Beware of Your Employee Handbook

by Sherman & Howard L.L.C.

[author: Karla Sanchez]

Recently, employee handbooks have been the subject of many National Labor Relations Board ("NLRB") complaints, particularly in cases where the employees are not represented by unions.  The NLRB has struck down handbook provisions it claims may restrict or "chill" employees' exercise of their so-called Section 7 rights under the National Labor Relations Act ("NLRA" or "Act").^  Section 7 protects the right of employees to discuss with coworkers their terms and conditions of employment and engage in other protected/concerted activities.  Few of these complaints appear to have arisen from an employee actually charging that he/she was in fact "chilled" from engaging in protected activities.  Rather, NLRB regional offices appear to be regularly reviewing employee handbooks in the course of any employee-initiated investigation.

That was exactly the case in EchoStar Technologies, L.L.C.,[1] when an employee filed a charge stemming from the employee's termination.  This charge was twice amended and by the time the case was tried, the only allegations remaining related to the language in the employee handbook.  The EchoStar decision highlights some of the sections in personnel manuals the NLRB will attack, including policies that are often taken for granted by employers. 

Disparaging Comments:  EchoStar had a policy prohibiting employees from making "disparaging or defamatory comments" about the employer, its employees and products.  The Board found the policy unlawful, with the Administrative Law Judge concluding that a "reasonable employee" would read this section to prohibit his/her rights to engage in protected activities.  For example, the Judge noted that employees are entitled to make statements concerning their employer which are derogatory, including comments that the employer overworks or underpays its employees.  The NLRB contended that only the prohibition of "disparaging" and not "defamatory" statements was unlawful.  The ALJ, however, concluded that the policy was not saved by the employer's interweaving of lawful and unlawful prohibitions. 

Contact with Media: EchoStar maintained a policy stating that employees had to receive authorization from the employer's communication department before they could communicate anything about EchoStar to the media.  The ALJ found this policy violated the Act because it did not limit this prohibition to "official acts or communications."  According to the Judge, an employee could perceive this policy to restrict any communications with the media related to the employer or his employment.

Disclosure of Confidential Information: The Judge upheld EchoStar's policy prohibiting employees from discussing or disclosing "confidential or propriety information."  The NLRB argued that because confidential information was defined to include "employee information," without providing an exception for Section 7 activities, the policy was overbroad.  The Judge disagreed, finding that the policy, when read as a whole, made clear to a reader that it dealt only with "proprietary and business confidential information."

Communications with the Government: The Judge struck down EchoStar's policy requiring an employee to notify the employer's general counsel of any government communications made to the employee concerning EchoStar.  The Judge found that this policy was overbroad, as it did not limit this restriction to government agency contact for official business purposes.

EchoStar's employee handbook contained a provision declaring that no policy or provision would be given effect if it were inconsistent with applicable law, and the Company argued that this saved the provisions.  The ALJ rejected this argument, concluding that the general savings clause did not alter his findings.  The Judge explained that no reasonable employee would reference the general disclaimer on page two of the handbook when determining whether the policies located elsewhere in the handbook impinged on the employee's Section 7 rights.

In light of rulings like EchoStar, employers should take the time now to audit and correct policies the NLRB might interpret as potentially "chilling" employee rights.

[1]EchoStar Technologies, L.L.C., 27-CA-066726, 2012 WL 4321039 (NLRB Div. of Judges, Sept. 20, 2012).


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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