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Recent NLRB developments on the employee handbook front

May 15th, 2014  |  Lisa Milam

By Lisa Milam-Perez, J.D.

Union and nonunion employers alike have had to keep a watchful eye on the NLRB in recent years. The agency has begun to forage on new turf — the ubiquitous employee handbook — as it seeks to unearth violations of employees’ protected rights under the NLRA. The Board has challenged a number of common handbook provisions, resulting in disparate holdings even under quite similar facts, and leaving confusion and consternation in its wake. Here’s a look at the latest developments on that front.

ALJ ignores GC. In late April, an NLRB law judge struck down a communications policy embodied in Kroger Co. of Michigan’s handbook. The challenged provision required employees, whenever they published “work-related information” online and identified themselves as Kroger employees, to include a disclaimer stating “the postings on this site are my own and do not necessarily represent the postings, strategies, or opinion of the Kroger Co. family of stores.” According to the ALJ, this requirement was a tedious enough burden on employees that it would dissuade them from exercising their protected statutory rights online. It was overbroad, the ALJ said, in that it applied to all manner of online communications in which work-related information was discussed, including Facebook postings.

Unfortunately for Kroger, it mattered little that, in drafting its policy, the company used language that was approved by the NLRB acting general counsel Lafe Solomon in a 2012 report on social media cases. The ALJ was unpersuaded by the GC guidance (which lacked precedential value). The ALJ also rejected Kroger’s argument that another regional director had settled charges against an employer by allowing it to maintain a policy nearly identical to the one here. “It simply does not matter what position a Regional Director took in a different case three years ago in order to settle that case,” the law judge said.

In another recent decision, an ALJ invalidated several overly broad handbook rules and found the employer’s attempt to repudiate them was insufficient. One faulty provision was an “inappropriate conduct” rule that barred disclosure of confidential company, customer, and employee information, including confidential information maintained in personnel files. This clause would lead employees to reasonably believe they were restricted from being openly critical of the employer’s treatment of its workers and from discussing wages, benefits, and related information with coworkers or union reps, the ALJ found.

Another rule directed employees to refrain from posting certain information and comments on the Internet. It was not restricted to confidential or even company information; it didn’t distinguish between protecting information about customers or company business (restrictions that would conceivably be lawful) and the sharing of other information; and thus it was inherently overbroad. Also problematic: It prohibited the posting of any information without the company’s prior approval.

Division of Advice OK’s at-will statements. The Division of Advice found nothing unlawful in a handbook provision that prohibited anyone other than the company’s senior vice president from modifying employees’ at-will employment status, or its express statement that “[n]o statement, act, series of events or pattern of conduct can change this at-will [employment] relationship.” The employees would not reasonably construe the policy to prohibit Sec. 7 activity, according to a recent advice memo. Taken in context, it was clear the at-will statement wasn’t aimed at employees’ protected conduct under the Act but rather, was meant to guard against lawsuits based on the contention that the handbook was an enforceable employment contract, according to the Division of Advice. Therefore, the clause did not conflict with potential attempts by employees to unionize.

This latest directive was good news for employers in light of ongoing concerns in recent years that the Board was levying a direct attack on at-will employment clauses. The controversy first erupted in February 2012, when a regional director filed a complaint contending that an at-will provision maintained by the Hyatt Hotels violated Sec. 7 rights. The problem, according to the complaint, was that employees had to acknowledge receipt of the provision, which essentially forced them to affirm that their at-will status could not be changed — leading them to reasonably believe they could never unionize. The at-will policy in question here, though, did not require employees to effectively waive their right to participate in future Section 7 activity.

Since that time, the General Counsel’s office has issued advice memoranda on several at-will employment clauses, deeming them lawful, and ALJs have considered and condoned numerous at-will provisions brought before them. The agency’s position (once seen as murky, at best, and as “a ruse” by at least one management lawyer) appears to have crystallized: At-will provisions are lawful as long as they don’t require employees to acknowledge their at-will status is unchangeable (and, consequently, that efforts to unionize thus would be futile). It should be noted, though, that in a February 2014 directive to regional directors, the General Counsel’s office mandated that all cases involving at-will provisions in employer handbooks must be submitted to the Division of Advice (unless they are otherwise resolved through extant advice memoranda) — signaling that careful scrutiny of such provisions may continue.

Board rejects numerous handbook policies. The fervor surrounding the NLRB’s scrutiny of employee handbooks arose while the agency was hampered by challenges to the legitimacy of Board members’ (and, to a lesser extent, the acting general counsel’s) appointments. Thus, the NLRB’s jurisprudence on the issue could be readily called into question. However, the Senate-sanctioned, five-member NLRB has now begun to field handbook cases that have percolated up from the regions, and its members have recently found a number of provisions unlawful on their face:

• A “standards of behavior” policy prohibiting “negative comment about our fellow team members” (including managers) and engaging in “negativity or gossip,” and requiring employees to “represent [the Respondent] in the community in a positive and professional manner in every opportunity” (Hills and Dales General Hospital);
• A bus company’s rules barring disclosure of “any company information,” including wage and benefit information; prohibiting employees from making statements about work-related accidents to anyone but the police or company management; prohibiting “false statements” about the company; barring participation in outside activities that would be “detrimental” to the company’s image, “discourteous or inappropriate attitude or behavior to passengers, coworkers, or the public,” and prohibiting employees from engaging in “disorderly conduct during working hours” (First Transit, Inc);
• A social media policy in an employee handbook which required that employees’ contacts with parents, school representatives, and school officials be “appropriate,” and also included a provision subjecting employees to potential discipline for publicly sharing “unfavorable” information “related to the company or any of its employees” (Durham School Services).

In addition, an employer last month agreed to rescind its nationwide social media policy to resolve an NLRB complaint alleging the policy interfered with employees’ rights to discuss terms and conditions of employment on social media. Under the terms of its settlement with the Board, the employer will mail notices advising employees that they will not be prohibited from using social media to discuss their terms and conditions of employment.

Board’s handbook approach condoned. Finally, the NLRB recently secured a ruling from the Fifth Circuit enforcing its order which found a nonunion employer had unlawfully maintained an overly broad confidentiality rule that barred discussions of “personnel information” outside the company. The rule would in effect, if not expressly, prohibit employees from discussing wage information, thus chilling their protected rights. The very existence of the provision was violation enough, the appeals court agreed, even absent evidence of enforcement.

Thus, the circuit court that had slapped the NLRB’s wrist in D.R. Horton, Inc v NLRB as the agency moved to invalidate employers’ mandatory arbitration agreements gave its seal of approval to the Board’s rejection of a nonunion company’s handbook rule in what, incidentally, had been a divided decision below. In fact, in his dissent, Member Hayes noted that the D.C. Circuit has been “particularly critical” of the Board’s failure to give a fair reading to employers’ confidentiality rules in their entirety and predicted that, were the case to go up before that court on review, “it will likely suffer the same rebuke.” The Fifth Circuit saw it differently, however.

Drafting tips for the wary. Where does this leave employers as they strive to fashion workable handbook policies that can survive NLRB scrutiny while simultaneously meeting the organization’s business needs? While it can be difficult to reconcile the various holdings in recent years, a few instructive principles emerge:
Context matters. As former Member Hayes noted, a particular handbook provision cannot be read in isolation, and the agency’s rulings are rife with examples of this principle in action. However, there is little sympathy for the “in context” defense if it would expect an employee to reconcile clauses, “when read together,” from far-flung pages of the handbook. An employer won’t fare well with claims that a broad confidentiality rule on page 3 is meant to apply only to a provision on protecting intellectual property discussed on page 16. If a particular policy must be placed in a remote location from its “context,” clearly reference and cite to the relevant provision that purportedly informs the intended meaning.
Prior restraint is a no-no. A general rule requiring employees to request permission before posting online communications constitutes unlawful interference. As Kroger Co. learned, a seemingly innocuous requirement (such as a straightforward disclaimer) may be seen as unduly cumbersome for employees in the eyes of a law judge.
“Ambiguous” equals “overbroad.” While ambiguous terms are often used to afford some wiggle room in enforcing a handbook rule, “ambiguity” often equals “overbroad” in the NLRB’s perusing eyes. Provide specific examples of the conduct that a particular rule is intended to proscribe (stressing, of course, that the examples are illustrative and not exhaustive). Extra points are awarded for noting exceptions — e.g., a statement that your confidentiality rule “is not intended to prohibit employees from discussing wages or any other specific terms and conditions of employment.”
Take “advice” with a grain of salt. As the Kroger Co case above makes clear, reliance on the General Counsel’s guidance when drafting handbook provisions isn’t foolproof.
No harbor is safe. The NLRB undoubtedly has sent mixed messages in the past on the utility of including safe-harbor provisions in employee handbooks. A savings clause, in theory, should shield your organization from Board charges, provided it makes clear to employees that you have no intention of interfering with their Sec. 7 rights. But such a provision must be drafted with care. One challenged handbook included a “freedom of association” policy expressly stating that management supported the right of employees to vote for or against union representation, without interference. But the provision “focused solely on union organizational rights,” the Board lamented, striking the clause because it failed to address “the broad panoply of rights protected by Section 7.” Truth be told, though, it’s not certain that even the most artfully drafted clause will have its intended prophylactic effect.

Facing a handbook charge? Finally, a few points to keep in mind when confronted with an NLRB enforcement action over an employee handbook provision:
Repudiate like you mean it. The NLRB expects employers to be emphatic when attempting to repudiate a problematic handbook policy. Quietly stripping the offending provision isn’t likely to placate the agency in enforcement proceedings. An employer must be timely and unambiguous in disclaiming the improper language, and upfront in notifying employees of the change.
“Tend to chill” is the test. An argument that none of your employees have actually interpreted your handbook provision as restricting their rights under the NLRA will be dead on arrival. Alas, that’s the frustrating nature of grappling with the NLRB. But the test is whether your handbook rule theoretically “would reasonably tend to chill” employees in the exercise of their rights, not whether it’s actually done so.
The rule’s the thing. Similarly, whether your organization has actually enforced a challenged handbook provision in a discriminatory or heavy-handed manner is irrelevant. Again, the “reasonably tend to chill” test applies. There need not be an aggrieved employee for the Board to take issue with the rule on its face.
Your case is unprecedented. Handbook cases remain relatively uncharted territory, and the Board’s law judges and regional directors are reaching independent decisions on a fairly blank slate. Don’t stake your litigation strategy on the presumption that your (arguably) identical facts will result in a similar outcome.
It ain’t over til it’s over. Employee handbook complaints typically arise in relation to an employee’s (or union’s) filing of an unfair labor practice complaint — very often in response to an unrelated gripe, at which point the agency will ask to see your handbook. So even if you manage to peacefully resolve the underlying dispute with your employee, that doesn’t mean you’ve squared things with the Board.