In First Transit, Inc., the National Labor Relations Board (NLRB) found that a savings provision in an employee handbook recognizing employees’ right to decide whether they want to have union representation was insufficient to cure the employer’s overbroad employee conduct rules. The employer unsuccessfully argued that even if the rules were overbroad, the “employee rights” savings provision cured any violations of the National Labor Relations Act.

Specifically, the employer relied on a “freedom of association” policy in its employee handbook which informed employees that “during union organizing campaigns, management shall support the employee’s individual right to choose whether to vote for or against union representation without influence or interference from management.” The NLRB began its analysis by recognizing that an employer’s express notice to employees advising them of their rights under the Act may, in certain circumstances, clarify the scope of an otherwise ambiguous and unlawful rule. To be effective, however, the savings provision must adequately address the “broad panoply” of employee rights protected by Section 7 of the Act.

In this case, the NLRB characterized the savings provision as “too narrow” to cure the overbroad rules because it only addressed union organizing, as opposed to employee rights generally. The panel also noted that the savings provision was not prominently displayed or referenced in the employee handbook or located in close proximity to the challenged employee conduct rules. Nor did the savings provision cross-reference the conduct rules. Based on these considerations, the NLRB found that employees would not view the “freedom of association” policy as a disavowal of the unlawful employee conduct rules.

The NLRB’s rulings with respect to the lawfulness of the challenged rules were a mixed bag. The NLRB upheld the employer’s rules prohibiting:

• using Company property for activities not related to work;
• poor work habits including loafing and wasting time; and
• profane or abusive language where the language used is uncivil, insulting,  contemptuous, vicious, or malicious.

In contrast, the NLRB struck down rules that prohibited employees from:

• discourteous or inappropriate attitudes or behaviors to passengers, other employees, or members of the public;
• participating in outside activities that are detrimental to the company’s image or reputation, or where a conflict of interest exists; and
• conducting oneself during nonworking hours in such a manner that the conduct would be detrimental to the interest or reputation of the Company.

This decision serves as a reminder to employers that merely inserting a savings provision in an employee handbook is not an absolute shield from a violation of employees’ rights under the Act. While employers may rely on a savings provision as additional support in defending a challenged rule that is ambiguous, the rule itself will typically determine whether the NLRB finds a violation. If the rule is unambiguous and found to be overbroad, the savings provision will not cure the violation. This is especially true where, as in this case, the savings provision was narrow in its scope and did not address employees’ “broad panoply” of rights under the Act.

Employers who have read our recent alerts are familiar with the NLRB’s focus on employee conduct rules. The First Transit decision is another example of workplace rules gone awry despite the employer’s efforts to acknowledge employee rights under federal labor law.