In yet another decision limiting an employer’s right to establish reasonable rules of conduct in the workplace, an Administrative Law Judge (“ALJ”) of the National Labor Relations Board (“NLRB” or “Board”) declared 10 different employee handbook sections to be illegal under the National Labor Relations Act (“NLRA” or the “Act”) because they could be read to chill employees’ rights to engage in protected concerted activity. Verizon Wireless and Communications Workers of America, AFL-CIO, Case Nos. 02-CA-157403, 02-CA-156761, 02-CA-156043, 02-CA-156053 and 02-CA-161472 (May 25, 2017).

In Verizon Wireless, the Communication Workers of America (“CWA” or the Union”) filed unfair labor practice charges (“ULPs”) against Verizon alleging that it violated the NLRA by establishing and maintaining various rules in its Code of Conduct employee manual at its stores which “interfere with, restrain and coerce employees in the exercise of their Section 7 rights in violation of Section 8(a)(1) of the Act.”

Under Section 8(a)(1) of the Act, it is unlawful for an employer to interfere with, restrain or coerce employees in the exercise of their Section 7 rights. The Board has held that, “[a]n employer violates Section 8(a)(1) of the Act when it maintains a work rule that reasonably tends to chill employees in the exercise of their Section 7 rights.” Hyundai America Shipping Agency, 357 NLRB 860, 861 (2011), enfd. in relevant part, 805 F.3d 309 (D.C. Cir. 2015). Where this is the case, maintenance of the rule may be deemed unlawful even absent any evidence of enforcement. Lafayette Park Hotel, 326 NLRB 824, 825 (1998), enfd. 203 F.3d 52 (D.C. Cir. 1999).

The Board, in its seminal case on the subject, Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) instructed that if a rule does not explicitly restrict activity protected by Section 7, the violation is dependent upon a showing that (1) employees would reasonably construe it to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been used to restrict the exercise of Section 7 right. The Board has cautioned against “reading particular phrases in isolation,” and will not find a violation simply because a rule could conceivably be read to restrict Section 7 activity.

Thus, in Verizon Wireless, the ALJ found illegal at least 10 different rules including rules: (1) barring employees from using company resources, including “emails, fax machines [and] computers” to solicit or distribute information; (2) prohibiting employees from discussing Verizon Wireless with outside organizations or associations; (3) blocking employees from using company systems in a way “directed to a group of employees inside the company on behalf of an outside organization;” (4) forbidding employees from disclosing employee records; (5) prohibiting employees from disparaging company products, services or employees; (6) allowing Verizon to monitor and search employees’ vehicles; (7) barring employees from recording at work without management authorization; (8) requiring employees to report suspected and actual violations of this Code, company policy and the law; (9) blocking current and former employees from disclosing nonpublic company financial information without permission; and (10) stating that the Code of Conduct can be changed by the employer without notice.

The ALJ offered rationales for holding that these rules violate the Act that, in fact, betray a certain paternalistic cynicism about the intelligence of employees and the motivations of employers in the modern workplace, often couching her holdings in terms of an ambiguity that simply does not exist in real life.

The decision in Verizon is just another in a long line of cases in which the Board or an ALJ strikes down useful and reasonable rules of conduct in an effort to extend its jurisdiction. For example, the Board has punished employers for asking employees to be courteous, respectful and not to post defamatory comments on the internet. See Karl Knauz Motors, Inc., 358 NLRB 1754 (September 28, 2012) and Costco Wholesale Corp., 358 NLRB 1100 (September 7, 2012). Employee disclaimers have also come under fire. In American Red Cross Arizona Blood Services Region, Case 28-CA-23443, 2012 WL 311334 (February 1, 2012), an NLRB ALJ found that an employer violated the Act by maintaining the following language in an acknowledgement form employees were required to sign: "I further agree that the at-will employment relationship cannot be amended, modified or altered in any way." Even confidentiality agreements defining confidential information to include "personnel information and documents" have been found to be illegal. Lily Transp. Corp., 362 NLRB No. 54 (March 30, 2015); Tinley Park Hotel & Convention Ctr., LLC, 13-CA-141609, 2015 WL 3759559 (June 16, 2015).

The Bottom Line

The Board continues to strike down seemingly innocuous rules and policies in both the union and non-union environments, stating that these rules “might” discourage an employee’s right to engage in concerted protected activity. No showing that the rules actually chilled an employee’s protected rights or were even enforced is necessary. Therefore, it is absolutely vital that employers review and, where necessary, revise their handbooks to ensure compliance with the NLRA.