NLRB Continues to Take Aim at Workplace Policies as Overly Broad

by Ballard Spahr LLP
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The National Labor Relations Board (NLRB) has kept its focus on workplace policies it views as overly broad with a recent decision striking down a national retailer's policy prohibiting solicitation and distribution of pamphlets or other literature for “commercial purposes.” This development comes on the heels of an advisory memorandum recently issued by the NLRB reiterating its position that a blanket rule of confidentiality for employee investigations is unlawfully overbroad. Both developments should prompt employers to reexamine the scope of such policies.

Solicitation/Distribution Policies

In a decision issued on April 26, 2013, the NLRB upheld an administrative law judge’s ruling that a national retailer’s solicitation/distribution policy was overly broad, but reversed the ALJ’s finding that the company’s parking lot policy was unlawful. Under the parking lot policy, workers are required to notify either store security or their leader on duty if they see anyone unfamiliar loitering around the employee parking area.

There was no dispute that part of the solicitation/distribution policy lawfully prohibited solicitation and distribution of literature during working time and in working areas. The NLRB held, however, that an additional prohibition against soliciting, distributing literature, selling merchandise, or conducting monetary transactions for commercial purposes at all times on store premises violated the National Labor Relations Act (NLRA).

Although the NLRB conceded that in isolation the prohibition appears permissibly to address selling goods and services, the immediately preceding language banning solicitation and distribution “[f]or personal profit” already encompassed selling goods and services. Therefore, the NLRB reasoned, “it would be entirely reasonable for employees to conclude that ‘[f]or commercial purposes’ means something different, including solicitation and distribution for other organizations, such as unions.” The NLRB’s interpretation was bolstered by the fact that, during a pre-election campaign, the retailer had “told employees that the Union is a ‘business’ that ‘sells memberships.’” 

In addition to ruling on the solicitation/distribution policy, the NLRB reversed the administrative law judge’s finding concerning the retailer's parking lot policy. The ALJ had found unlawful the policy requiring employees to report unknown loiterers because it could be construed by employees as restricting their right to engage in union organizing and other activities protected under Section 7 of the NRLA.

The NLRB explained that “when (as here) a rule does not refer to Section 7 activity, ‘we will not conclude that a reasonable employee would read the rule to apply to such activity simply because the rule could be interpreted that way.’” Applying that principle in light of the policy’s stated purpose of ensuring employee safety, the NLRB held that “a reasonable employee would realize the lawful purpose of the challenged provision from its context and infer that [the retailer's] purpose in promulgating it was to ensure safety, ‘not to restrict Section 7 activity.’”

Workplace Investigations

An NLRB Advice Memorandum, dated January 29, 2013, but not released until late April, advised that “a blanket rule prohibiting employee discussions of ongoing investigations is invalid” because it did not include any specific analysis of the need for confidentiality. The employer’s Code of Conduct included a provision stating:

Verso [Paper] has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation, and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up. To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence. If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

The memorandum explains that employees can be prohibited from discussing investigations only if there is a demonstrated legitimate and substantial business justification that outweighs Section 7 rights. Citing its decision last year in Banner Health, the NLRB advised that such a justification must be more than “a generalized concern with protecting the integrity of its investigation.” Rather, an employer needs to present specific facts on a case-by-case basis to meet its burden. Instead of a blanket confidentiality rule, the memorandum suggested the employer could modify its rule to lawfully inform employees that it may decide in some circumstances that confidentiality is necessary to achieve the company’s objectives regarding an investigation.

Ballard Spahr’s Labor and Employment Group routinely assists employers with NLRB compliance and in drafting and reviewing workplace policies. If you have questions or concerns about any workplace policies, please contact Brian D. Pedrow at 215.864.8108 or pedrow@ballardspahr.com, Andrew I. Herman at 215.864.8412 or hermana@ballardspahr.com, or the member of the Group with whom you work.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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