Common Handbook Policies at Risk from Emboldened NLRB
The National Labor Relations Board (“NLRB”) is accelerating its assault upon common employment policies typically found in company employee handbooks. Moreover, as of this writing, there are only three current NLRB members (out of five), all of whom are strong Union or worker advocates. Thus, employers should expect increased scrutiny, regulations, rules, and adverse decisions from the NLRB in 2013.
Quick Overview of Legal Framework (Protected Concerted Activity under Section 7).
To understand the rationale for the Board’s actions, the starting point is Section 7 of the National Labor Relations Act (“Act”), a law that has been in effect since 1935. Section 7 provides, in pertinent part, that employees have the right to engage in protected, concerted activity for their mutual aid or protection concerning their terms and conditions of employment. In determining whether an employer policy violates an employee’s Section 7 rights, the NLRB applies the following test:
A violation is generally dependent upon a showing of one of the following: 1) employees would reasonably construe the language to prohibit Section 7 activity; 2) the rule is promulgated in response to union activity; or 3) the rule has been applied to restrict the exercise of Section 7 rights. Martin Luther Memorial Home, Inc., 343 NLRB 646, 647 (2004).
The NLRB further concludes that “ambiguous employer rules–rules that reasonably could be read to have a coercive meaning–are construed against the employer.” Flex Frac Logistics, 358 NLRB No. 127 (Feb. 11, 2012). In addition, on June 18, 2012, the NLRB issued a press release and launched a webpage on its website (nlrb.gov/concerted-activity) to inform employees of their rights to engage in “protected concerted activity” and included examples of more than a dozen recent cases to help employees understand one of the “best kept secrets” of the Act.
Let’s look at a few of the NLRB’s recent decisions.
Inflexible At-Will Policy Found Unlawful.
Most employers have policies confirming that employees are employed at-will. In two recent cases, NLRB officials concluded that if the policy included language that the at-will employment relationship cannot be modified or altered in any way, it would violate Section 7 because employees have the right to seek to change their at-will status. Recognizing that these decisions caused considerable controversy, on October 31, 2012, the NLRB Acting General Counsel (AGC) released two Advice Memoranda that analyzed at-will employment clauses in two employee handbooks finding that both were lawful under the Act. Once such policy included a statement that “only the President of the Company has the authority to make any such agreement [modifying the at-will relationship] and then only in writing.” The NLRB AGC found this at-will policy lawful because the at-will relationship could possibly be changed. Thus, employees would not reasonably assume that their Section 7 rights were infringed.
PRACTICE POINT: We recommend that companies continue to inform employees that they are employed at-will. If your company’s at-will policy expressly states that it cannot be altered in any way, however, the NLRB will likely conclude that it violates the Act.
Overbroad Confidentiality Policies Are Likely Unlawful.
Employers have a legitimate interest in seeking to restrict the improper use or disclosure of their confidential or propriety information. An employer’s “confidentiality” or non-disclosure policy may violate Section 7, however, if the company defines “confidential information” too broadly such that it could interfere with an employee’s proper exercise of his Section 7 right to discuss his terms and conditions of employment.
In the recent case of Flex Frac Logistics, for example, the employer had a lengthy definition of information it deemed “confidential” that included a prohibition of any disclosure of “personnel information” to any person “outside the organization.” Violations could lead to “termination” or “legal action.” The NLRB concluded that this language was overbroad and unlawful because it prohibited employees from “discussing wages or other terms and conditions of employment with non-employees, such as Union representatives – an activity protected by Section 7 of the Act.” 358 NLRB No. 127 (Sept. 11, 2012). The Board found that even though the majority of the items were properly designated as confidential, the context of the overall confidentiality rule did nothing to “remove employees’ reasonable impression that they would face termination if they were to discuss their wages with anyone outside the company.”
PRACTICE POINT: Confidentiality or non-disclosure policies must be drafted with precision. Employees cannot be prohibited from discussing or disclosing their own personal employment terms (including their wages or benefits) to coworkers or even outsiders.
Policies that Prohibit Negative or Adverse Comments Also under Scrutiny.
In Costco Wholesale Corp., 358 NLRB No. 106 (Sept. 7, 2012), the employer had a social media policy that prohibited employees from, among other things, making statements that “damage the Company, defame any individual or damage any person’s reputation.” The NLRB found this policy overbroad and unlawful because employees could reasonably conclude that the rule required them to refrain from engaging in certain protected communications–those that may be critical of the employer or its agents. In contrast, the NLRB noted that it has upheld rules that proscribe conduct that is malicious, abusive or unlawful.
PRACTICE POINT: On May 30, 2012, the NLRB AGC issued its third report concerning social media guidance relating to employer policies. This memo is referred to as OM 12-59 and can be found on the NLRB website. Near the end of the memo, the AGC analyzed Wal-Mart’s recently revised social media policy and concluded that it was lawful in its entirety. It also attached the policy to its guidance. It is important that an employer carefully draft a social media policy tailored to its company so that employees know the rules regarding their use of social media. As the NLRB has recently issued 3 separate advice memos and decided cases such as Costco, it is clear that this is a topic of keen interest to the agency. It is best to have your policy approved by your labor counsel.
Firing for Employee Comments on Facebook Found Unlawful.
Consider the following facts: An employee, Lydia, has been openly critical of the job performance of several of her coworkers including Marianna. One Saturday morning, Marianna posted the following message on her personal Facebook page:
Lydia, a coworker, feels that we don’t help our clients enough. . . I about had it! My fellow coworkers how do u feel?
Four other coworkers added comments to the Facebook posting in which they “generally objected to the assertion that their work performance was substandard.” Lydia also saw the Facebook postings and posted her own reply: “stop with ur lies about me.” She then complained to the Executive Director and showed her the Facebook postings. The Company fired Marianna and the other four coworkers for “bullying and harassment” of Lydia in alleged violation of the Company’s “zero tolerance” policy.
Based on these facts, the NLRB decided that the terminations were unlawful. Hispanics United of Buffalo, Inc., 359 NLRB No. 37 (Dec. 14, 2012). The Board majority found that there was “no question” the employees were engaged in concerted activity that was for the “purpose of mutual aid or protection.” The Board found that the postings were “concerted” because the workers were “taking a first step towards group action to defend themselves” in anticipation that Lydia would eventually take her criticism to management.
PRACTICE POINT: This decision arising in the Facebook/social media context confirms that the Board analyses comments posted on Facebook in the same manner as it analyzes verbal comments made by employees on the shop floor, at work or in the community. There will likely be much more litigation in this area.
Conclusion
As these recent decisions show, the Labor Board has shown unprecedented interest in challenging employment policies that have been in effect for decades. It is expected that this trend will continue for the foreseeable future. Enlightened employers are best advised to seek legal guidance from their labor counsel to ensure that their policies comply with Section 7, and also before taking disciplinary action against an employee for a violation of such a policy.
