The National Labor Relations Board ("NLRB" or the "Board") ruled on April 1, 2014, that a hospital's work rules barring "negativity" and requiring employees to represent their employer "in the community in a positive and professional manner" violated federal labor law.
Hills and Dales General Hospital ("the Hospital") developed the work rules at issue in response to low employee morale and in an attempt to change the Hospital's culture. The Hospital had been struggling with a poor work environment for some time. Among other problems, Hospital departments were not cooperating with each other, and employee relationships were suffering due to "back-biting and back stabbing." As a result, employee satisfaction was low, employees were looking for other job opportunities (outside the Hospital), and patients were seeking healthcare in other hospitals.
Among other measures, the Hospital set up employee teams to address such issues as standards and performance, employee recognition, continuous improvement, communication and service recovery. The "standards and performance team" was tasked with developing a statement of values and standards. The resulting Values and Standards of Behavior Policy ("policy") covered a wide range of topics, including customer service, respect, teamwork, attitude and fun.
Included in the policy were the following rules:
We will not make negative comments about our fellow team members and we will take every opportunity to speak well of each other.
We will represent Hills and Dales in the community in a positive and professional manner in every opportunity.
We will not engage in or listen to negativity or gossip. We will recognize that listening without acting to stop it is the same as participating.
The Board concluded that the three rules above were overbroad and ambiguous, and could be interpreted by employees as prohibiting activity protected by Section 7 of the National Labor Relations Act (the "Act").
Regarding the rules on negativity, the Board quickly dismissed the Hospital's contention that the evidence of employee involvement in developing the rules removed any impermissible ambiguity as to the meaning and purpose of the rules. The Board stated that "employees might well endorse an unlawful rule, knowingly or not, but their consent or acquiescence cannot validate the rule."
With respect to the rule on professionalism, the Board stated that it would discourage employees from engaging in protected public protests of unfair labor practices, or from making statements to third parties protesting their terms and conditions of employment—activity that may not be "positive" toward the Hospital but, according to the Board, is protected by Section 7 of the Act. This decision is another in a series of rulings where the NLRB has taken issue with customary and seemingly uncontroversial work rules that employers have imposed, whether formally or informally, on workers for generations. Only recently have such rules become the target of NLRB enforcement actions. Other recent NLRB rulings along the same lines include the following.
In Quicken Loans, Inc., 359 NLRB No. 141 (2013), for example, the Board found the company's non-disclosure rule to be unlawful. That rule defined "proprietary/confidential information" to include: (i) "non-public information relating to or regarding … personnel"; and (ii) "personnel information including, but not limited to, all personnel lists, rosters, personal information of co-workers" and "handbooks, personnel files, personnel information such as home phones, cell phone numbers, addresses, and email addresses." The Board concluded that the prohibition on disclosure of this information was unlawful because it would substantially hinder employees in the exercise of their rights under the Act.
Similarly, in MCPc, Inc., 360 NLRB No. 39 (2014), the Board invalidated a company's handbook policy, which provided that "dissemination of confidential information within [the Company], such as personal or financial information, etc., will subject the responsible employee to disciplinary action or possible termination." The Board concluded that "employees would reasonably construe this rule to prohibit discussion of wages or other terms and conditions with their co-workers—activity protected by [the Labor Law]."
And in Karl Knauz Motors, Inc., 358 NLRB No. 164 (2012), the Board concluded that a rule in the company's employee handbook that called for "courtesy" on the part of employees was unlawful. The rule stated: "Courtesy is the responsibility of every employee. … No one should be disrespectful or use profanity or any other language which injures the image or reputation of the [employer]." The Board held that a reasonable employee could interpret a prohibition on disrespectful or discourteous activities to include asserting certain rights under the Act, including advocating for improved terms and conditions of employment.
The NLRB's logic in cases such as the above is that the rule "might" be misinterpreted to apply to some unspecific protected activity, regardless of whether the actual application and enforcement of such rules is otherwise unobjectionable.
What This Means for Employers
The current NLRB is continuing to find unlawful any employer policy or rule if there is any arguable basis for it to conclude it may conceivably interfere with protected concerted activities, even if such interference has not occurred or is unlikely to occur.
The remedy ordered in this case was that the Hospital had to rescind the unlawful rules. There were no claims that the Hospital had disciplined any employee for violating those rules. An employer who disciplines an employee for violating an unlawful rule will be ordered to, among other remedies, revoke such discipline and "make whole" the disciplined employee for the employee's economic losses.
Employers should review the wording of each of their current and contemplated policies, evaluate the significance of the policy to the employer and consider making appropriate business judgments about how to proceed in light of the respective benefits and legal risks associated with that policy. This same cost-benefit analysis can be applied with respect to an employer's contemplated discipline, as well.