The NLRB Handbook Ruling: Extents and Limitations

A.  The NLRB Handbook Decision: The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017

On December 14, 2017, the National Labor Relations Board (NLRB) issued a decision that overturned thirteen years of precedent that had allowed handbook and work rules to be challenged on the basis that they could be interpreted to affect employee’s rights to engage in “concerted activity” under section 7 of the National Labor Relations Act (NLRA).  In its place, the Board adopted a balancing test that balanced an employee’s rights to take protected concerted action under Section 7 of the NLRB against the employer’s right to maintain discipline and productivity in the workplace

The previous case, a portion of which was overruled, was Lutheran Heritage Village – Livonia, 343 NLRB 646 (2004).  The case will be discussed below, as a portion of it still remains the standard.

On June 6, 2018, General Counsel for the NLRB issued guidance in Memorandum GC 18-04 that put handbook and work rules into three (3) categories:

1. Rules that are Generally Lawful;
2. Rules that are subject to further Scrutiny (balancing of employee’s and employer’s interests); and
3. Rules that are Unlawful to Maintain

We will discuss former standard under Lutheran Heritage Village- Livonia to understand the impact of the Boeing decision and General Counsel’s memorandum as it relates to handbook and work rules.  We will also discuss section 7 rights and the right of employees to take “protected concerted action.

B.  Recognizing Protected Concerted Activity in the Workplace

1. Section 7: Protection of “Concerted Activity”

Whether an employer has labor unions or not, if an employer is subject to the National Labor Relations Act its employees receive protection against discipline and discharge for their right to engage in “concerted activities”; i.e. the employees’ right to join together with each other to seek, among other things, different terms and conditions of employment, improvement of work conditions, and protection against discharge or termination.

The National Labor Relations Act (NLRA)^[1] protects the rights of employees to act together to address conditions at work, with or without a union.  Thus, employers without unions are subject to the NLRA.  An employer’s failure to comply may result in charges of unfair labor practices for policies, litigation before the National Labor Relations Board (NLRB) and in the federal courts, and the undoing of discipline based on the non-compliant policy (including reinstatement of discharged employees with backpay).

Section 7^[2] of the NLRA provides the basic protection for employees acting together (and for which the employees may not be disciplined).  Section 7 provides:

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.

Emphasis added.

C.  Interfering or Restraining Employees From Engaging in NLRA Rights

1.  Communications between employees and communications to the public.

The protection of concerted activities extends to certain, but not all, work-related conversations between employees, including those conducted on social media, such as Facebook, Twitter, Pinterest, Snap Chat, and similar social media websites.

In addition, Section 7 protection extends to “communications to the public that are part of and related to an ongoing labor dispute.”^[3]  Such protected communications include Facebook posts about group concerns which have been raised with the employer.

However, merely posting employee complaints to social media sites does not automatically give such postings protected status.  An employee’s personal and individual gripes or expressions of frustration with working conditions will likely not be considered as protected activity.  ^[4]

2.  Balance against employer’s needs (legitimate interests)

Under NLRB decisions, the right of employees to engage in “concerted activities” is balanced against legitimate employer rights — which include the employer’s property rights and the need for workplace order and discipline.^[5]

3.  When communications are protected.

As a general rule, to be protected, an employee’s communications to other employees or the public must:

• Relate to terms and conditions of employment; or
• Seek to initiate or induce group action; or
• Intend or expect that third parties will take action affecting the employment situation.

This general rule comes from the definition of “concerted action” contained in the Meyers Industries case and guidance from the General Counsel of the NLRB.

4.  Meyers Industries

In a 1986 decision, Meyers Industries^[6], the National Labor Relations Board (Board), found activity to be “concerted” if the conduct is “engaged in, with, or on authority of other employees, and not solely by or on behalf of the employee himself.”^[7]

The Board defined “concerted activities” as:

encompass[ing] those circumstances where individual employees seek to initiate or to induce or to prepare for group action, as well as individual employees bringing truly group complaints to the attention of management.

Emphasis added.

D.  When do Handbooks Limit Protected, Concerted Activity?

a.  Facial challenges – violations for overbroad policies, even before discipline

The Boeing decision changed the rule that handbook and work policies could be (facially) challenged under Section 7 even before the employer attempts to enforce the policy.^[8]  In other words, an overbroad policy, even without enforcement action through employee discipline, could formerly result in a charge and a finding of an unfair labor practice.

1)  Lutheran Heritage Village – Livonia^[9].

In 2004, the Board had set out a three prong analysis to determine if a policy is overbroad and unlawfully restrictive of section 7 protected concerted activities.  Boeing changed the first prong of the standard.  The original analysis (until 2018) was as follows:

Our inquiry into whether the maintenance of a challenged rule is unlawful begins with the issue of whether the rule explicitly restricts activities protected by Section 7.  If it does, we will find the rule unlawful.  If the rule does not explicitly restrict activity restricted by Section 7 the violation is dependent upon a showing of one of the following:

 

• employees could reasonably construe the language to prohibit Section 7 activity;
• the rule was promulgated in response to union activity; or
• the rule has been applied to restrict the exercise of Section 7 rights.

b.  The three-pronged analysis of Handbook provisions.

Thus, the NLRB took a three-pronged analysis of handbook provisions:  First, it analyzed whether employees could interpret a handbook provision to prohibit Section 7 activity.  In general, any rule that could be interpreted to prohibit criticism of management or supervisors would be found to be illegal.  Boeing changed this prong to require a balancing test.  However, left intact were the second and third prongs.  Under the second prong, the Board will analyze the facts and circumstances surrounding the promulgation of handbook rule.  If the rule was promulgated to in response to union activity; e.g., a petition to seek an election for the employees to have a union, it will be closely scrutinized.  Under the third prong (also left intact) The Board will consider the rule as applied by the employer if the rule does not, on its face, violate Section 7.  Did the employer apply the rule to restrict Section 7 rights.  For example, did the employer use the rule to discipline or terminate employees for criticizing management or supervisors or to prevent a petition for a vote on whether there should be a union.

E.  Category 1. Rules that are Generally Lawful to Maintain.

Category 1 rules are rules which the NLRB now finds “facially” lawful because a reasonable interpretation does not prohibit or interfere with Section 7 rights or because the business justification outweighs the potential adverse impact on Section 7 rights.

Please note, rules in this Category 1 will pass the first test of being facially lawful; however, the rule must also pass the next two tests as well: was the rule promulgated in in response to union activity and was the rule applied to restrict Section 7 rights?

1.  Civility Rules.

The following examples from cases considered by the NLRB are facially lawful civility rules:

• “Conduct . . . that is inappropriate or detrimental to patient care or Hospital operation or that impedes harmonious interactions and relationships will not be tolerated.”
• “Behavior that is rude, condescending or otherwise socially unacceptable” is prohibited.
• Employees may not make “negative or disparaging comments about the . . . professional capabilities of an employee or physician to employees, physicians, patients, or visitors.”
• “Disparaging . . . the company’s . . . employees” is prohibited.”
• Rude, discourteous or unbusinesslike behavior is forbidden.
• Disparaging, or offensive language is prohibited.
• Employees may not post any statements, photographs, video or audio that reasonably could be viewed as disparaging to employees.”

2.  No Photography Rules and No Recording Rules.

• “[U]se of [camera-enabled devices] to capture images or video is prohibited . . .”
• Employees may not “record conversations, phone calls, images or company meetings with any recording device” without prior approval.
• Employees may not record telephone or other conversation they have with their coworker, managers or third parties unless such recordings are approved in advance.

3.  Rules Against Insubordination, Non-cooperation, or On-the-Job Conduct that Adversely Affects Operations.

• “Being uncooperative with supervisors . . . or otherwise engaging in conduct that does not support the [Employer’s] goals and objectives” is prohibited.
• “Insubordination to a manager or lack of . . . cooperation with fellow employees or guests” is prohibited.

4.  Disruptive Behavior Rules.

• “Boisterous and other disruptive conduct is prohibited.”
• Creating a disturbance on Company premises or creating discord with clients or fellow employees.
• Disorderly conduct on Hospital premises and/or during working hours for any reason is strictly prohibited.

5.  Rules Protecting Confidential, Proprietary, and Customer Information or Documents.

• “[I]nformation concerning customers . . . shall not be disclosed, directly or indirectly” or “used in any way.”
• Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding business partners, vendor, or customers.
• “Divulging Hotel-private information to employees or other individuals” is prohibited.
• No unauthorized disclosure of business secrets or other confidential information.

6.  Rules against Defamation or Misrepresentation.

• “[M]isrepresenting the company’s products or services or its employees” is prohibited.
• Do not email messages that are defamatory.

7.  Rules Against Using Employer Logos or intellectual Property.

• Employees are forbidden from using the Company’s logos for any reason.
• “Do not use any Company logo, trademark, or graphic [without] prior written approval.”

8.  Rules Requiring Authorization to Speak for Company.

• The company will respond to media requests for the company’s position only through the designated spokespersons.
• Employees are not authorized to comment for the Employer.

9.  Rules Banning Disloyalty, Nepotism, or Self-enrichment.

• Employees may not engage in conduct that is “disloyal . . . competitive, or damaging to the company” such as “illegal acts in restraint of trade” or “employment with another employer.”
• Employees are banned from activities or investments . . . that compete with the Company, interferes with one’s judgment concerning the Company’s best interests, or exploits one’s position with the Company for personal gain.

F.  Category 2: Rules Warranting Individualized Scrutiny.

Category 2 Rules are those rules which are not facially legal or facially illegal.  The legality of these rules will have to be interpreted in light of the context of the rules.  Initially, the inquiry should be: How would an employee interpret the rule?  Other factor used in determining legality are:

1. The placement of the rule among other rules in the Handbook;
2. The examples provided in the handbook to illustrate when the rule applies;
3. The type and character of the workplace; and
4. Whether the rule has actually caused employees to refrain from engaging in Section 7 “protected concerted activity

Examples of rules that need individualized scrutiny (pending further case guidance from the NLRB) are the following:

• Broad conflict-of-interest rules that do not specifically target fraud and self-enrichment and do not restrict membership in, or voting for, a union;
• Confidentiality rules broadly encompassing “employer business” or “employee information” (as opposed to confidentiality rules regarding customer or proprietary information or confidentiality rules more specifically directed at employee wages, terms of employment, or working conditions;
• Rules regarding disparagement or criticism of the employer (as opposed to civility rules regarding disparagement of employees;
• Rules regulating use of the employer’s name (as opposed to rules regulating use of the employer’s logo/trademark;
• Rules generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf;
• Rules banning off-duty conduct that might harm the employer (as opposed to rules banning insubordinate or disruptive conduct at work;
• Rules specifically banning participation in outside organizations;
• Rules against making false or inaccurate statements (as opposed to rules against making defamatory statements.

G.  Category 3: Rules that are Unlawful to Maintain.

Category 3 Rules are rules that are facially unlawful under the NLRB because they unduly restrict employee’s Section 7 rights to “protected concerted activity.”  These rules will result in charges against the employer of unfair labor practices, as well as, likely findings of unfair labor practices.

1.  Confidentiality Rules Specifically Regarding Wages, Benefits, or Working Conditions;.

• Employees are prohibited from disclosing “salaries, contents of employment contracts . . . .”
• Employees shall not disclose “any information pertaining to the wages, commissions, performance, or identity of employees of the Employer.”
• Employees are prohibited from disclosing to “any media source” information “regarding employment at [Employer], the workings and conditions of [Employer], or any . . . staff member.”

2.  Rules Against Joining Outside Organizations or Voting on Matters Concerning Employer

Where an employer’s conflict-of-interest policy includes a rule that would be interpreted as restricting membership or work for a union, it would naturally cause more timid employees to refrain from such activity.  Employees may be more reluctant to go to meetings, sign authorization cards, or join employee committees.

• a rule banning membership in an outside organization that might interfere with work was unlawful, since employees would readily understand such a rule to apply to unions.
• a rule requiring employees to remove themselves from discussing or voting on any matters concerning the employer is also unlawful as bans or other limitations on membership in, or work for, outside organizations that would be interpreted as covering unions will always be unlawful.

H.  Final Recommendation for Employers.

Whenever an issue arises regarding a Category 2 or Category 3 rule, it is recommended that both the General Counsel’s Memorandum 18-04 be consulted, as well as recent decisions of the NLRB regarding Handbook Rules.  In addition, an Employer (and their counsel) must remember that only one prong of the Lutheran Heritage Village – Livonia case was overruled.  Still intact are the second and third prongs: was the rule promulgated to respond to Union activity and did the employer apply the rule to discourage of prohibit Section 7 “protected concerted activity?

 

Donald C. Erickson

Senior Counsel

FRYBERGER, BUCHANAN, SMITH & FREDERICK, P.A.

302 West Superior Street, Suite 700

Duluth, MN 55802

218.725.6852 (direct)

218.625.9252 (private E-Fax)

218.391.0145 (mobile

derickson@fryberger.com

 

[1] 29 U.S.C. § 151-169

[2] 29 U.S.C. Sec. 157

[3] Butler Med. Transp., LLC, Case No. 5-CA-97811, 2013 WL 4761153.

[4]

[5] See, e.g., Republic Aviation Corp. v. NLRB, 324 U.S. 793 @ 797-98 (1945)

[6] 281 N.L.R.B. 882 (1986), af’fd. sub. nom. Prill v. NLRB, 835 F.2d 1481 (D.C. Cir. 1987) cert. denied, 487 U.S. 1205 (1988)

[7] Id. at 885.

[8] See, e.g., Williamette Indus. Inc., 306 N.L.R.B. 1010 @ 1017 (1992)

[9] 343 N.L.R.B. 646 (2004)