Q: How does the current National Labor Relations Board view employee handbook policies?
A: Under the Trump administration, the National Labor Relations Board (“Board”) has shifted in a more employer-friendly direction, including with respect to workplace policies. In a December 2017 decision, the NLRB reassessed the standard for evaluating when neutral workplace rules violate the National Labor Relations Act (NLRA). In that decision, the Board defined three categories of employer handbook rules and policies: (1) rules that are generally lawful; (2) rules that warrant individualized scrutiny; and (3) rules that are plainly unlawful.
Those three categories were expanded in June 6, 2018, when the Board’s General Counsel issued a new Guidance Memorandum (18-04), providing updated guidance on how regional NLRB offices should investigate unfair labor practice charges involving employer handbook language and rules.
Category 1 Rules: The Board has determined that employee handbook policies in this category generally are lawful, either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights, or because the potential adverse impact on protected rights is outweighed by the business justification associated with employer policy. The examples provided in the Guidance Memorandum of the types of rules that fall into this category include:
- Civility rules prohibiting “disparaging, or offensive language”;
- No-photography and no-recording rules;
- Rules against insubordination, non-cooperation, or on-the-job conduct that adversely affects operations;
- Disruptive behavior rules (for example, prohibiting conduct that creates a disturbance on company premises or creates discord with clients or fellow employees);
- Rules protecting confidential, proprietary, and customer information or documents;
- Rules against defamation or misrepresentation;
- Rules against using employer logos or intellectual property;
- Rules requiring authorization to speak for the company; and
- Rules banning disloyalty, nepotism, or self-enrichment.
Category 2 Rules: The Board has concluded that Category 2 rules are not “obviously lawful or unlawful, and must be evaluated on a case-by-case basis to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications.” The Guidance Memorandum provides examples of rules that fall into this category, including 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, which would be considered lawful, or confidentiality rules more specifically directed at employee wages, terms of employment, or working conditions, which is prohibited);
- Rules regarding disparagement or criticism of the employer (as opposed to civility rules regarding disparagement of employees, which is considered a lawful Category One rule);
- Rules regulating use of the employer’s name (as opposed to rules regulating use of the employer’s logo/trademark, which is allowed as a Category One rule);
- Rules generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf, which is a lawful Category One rule );
- Rules banning off-duty conduct that might harm the employer (as opposed to a rule banning insubordinate or disruptive conduct at work, which is a permitted Category One rule, or a rule specifically banning participation in outside organizations, which is an unlawful Category Three rule); and
- Rules against making false or inaccurate statements (as opposed to lawful rules against making defamatory statements).
Category 3 Rules: The Board has found that rules in this category are generally unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule. The examples provided in the Guidance Memorandum of the types of rules that fall into this category include:
- Confidentiality rules specifically regarding wages, benefits, or working conditions (such as a rule prohibiting employees from disclosing salaries and contents of employment contracts); and
- Rules against joining outside organizations or voting on matters concerning the employer.
The Memorandum also advises the regional NLRB offices that they should no longer find unlawful any rule that could be interpreted as covering Section 7 activity and should now focus on whether the rule in question would actually be interpreted to cover Section 7 activity. The Memorandum instructs regional offices that “ambiguities in rules are no longer interpreted against the drafter, and generalized provisions should not be interpreted as banning all activity that could conceivably be included.”
The Board has moved significantly in the direction of limiting its influence over employer handbook policies. Whether a particular employer rule is lawful, however, may rest on subtle differences in policy language. Moreover, the Guidance Memorandum does not provide an exhaustive list of all lawful and unlawful handbook policies.