Tag Archives: Section 7 rights

December 4, 2015

Court Upholds NLRB Ruling On Overly Broad Employment Policies

Gutierrez_SBy Steven M. Gutierrez 

The National Labor Relations Board (NLRB or Board) may feel emboldened after a recent ruling by the District of Columbia Circuit Court of Appeals, which upheld the Board’s decision that an employer’s policies on investigation confidentiality, electronic communications, and work hours were overly broad, potentially chilling employees’ rights to engage in protected concerted activities. As a result, employers should expect the further onslaught of NLRB attacks on seemingly neutral employment policies to continue, or worse, escalate.

NLRB’s Attack on Handbook Policies

In recent years, the Board has scrutinized many handbook policies, including those of non-union employers. As we’ve written in a past post, the NLRB attacks those policies that it believes interferes with, or chills, employees’ §7 rights to form labor organizations, bargain collectively, and engage in similar concerted activities. If the employer’s policy or rule would reasonably tend to chill employees in the exercise of their statutory rights, then the employer violates §8(a)(1) of the National Labor Relations Act, committing an unfair labor practice.

Analysis of Whether Policies Violate NLRA

The D.C. Court of Appeals set forth the proper analysis for determining whether an employment policy or work rule can amount to an unfair labor practice under the National Labor Relations Act (NLRA). Hyundai Am. Shipping Agency, Inc. v. NLRB, No. 11-1351 (D.C.Cir. Nov. 6, 2015). First, the Board must determine whether the policy explicitly restricts §7 rights, such as by restricting employees from discussing or forming a union. An explicit restriction on employees’ rights will invalidate the policy, amounting to an unfair labor practice.

In the absence of an explicit restriction on §7 rights, the Board must ask whether the rule:

  1. could be reasonably construed by employees to restrict §7 activity;
  2. was adopted in response to such activity; or
  3. has been used to restrict such activity.

If the answer is “yes” to any of these three questions, then the employer must show an adequate justification for the restrictive language to avoid it constituting an unfair labor practice.

Court Upholds Board Order On Three Policies

The Court reviewed the Board’s order regarding four policies maintained by employer Hyundai America Shipping Agency in its employee handbook, namely its policies on investigation confidentiality, electronic communications, work hours, and complaint provisions. Here is how the Court analyzed whether the Board correctly concluded that each of the policies was restrictive of employees’ §7 rights:

  • Investigative Confidentiality Rule: Hyundai had an oral rule that prohibited employees from discussing information about matters under investigation. The Court stated that “this blanket confidentiality rule clearly limited employees’ §7 rights to discuss their employment.” The Court then looked at whether Hyundai had offered a legitimate and substantial business justification for the rule that outweighed the adverse effect on its employees’ rights. While acknowledging that there may be a legitimate business justification for mandating confidentiality for particular types of investigations, such as sexual harassment investigations, the Court found that those concerns did not justify a ban on discussion of all investigations. Because the confidentiality rule was overly broad, the Court upheld the Board’s determination that it violated the NLRA.
  • Electronic Communications Rule: The electronic communications policy in Hyundai’s employee handbook stated that employees should only disclose information or messages from the company’s electronic communications systems to authorized persons. The Court stated that the key to determining the validity of this policy was whether the prohibition was limited to confidential information. Because Hyundai’s rule was not limited to the disclosure of confidential information, a reasonable reader could conclude that it applied to information about the terms and conditions of employment and therefore, it was overly broad and invalid.
  • Working Hours Rule: Hyundai maintained a handbook policy that allowed for employees to be disciplined, including termination, for “[p]erforming activities other than Company work during working hours.” Here, the key distinction is the use of the phrase “working hours” rather than “working time.” “Working time” excludes break periods so restrictions on union activity during working time is acceptable. On the other hand, “working hours” describes the period from the beginning of a shift to its end, including breaks. Because restrictions on union activity during working hours (sg., including break time) is presumptively invalid, the Court upheld the Board’s conclusion that Hyundai’s rule was invalid.
  • Complaint Provision: Hyundai’s handbook provided that employees should voice complaints directly to their immediate supervisor or to Human Resources, rather than complaining to fellow employees which would not resolve the problem. Although the Board had ruled this provision invalid, believing it prohibited employees from complaining about the terms or conditions of work among themselves, the Court disagreed. It stated that although the rule urged employees to voice complaints to a supervisor or to Human Resources, it was not mandatory, did not preclude alternative discussions, and did not provide penalties if an employee complained to fellow employees. Therefore, the Court found that the language would not be read to prohibit complaints protected by §7.

Court Rejects NLRB’s Investigation Confidentiality Rule Standard Affirmed in Banner Health

Interestingly, while discussing Hyundai’s investigation confidentiality rule, the Court rejected the ALJ’s opinion that in order to show a legitimate and substantial justification for an investigation confidentiality policy, the employer must determine whether any “investigation witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated and there is a need to prevent a cover up.” The NLRB had reaffirmed that standard in its widely cited Banner Health ruling on confidential investigation policies.

The D.C. Court of Appeals stated that it “need not and do[es] not endorse the ALJ’s novel view” on how employer’s must show a legitimate justification for an investigation confidentiality rule. The Court instead simply held that Hyundai’s confidentiality rule was “so broad and undifferentiated that the Board reasonably concluded that Hyundai did not present a legitimate business justification for it.”

Review and Narrow Your Policies

To help avoid NLRB scrutiny, review your employee handbook and other employment policies to determine whether any language could potentially chill employees’ §7 rights. If possible, narrow any restrictions that may infringe on employees’ rights and make certain that your organization can articulate a legitimate and substantial justification for your restrictions. Because these issues are continually evolving, discuss any questionable policy wording with your employment counsel.

Click here to print/email/pdf this article.

March 30, 2015

Drafting Employee Handbook Policies That Pass NLRB Muster

Mumaugh_B

By Brian Mumaugh 

All employers, union and non-union alike, should think about making a thorough review of their employee handbook and policies in light of a recent report on employer workplace rules by the National Labor Relations Board’s (NLRB’s) General Counsel, Richard Griffin. In his report, Griffin describes a variety of employment policies that the Board has found unlawful and offers the Board’s reasoning as to why. He also points out acceptable policies and explains what wording or context made that policy lawful. The bottom line: a single word or phrase can, in this Board’s view, make the difference between an acceptable policy or one that violates the National Labor Relations Act (NLRA). 

Overly Broad Handbook Policies Can Chill Employees’ Rights 

The Board has long taken the position that even neutrally worded employment policies can violate the NLRA if they have a chilling effect on the right of employees to engage in protected concerted activities. These activities, referred to as Section 7 activities, include discussing wages, benefits, and other terms and conditions of employment with other employees and with outside parties, such as government agencies, union representatives and the news media. 

In his March 18th Report, GC Griffin explains that the majority of policies found by the Board to violate the NLRA, were unlawful because employees could reasonably construe the language of the rule as prohibiting or infringing on Section 7 activities. Consequently, many well-intentioned, seemingly common-sense policies prove problematic for employers due to their possible interpretation as limiting an employee’s right to discuss their pay or working conditions with others.

Handbook Policies That Result in Violations 

The report sets out eight categories of work rules that frequently violate the NLRA and then distinguishes between unacceptable and acceptable language for such rules. The categories and the unlawful aspects of each may be summarized as follows: 

  • Confidentiality Policies: may not prohibit employees from discussing their wages, hours, workplace complaints or other personal information; prohibiting the disclosure of the company’s confidential information may be acceptable;
  • Employee Conduct Toward the Company and Supervisors: may not prohibit employees from engaging in negative, disrespectful or rude behavior or other conduct that may harm the company’s business or reputation; prohibiting employees from disparaging the company’s products, or requiring employees to be respectful to customers, vendors and competitors will typically be acceptable;
  • Conduct Toward Fellow Employees: may not prohibit “all” negative, derogatory, insulting or inappropriate comments between employees as that may interfere with the employees’ right to argue and debate with each other about management, unions and the terms and conditions of their employment; requiring employees to treat each other professionally and with respect as well as banning harassing and discriminatory conduct will typically be lawful;
  • Interactions with Third Parties: may not completely ban employees from talking to the media or government agencies; a policy noting that employees are not authorized to speak on behalf of the company without authorization may be considered lawful;
  • Restricting the Use of Company Logos, Copyrights and Trademarks: may not prohibit all use of company logos and intellectual property because the NLRB upholds employees’ right to use company names, logos and trademarks on picket signs, leaflets and other protest materials; policies that require employees to respect all copyright and intellectual property laws is acceptable;
  • Restricting Photos and Recordings: may not ban employees from taking pictures or making recordings on company property; a policy may limit the scope of such a prohibition depending on a competing protective right (such as a healthcare facility protecting patient privacy by limiting photos of patients);
  • Restrictions on Leaving Work: because employees have the right to go on strike, a policy that prohibits employees from “walking off the job” will be unlawful; policies stating that failure to report for a scheduled shift or leaving early without permission as grounds for discipline may be acceptable; and
  • Conflict-of-Interest Policies: policy may not ban any activity “that is not in the company’s best interest;” policies that give examples of what constitutes a conflict-of-interest, such as having a financial or ownership interest in a customer, supplier or competitor, or exploiting one’s position for personal gain will likely be lawful. 

Few Bright Lines for Lawful Policies 

The report goes on to offer analysis of additional policies dealing with topics such as handbook disclosure, social media and employee conduct related to a particular employer who agreed to revise their policies as part of a settlement agreement with the NLRB. You may have similar policies in your handbook, making it worthwhile to read what policy language the Board considers problematic and what may pass muster. The takeaway, however, is that the lawfulness of many policies may turn on a single word or phrase.  At the present time, it is unclear whether GC Griffin’s report will withstand legal challenge.  The best advice is that given the report and its contents, it is important to take time to review your handbook and compare your wording to the examples provided in the report. Although the report is not a legally binding interpretation of the NLRA, it can help you make an informed decision about the risks involved in including certain provisions in your employee handbook.

Click here to print/email/pdf this article.