Lawful, Unlawful, or It Depends? NLRB Issues New Guidance on Employer Policies Affecting Section 7 Rights

Earlier this month, the National Labor Relations Board's (NLRB) General Counsel issued Memorandum GC-18-04 providing guidance on handbook rules in light of the Board’s Boeing Company decision. In Boeing, the Board reevaluated when a seemingly neutral work rule, handbook rule, or employment policy violates the rights of workers granted by Section 7 of the National Labor Relations Act (NLRA). In doing so, it adopted a new test balancing the negative impact a given rule may have on an employee’s ability to exercise his or her Section 7 rights versus the employer’s right to maintain a disciplined and productive workplace. It also laid out three categories of rules: those that are always lawful, those that are usually always unlawful, and those it depends-type rules falling into the middle category. The GC’s guidance sorts common workplace policies into these three buckets.

Before jumping into the three categories, a short primer is in order. Section 7 allows employees to join or participate in labor organizations/unions, and prohibits employers from interfering with or retaliating against employees who engage in “protected concerted activity.” Rules that ban specifically protected activity are per se unlawful. Rules that are facially neutral but impinge on an employee’s ability to engage in protected concerted activity as applied are also unlawful. With that in mind, let’s talk about the categories of rules.

Category One: Rules that are Generally Lawful to Maintain

The first category encompasses work rules governing civility, which generally do not interfere with the exercise of rights guaranteed by the Act. Examples include rules that address and regulate name-calling, gossip, rudeness and/or use of offensive language. Employees can still exercise their Section 7 rights to criticize an employer without resorting to disparaging or ad hominem attacks or language. Rules like this can help prevent toxic work environments.

Rules banning or prohibiting video recording by employees also fall into this category. However, the decision did not address rules prohibiting the use of cell phones altogether. The guidance warns that such policies may be unlawful if the employee’s main method of communication throughout the day is by cell phone.

Generally speaking, rules aimed at preventing insubordination and disruptive behavior are lawful. Employers should make clear these types of rules do not apply to specifically protect concerted activities such as walk outs, picketing, protests, strikes and employees presenting grievances to their employers.

Rules preventing unauthorized disclosure of proprietary data, confidential information and/or customer information are also allowed. Rules controlling when and how employees can use the company logo are usually lawful except when used on picket signs or leaflets or the like. Employers have the right to enforce their intellectual property and can create rule and guidelines in this regard.

Rules prohibiting defamation and misrepresentation by employees also fall into the generally lawful category. So do rules that limit who can and cannot speak for and represent the company publicly. Finally, rules that ban disloyalty, nepotism and self-enrichment that competes with or exploits the company are lawful.

Category two: Rules Warranting Individualized Scrutiny

These are rules that are not obviously lawful or unlawful, and must be evaluated on a case-by-case basis.  Context is king for rules falling under this category. Courts may examine examples given in a handbook and the type of industry/work place. They ask, does the employer’s business interest in having the rule outweigh Section 7 rights? Is there a way the rule could be reworked to accommodate both interests?

Examples of rules falling into category two include overly broad conflict of interest or confidently rules that do not focus on self-gain (i.e. a rule banning employees from sharing wage information), rules prohibiting critical statements about the employer, rules regulating use of the employer’s name (distinguished from logo or trademark), rules banning off-duty conduct that might harm the employer, and rules against making false or inaccurate statements. In distinguishing false or inaccurate statements with defamatory statements, the employee’s knowledge and intent is critical.

Category Three: Rules that are Unlawful to Maintain

Now for the rules that employers should do away with and avoid. Confidentially rules that target wages, benefits and/or work conditions are unlawful.  Employees discussing wages, especially in the context of labor unionization, is a core right of the Act.  Rules preventing or stopping employees from participating in outside organizations or voting on matters regarding the employer are also covered here. An employer’s conflict of interest policy cannot restrict employees’ involvement or activity in labor unions.

Any rule that is so broad that it could be interpreted as banning union involvement is unlawful. Employers should be more specific and tailor their rules with the goal of preventing self-dealing, nepotism, etc.

A take away regarding these guidelines is that, generally, the more specific a rule the better. Also use examples of prohibited and acceptable actions to provide context. Employers should also make sure handbooks and policies do not target wage discussions among employees, participation in unions, and non-disparaging criticism of the employer. Employers should consider, if not state, what legitimate business purpose a rule serves when it is broad or unclear.