The National Labor Relations Board (NRLB, “the Board”) is at it again. In a recent ruling, the Board found an employer’s routine “courtesy” policy violated its employees’ Section 7 rights. Time will tell whether a federal court will agree with the Board and enforce its decision, but employers should take note of the current regulatory environment and the Board’s aggressive view in examining company policies.

In a split 2-1 decision recently issued by the NLRB (Karl Knauz Motors, Inc., 358 NLRB No. 164 (9/28/12)), the Board found that an auto dealership’s maintenance of an employee handbook provision requiring every employee to display “courtesy” toward customers, vendors, suppliers and fellow employees, violated Section 7 of the National Labor Relations Act (the “Act”)1. The majority, consisting of Chairman Mark Pearce and Member Sharon Block, found that the courtesy policy was “overbroad” and interfered with employee rights. They reasoned that employees “. . . would reasonably construe its broad prohibition against ‘disrespectful’ conduct and ‘language which injures the image or reputation of the Dealership’” to include protected Section7 activity such as statements objecting to or seeking to improve working conditions.

The two members joining in the majority opinion noted that there was nothing in the rule, or anywhere else in the employee handbook, that would “. . . reasonably suggest to employees that employee communications protected by §7 of the Act are excluded from the rule’s broad reach.” Responding to the contention by Member Brian Hayes in his dissent, that the majority had read the crucial phrases of the rule “out of context,” and that the rule did nothing more than encourage “courteous, polite and friendly” behavior which was a “common-sense behavioral guideline for employees,” the majority concluded that if the rule had only contained the first sentence, they might have agreed with the dissent, but that by going further than just providing the positive “aspirational” language of the first section, the rule conveyed a more “complicated” message to employees. They found that the second sentence of the rule proscribes “. . . not a manner of speaking, but the content of employee’s speech – content that would damage the Respondent’s reputation.”2

In his dissent, Member Hayes found that the majority had reached its result by “reading words and phrases in isolation and by effectively determining that the National Labor Relations Act invalidates any handbook policy that employees conceivably could construe to prohibit protected activity regardless of whether they reasonably would do so.” Member Hayes referred to the Board’s previous decision in Lafayette Park Hotel, 326 NLRB 824 (1998), enforced 203 F.3d 52 (D.C. Cir. 1995), which was enforced by the D.C. Circuit Court of Appeals, as support for his argument. See, Community Hospitals of Central California v. NLRB, 335 F.3d 1079, 1088 (D.C. Cir. 2003), (allegedly unlawful language in a rule must be read in context). The dissent pointed out that the majority focused on one word – “disrespectful” – and one phrase – “language which injures the image or reputation of the Dealership” – in isolation from the rest of the rule and asserted that employees would “reasonably believe” that even courteous and friendly expressions of disagreement with working conditions might be deemed “disrespectful” or damaging to the employer’s image or reputation and possibly result in discipline.

It is certainly reasonable for employers to expect employees to demonstrate “courteous, polite and friendly” behavior when interacting with customers and members of the public. Many employers may have adopted rules similar to the rule found unlawful by the Board in the Knauz Motors decision. Pending a reversal of this decision by a federal Court of Appeals, any employer who maintains a rule similar to the one found unlawful in this case should have its rule reviewed by competent labor counsel. The Board majority noted that a rule requiring employees to be courteous, polite and friendly to customers, vendors and suppliers, as well as fellow employees does not violate the Act, but the rule was found to run afoul of the Act only in its prohibition of “disrespectful” language “which injures the image or reputation of the Dealership.” This decision is yet another example of action by the current NLRB majority to extend the meaning and protections of the Act far beyond what the drafters ever intended, or what the Board itself has previously found to be protected conduct.