Why it matters

Continuing its focus on employee handbook policies, a divided panel of the National Labor Relations Board (NLRB) ruled that a dress code policy violated Section 8(a)(1) of the National Labor Relations Act (NLRA) because it interfered with the Section 7 rights of employees at a Honda dealership in Massachusetts. The policy—which prohibited employees from wearing insignias and “message clothing” if they interacted with the public—was overly broad, as was a ban on workers wearing pins, a majority of the panel determined. The dealership instituted the policy in a 2010 employee handbook and the provisions became the subject of a charge by the worker’s union. An administrative law judge held the dress code provision was overbroad but upheld the prohibition on pins, finding that it was justified for safety reasons. But in a 2 to 1 decision, the panel said both the pin ban and the dress code policy were unlawful. For employers, the case reiterates the Board’s focus on employee handbooks and the need to ensure compliance with the NLRA.

Detailed discussion

Boch Honda, a Massachusetts-based auto dealership, provided a handbook to employees in 2010 that included a “Dress Code and Personal Hygiene Policy.” The policy stated: “Employees who have contact with the public may not wear pins, insignias, or other message clothing.”

Union members filed a charge with the National Labor Relations Board (NLRB) arguing that the rule violated Section 8(a)(1) of the National Labor Relations Act (NLRA) as it interfered with employees’ Section 7 rights.

An administrative law judge (ALJ) agreed and ordered the rule to be struck from the handbook with notice of the action posted at the employer’s worksite, but ruled that the pins could be prohibited because they posed a safety risk. Boch Honda appealed. A split panel of the NLRB affirmed the ruling with regard to the dress code and reversed on the issue of pins, finding that the employer failed to justify the ban.

Given the “well settled” rule that an employer violates Section 8(a)(1) by prohibiting employees from wearing union insignia at the workplace absent special circumstances and a narrowly tailored rule, the majority found that the dealership’s policy could not survive scrutiny.

“Clearly, the [dealership’s] proscription curtails employees’ Section 7 right to wear union insignia,” the panel wrote. “As such, it is overly broad. Absent special circumstances, then, it is unlawful.” The dealership’s justification for the rule—maintaining its public image—did not constitute a special circumstance justifying its prohibition, the majority said.

With regard to the ban on pins, Boch Honda argued that the rule was implemented to prevent injury to employees and damage to vehicles. Pins can fall off and possibly damage the engine, interior, or exterior of a car or become a projectile and cause employee injury, the dealership told the Board.

“[W]e find that the rule is not ‘narrowly tailored’ to address those concerns,” the panel said. “As written, the rule applies to employees who have contact with the public, regardless of whether they come into contact with the [dealership’s] vehicles. Indeed, the rule applies to employees who do not typically have contact with vehicles (e.g., finance and administrative personnel), and to other employees during their performance of tasks that do not require vehicle contact.”

Boch Honda presented no evidence that pins had actually resulted in damage or injury. “Although the record does contain evidence that employees have caused damage to vehicles, none of that damage was shown or even asserted to be related to employee pins,” the majority noted. And the handbook did not include any statement even arguably linking the rule to safety considerations, the Board added.

The policy stated that “[t]he purpose of the Dress Code/Personal Hygiene Policy is to ensure that employee dress and personal hygiene are consistent with their job functions and the Company’s interest in presenting a professional image to the public.”

“Employees would reasonably understand that image, not safety, was the [dealership’s] justification for the entire rule, including its ban on pins,” the majority wrote. “For all these reasons, we find that the [dealership] has not demonstrated special circumstances justifying its overly broad rule, and therefore the [dealership’s] maintenance of the rule violated Section 8(a)(1).”

The Board ordered that Boch cease and desist from maintaining the unlawful dress code policy, rescind the provision from the handbook and furnish an insert to employees with a lawful version, and post a notice about the order.

A dissenting member wrote separately to explain he would uphold the ALJ’s ruling with regard to the pin ban. “Automobiles are expensive, and the [dealership] has demonstrated that it experiences significant annual losses as a result of property damage to its vehicles,” member Harry I. Johnson, III wrote. “Because it is reasonably foreseeable that sharp objects could scratch, rip, fall into the internal compartments of, or otherwise damage the vehicles, the judge correctly found that special circumstances exist that justify the [dealership’s] prohibition.”

The panel also considered a social media policy instituted by Boch in the 2010 employee handbook but later removed in a 2013 version. While the majority found that the rescission was ineffective as a repudiation of the unlawful social media provisions because the dealership failed to provide employees with assurances that it would not interfere with employees’ Section 7 rights in the future, Johnson disagreed.

Not only did the employer remove the social media policy, it worked collaboratively with the NLRB to draft a compliant provision for the 2013 edition, he wrote.

“[W]e should recognize that the best, quickest way to achieve universal handbook legal compliance with Section 7 standards is to encourage employers to involve the Agency in redrafting provisions rather than to effectively punish them,” the dissent said. “Doing so discourages respondents from taking such actions to remedy alleged unfair labor practices far more promptly than after times lengthy and expensive litigation.”

To read the decision and order in Boch Honda, click here.