The NLRB Returns Some Sanity to the Evaluation of Workplace Policies

Posted by Attorney David McClurg in Employer-Employee Relationship, Human Resources, Labor Relations / Comments

Under President Obama, the National Labor Relations Board issued a series of decisions finding a range of workplace policies to be unlawful because employees might “reasonably construe" the rules to restrict rights protected under the National Labor Relations Act (the “Act"). Rules found to “violate" the Act included rules requiring “civility" and restricting the use of recording devices in the workplace, prohibitions against defamation and many more.

A “newly constituted" NLRB changed the standard for evaluating the validity of workplace policies in Boeing Co. decision issued last December. The Board will no longer focus on whether employees might “reasonably construe" a rule to restrict rights protected under the Act. Instead, it will balance a rule's impact on employees' protected rights against the employers' right to maintain discipline and productivity. Under this standard, a rule is “lawful" if the employer's legitimate justifications outweigh the rule's “potential" adverse impact on protected rights.

The Board identified three categories into which rules will be placed, based on whether this “balancing test" demonstrates they are: (i) lawful; (ii) unlawful; or (iii) subject to individualized scrutiny on a case-by-case basis. In a June 6, 2018 Memorandum, the NLRB's General Counsel followed up on the Board's promise to provide additional guidance on how various types of workplace policies would fit into these three categories:

Category 1 - Policies (invalidated or suspect under the prior Board) That Are Now Deemed Generally Lawful to Maintain because they do not restrict rights under the Act, or because the justification for the rule outweighs its tendency to restrict such rights, include:

• No-photography or no-recording rules that prohibit audio and video recording of conversations with co-workers, managers or third parties, phone calls or company meetings without prior approval. These rules advance the employer's interests in maintaining confidentiality of the company and customer proprietary information.
• Civility rules that prohibit conduct that is negative or disparaging of other employees, or rude, condescending or otherwise socially unacceptable conduct, offensive language, gossip, name-calling, or posting of statements, photographs, video or audio that disparage other employees. These rules advance both employee and employer interests, including an employer's responsibility to maintain a workplace free of harassment and violence.
• Rules against insubordination, non-cooperation or on-the-job conduct that adversely affects operations, including refusal to cooperate with supervisors or fellow employees, and engaging in conduct that does not support the employer's goals and objectives. These rules advance substantial employee and employer interests, including an employer's responsibility to maintain a workplace free of harassment and violence.
• Rules Against Disruptive behavior, boisterous or disorderly conduct. These rules allow an employer to prevent dangerous conduct or bad behavior and ensure safety and productivity. However, rules prohibiting core protected rights such as concerted walk-outs, protests, picketing, presentation of petitions or grievances continue to be unlawful.
• Rules protecting confidential and proprietary information or documents regarding the employer's business, business partners or customers. These rules allow an employer to protect confidential and proprietary information, as well as customer information.
• Rules against defamation or misrepresentation of the company's products, services, employees or customers. These rules allow an employer to protect themselves, their reputation, and their employees from misrepresentation, defamation and slander. However, general rules prohibiting criticism of the employer will continue to be viewed as an unlawful attempt to limit employees' ability to engage in protected activity.
• Rules against using employer logos or intellectual property for personal gain. Note, however, that a blanket prohibition of use of logos or the fair use of intellectual property, even on picket signs or in leaflets, will continue to be unlawful.
• Rules requiring authorization to speak for the company. These types of rules are appropriate because they allow an employer to designate who can speak on behalf of the employer. Note, however, that rules prohibiting an employee from speaking critically about the company to a third party continue to be unlawful, unless the employee suggests that the statements are being made on behalf of or are approved by the company.
• Rules banning disloyalty, nepotism or self-enrichment. These rules allow an employer to prevent a conflict of interest, self-dealing or maintaining a financial interest in a competitor.

Category 2 Policies Warranting “Individualized Scrutiny" to determine if any adverse impact to employees' protected rights is outweighed by employers' legitimate justifications:

• Broad conflict-of-interest rules that do not specifically target self-enrichment and that do not restrict membership in, or voting for, a union.
• Confidentiality rules that broadly encompass employer business or employee information (as opposed to “lawful" confidentiality rules specifically regarding customers and/or proprietary information.)
• Rules generally prohibiting criticism of the employer (as opposed to “lawful" civility rules that bar the disparagement of employees or defamation of the employer or its products or services.)
• Rules that regulate the use of the employer's name (as opposed to “lawful" rules that regulate the use of the employer's intellectual property.)
• Rules that restrict speaking to the media or third parties (as opposed to “lawful" rules that restrict speaking to the media on the employer's behalf.)
• Rules that ban off-duty conduct that might harm the employer (as opposed to “lawful" rules that ban insubordination and other disruptive conduct while at work.)
• Rules against making false or inaccurate statements (as opposed to “lawful" rules against making defamatory statements or misrepresenting the employer's products or services.)

Category 3 Policies that are Unlawful to Maintain because their negative impact on employee's protected rights cannot be outweighed by any employer justifications:

• Confidentiality rules about wages, benefits, and working conditions – The ability to freely discuss terms and conditions of employment is a cornerstone of the rights protected by the Act. There are no legitimate business justifications in banning employees from discussing wages or working conditions.
• Rules against joining outside organizations or voting on matters concerning the employer – Employees have a right to join outside organizations, specifically unions. While employers have a legitimate and substantial interest in preventing nepotism, fraud, self-dealing, and maintaining a financial interest in a competitor, rules that prohibit membership in outside organizations or from participation in any voting concerning the employer unduly infringe upon employee's protected rights.

Both the Boeing decision and the recent General Counsel Memorandum demonstrate an understanding that the prior standard applied by the Obama Board was overly broad and unduly burdensome on employer's operations. Although employers now have much greater flexibility in developing policies appropriate for their workplace, they must remember that the disciplinary application of any rule against an employee who is engaged in “protected" conduct may require the employer to demonstrate that the business justification for the rule was not only “legitimate" but also the “motivating reason" for applying the rule.

If you have questions about employment policies or other labor & employment questions, please feel free to contact Dave McClurg at (414) 223-6956 or dmcclurg@petriepettit.com.