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No-recording policy remains lawful though applied in unlawful manner

By Ronald Miller, J.D.

Applying a rule or policy to restrict the exercise of Section 7 rights is an unfair labor practice, but it should not make the rule thus applied unlawful to maintain.

In a four-member decision, a divided NLRB, in a 3-1 ruling, ruled that an employer’s lawful no-recording policy did not become unlawful on the basis that it was applied to restrict an employee’s protected union activity. The Board reversed an administrative law judge’s finding that an employer’s maintenance of the no-recording policy violated Section 8(a)(1). Still, the Board concluded that the employer acted unlawfully by threatening a union steward that his refusal to comply with the no-recording rule would result in unspecified reprisals. In so ruling, the Board overruled the “applied to restrict” standard of prong three of Lutheran Heritage. Chairman McFerran filed a separate opinion concurring in part and dissenting in part (AT&T Mobility, LLC, May 3, 2021).

No-recording policy. The employer maintains a Privacy in the Workplace Policy. That policy, in part, prohibits employees from recording telephone or other conversations they have with their coworkers, managers or third parties unless such recordings are approved in advance by the Legal Department, required by the needs of the business, and fully comply with the law and any applicable company policy.

The employee served as a union steward at five of the employer’s stores. A coworker sought the employee’s assistance to file a grievance alleging that the employer had targeted him for discipline or termination. The employer accompanied the coworker to a meeting where the employer presented the coworker with a termination notice. The employee recorded the meeting on both his company and personal cell phones.

The manager of the store where the coworker had worked suspected that the employee had recorded the meeting and contacted his superior to retrieve the employee’s company cell phone, delete the recording, and administer a coaching. When the employee returned to his store, his store manager deleted the recording and later administered a coaching. The following day, the employee met with the Area Sales Manager who told him that recording conversations violated company policy. He also stated that he “did not want anyone held accountable for not following policy.”

Privacy interests. The ALJ found that the policy was unlawful under Boeing Co. While the ALJ acknowledged that the policy served “pervasive and compelling” employer interests in safeguarding customers’ personal information and the content of customer communications, he found those interests were outweighed by the policy’s potential to interfere with important Section 7 rights to record and preserve evidence of unfair labor practices. According to the ALJ, the employer could protect its privacy interest through a narrower rule. Moreover, he concluded that the employer unlawfully threatened the employee with discipline or discharge under the unlawful policy.

Lawfulness of policy. However, the Board found that the policy was a lawful Category 1(b) rule under Boeing. On the other hand, it concluded that the employer violated Section 8(a)(1) when the Area Sales Manager unlawfully applied the rule by threatening the employee that a refusal to comply with the rule would result in unspecified reprisals.

In finding that the no-recording policy was lawful under Boeing, the Board noted that it found that no-camera rules as a type and no-recording rules as a type belong in Category 1(b) and were lawful. Like the lawful rules in Boeing, Flagstaff Medical Center, 357 NLRB 659 (2011), and Rio All-Suites Hotel & Casino, the policy had a comparatively slight impact on employees’ Section 7 rights. Although it may prevent recording of some protected conversations, the vast majority of conversations covered by the policy bear no relation to Section 7 activity. Moreover, employees remain free to speak to each other about working conditions or other protected Section 7 topics, despite the employer’s prohibition on recording those conversations.

On the other side of the balance, the employer had strong business justifications for maintaining the policy that outweigh its potential adverse impact on employees’ Section 7 rights. It has a duty under federal law to safeguard customer information and the content of customer communications. Accordingly, the Board found that the employer’s no-recording policy was a lawful work rule, appropriately placed into Boeing Category 1(b).

Employer threats. The Board next turned to consider whether the employee was engaged in protected union activity when he recorded the termination meeting, and if so, whether the employer unlawfully applied the policy by threatening him with being “held accountable” for any future violations of the rule. The employer argued that the lawfulness of the rule foreclosed this inquiry.

The Board disagreed, concluding that whether an employee engaged in protected activity by making a workplace recording depended on the facts and circumstances of the particular case. Here, it was clear that the employee was acting in his capacity as union steward when he attended and recorded the termination meeting—he was policing the parties’ CBA and preserving evidence for use in a possible grievance. Moreover, the meeting he recorded was held for the sole purpose of effecting a discharge decision that had already been made, and the employer did not contend that private customer information was or was likely to be mentioned during the meeting.

Accordingly, there was no evidence that the recording implicated the statutory or regulatory requirements on which the no-recording policy was based. Under these particular circumstances, the Board found that the employee was engaged in protected union activity when he recorded the termination meeting, even though his act of recording contravened a lawful workplace rule.

Further, the Board found that the employer unlawfully applied the policy because the employee’s sole act of “not following policy” was protected by Section 7. Thus, the Area Sales Manager’s application of the rule amounted to a threat that some unspecified adverse action would be taken against the employee if he were again to engage in protected union recording activity.

“Applied to restrict” standard. Next, the Board considered whether the policy became unlawful to maintain based on its application. Prong three of the Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) states that a rule that has been applied to restrict the exercise of Section 7 rights cannot be lawfully maintained. Here, the Board noted that the Lutheran Board did not explain why any instance of unlawful application of a facially lawful rule automatically warrants a finding that the rule can no longer be lawfully maintained.

In this instance, the Board determined that the Lutheran Heritage’s “applied to restrict” standard ignored the legitimate and often compelling interests an employer has in being able to continue to maintain a lawful rule. A blanket prohibition on the continued maintenance of such rules, simply because of a single instance of unlawful application fails to give proper weight to those legitimate interests. Accordingly, to the extent that Lutheran Heritage and cases applying prong three of the Lutheran framework are to the contrary, they were overruled.

Dissenting in part and concurring in part. While Chairman McFerran agreed with the majority that the employer unlawfully applied its no-recording rule, she would further find that the rule was unlawfully overbroad. McFerran argued that the majority erred in upholding the no-recording rule, which she asserted was clearly unlawful under pre-Boeing, judicially endorsed Board precedent. She was further troubled by the majority’s refusal to order the employer to rescind the rule, leaving it in place to chill employees’ exercise of their statutory rights in the future.