice (ULP) charge if the employer maintains a policy that restricts an employee in the exercise of his rights under the law. This is true whether or not the employer is unionized and whether or not disciplinary action has been taken. The mere existence of a policy or provision in an employee handbook that may be viewed as discouraging protected concerted activity could result in a ULP charge, even if the rule has never been applied to restrict employee activity.

As we do so often when state public sector labor law is undeveloped in an area, we look to National Labor Relations Board (NLRB or Board) precedent and the application on private employers for guidance. Such is the case here.

Section 7 of the NLRA states that:[1]

“Employees shall have 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, and shall also have the right to refrain from any or all such activities…”.

Section 8(a)(1) of the NLRA states that “it shall be an unfair labor practice for an employer…(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [Section 7]…”.

The U.S. Supreme Court has ruled that an employer may enforce “reasonable rules” covering employee conduct during working time, but “time outside working hours … is an employee’s time to use as he wishes without unreasonable restraint, although he is on company property.” Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945). In evaluating employer work rules limiting employee conduct in the workplace, the Section 7 rights of employees, or the right to engage in protected concerted activity, and the rights and interests of employers must be balanced.

In considering whether a policy or employee handbook provision violates Section 8(a)(1), the NLRB inquires whether a rule would “reasonably tend[ ] to chill employees in the exercise of their Section 7 rights.” Knauz BMW, 358 NLRB No. 164 (2012). There is little dispute that a rule that explicitly restricts Section 7 rights is unlawful. Even if a rule does not explicitly restrict the right to engage in protected concerted activity, a violation may nevertheless be established by showing that: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. There has been a great deal of activity in recent years on this topic. Some of the most recent cases of interest are reviewed below:

  • Employee E-mail Policy. The NLRB previously ruled that there is no statutory right to use an employer’s e-mail system for union communications. The Board found that employers have a basic property right in their e-mail systems. As a result, employers may establish policies prohibiting employee use of e-mail for “non-job related solicitations.” Register Guard, 351 NLRB No. 70 (2008). On April 30, 2014, the Board announced it would revisit Register Guard in the case of Purple Communications Inc., No. 21-CA-095151 (Oct. 24, 2013). At issue in Purple Communications, is the legality of the following two employer handbook policies:
The first policy provided as follows:

  • “The following acts are specifically prohibited and will not be tolerated by Purple. Violations will result in disciplinary action, up to and including terminations of employment.
* * *
  • Causing, creating, or participating in a disruption of any kind during working hours on Company property[.]”
 
The second policy concerned electronic communications and provided:
  • “Computers, laptops, internet access, voicemail, electronic mail (email), Blackberry, cellular telephones and/or other Company equipment is provided and maintained by Purple to facilitate Company business. All information and messages stored, sent, and received on these systems are the sole and exclusive property of the Company, regardless of author or recipient. All such equipment and access should be used for business purposes only.

* * *
  • Employees are strictly prohibited from using the computer, internet, voicemail and email systems, and other Company equipment in connection with any of the following activities:
* * *
  • Engaging in activities on behalf of organization or persons with no professional or business affiliation with the Company.
* * *
  • Sending uninvited email of personal nature.”
In April, 2014, the Board invited briefs to address the issues in Purple Communications and whether the Board should reconsider the conclusions reached in Register-Guard. Among the issues expected to be addressed include, what standard of access and restrictions to an employer’s electronic systems should be established and what type of technological issues the Board should consider.
  • Confidentiality Policy. In the relevant case, the employer terminated an employee for discussing staffing shortages with co-workers, which stemmed from a perception of high executive salaries. The employer’s relevant handbook policy stated, “Idle gossip or dissemination of confidential information within [the company], such as personal or financial information, etc., will subject the responsible employee to disciplinary action or possible termination.” The NLRB invalidated the handbook policy because an employee could reasonably construe the policy to prohibit discussion of wages or other working conditions with co-workers, in violation of the NLRA. MCPc, Inc., 360 NLRB No. 39 (2014). Similar policies were invalidated in Quicken Loans, Inc., 359 NLRB No. 141 (2013) and Karl Knauz Motors, Inc., 358 NLRB No. 164 (2012).
  • Negativity and Gossip Policy. There have been a number of recent cases where unions have filed unfair labor practices disputing employer policies dealing with negativity and gossip. In Hill & Dales General Hospital, 360 NLRB No. 70 (April 1, 2014), there were three provisions of the employer hospital’s policy at issue. In sum, the policy prohibited the making of “negative comments about fellow team members” and committed employees to representing the company in a “positive and professional manner.” The NLRB found that prohibiting “negativity” and “negative comments” is unlawful. The Board provided further direction by reasoning that the word “ethical” in a rule addressing conflicts of interests when coupled with the word “positive” has a significantly narrower scope of meaning than the word “positive” coupled with “professional.” As such, the former would be more likely to be found lawful in an employer policy than the latter.
In another similar case, an administrative law judge (ALJ) found a policy that prohibited gossip to be overly broad and ambiguous. Laurus Technical Institute, No. 10-CA-093934 (December 112, 2013). The policy contained a broad definition of gossip and the ALJ reasoned that a reasonable employee could view the policy as “chilling” his Section 7 rights. The ALJ’s decision is currently on review before the Board.      

As the state public labor relations acts are patterned on the NLRA, the state acts contain similar language and restrictions to Sections 7 and 8(a)(1) of the NLRA. In determining whether a public employer’s policy will be deemed in compliance, if challenged, public employers may expect a similar analysis of the law as that provided by the NLRB and are advised to act accordingly. Some measures public employers should consider taking to ward off such a challenge include:
  • Conducting a regular review of policies to ensure they are not overly broad or ambiguous or could be interpreted as such. Avoid language that prohibits employees from making disparaging remarks about supervisors or the employer or discussing the terms and conditions of their employment, including pay or other related issues.
  • Advise employees in relevant policies that they have the right to discuss wages, hours, and other terms and conditions of employment, consistent with public sector labor law requirements and other relevant laws. Threats of discipline or termination for such discussions will likely raise potential legal concerns.
  • Regularly review changes to laws and updated case law to ensure policies are up to date and current.
  • Ensure supervisors and managers are trained to deal with employee conduct and enforcement of policies and have a basic understanding of the law of protected concerted activity.
* As published in NPELRA Connections Newsletter.
[1] Section 7 rights will be referred to in this article as “Section 7” or the right to engage in protected concerted activity.
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