During the Obama Administration, the National Labor Relations Board (“NLRB” or “Board”) adopted an aggressive approach to evaluating the legality of – and often striking down – employee handbook policies and rules, to the consternation of employers across the country. These cases involved, what until then, had widely been considered commonplace handbook policies unrelated to activity that is protected under Section 7 of the National Labor Relations Act (“NLRA”), but the Board, applying an expansive interpretation of a case called Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), frequently found that such rules could be interpreted by employees as infringing upon their Section 7 rights.
Last December, employers breathed a major sigh of relief when a newly-constituted NLRB abandoned the predecessor Board’s framework for evaluating facially neutral handbook rules and articulated a new test which balances a rule’s impact on employees’ Section 7 rights against an employer’s right to maintain discipline and productivity (considerations that played no role in the analysis under the old test). The Boeing Co., 365 NLRB No. 154 (2017). In Boeing, the Board stated that handbook rules would fall in one of three categories. In Category 1 are rules that are lawful to maintain because their impact on Section 7 rights is non-existent or is clearly outweighed by the employer’s business justification for the rule. In Category 2 are rules that warrant individualized scrutiny based on context and other case-specific factors to determine their lawfulness. In Category 3 are rules which are unlawful to maintain because the impact on Section 7 rights outweighs any legitimate business justification for the rule. While employers welcomed the Board’s willingness to take a rule’s business justification into account under the new test, Boeing provided only limited clarity on the validity of the scores of handbook rules besides the one or two that the case specifically addressed.
Much greater clarity was recently provided by NLRB General Counsel Peter Robb. As the agency’s chief “prosecutor” overseeing the agency’s Regional Offices, the general counsel has tremendous influence over the types of cases that the NLRB will pursue and the legal theories that will be applied. Of interest here, following up on the Boeing ruling, GC Robb recently issued a guidance memorandum to the Regional Offices (General Counsel Memorandum 18-04, June 6, 2018, publicly available here), in which he provided examples of how Boeing should be applied to a wide range of handbook policies and rules.
The memo points out that the Board in Boeing “significantly altered jurisprudence on the reasonable interpretation of handbook rules. Specifically, the Board severely criticized Lutheran Heritage and its progeny for prohibiting any rule that could be interpreted as covering Section 7 activity, as opposed to only prohibiting rules that would be so interpreted.” (emphasis in original). The memo further advised that “Regions should now note that ambiguities in rules are no longer interpreted against the drafter, and generalized provisions should not be interpreted as banning all activity that could conceivably be included.” The tone and direction of the guidance represents a significant departure from the Board’s prior position concerning handbook rules under Lutheran Heritage Village.
The memo is worth reading in its entirety, but for summary purposes a quick scan of the types of rules that GC Robb placed in each category is instructive:
Category 1 – Generally Lawful Rules:
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Civility Rules
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No-photography and no-recording rules
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Rules against insubordination, non-cooperation, or on-the-job conduct that adversely affect operations
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Disruptive behavior rules
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Rules protecting confidential, proprietary, and customer information or documents
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Rules against defamation or misrepresentation
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Rules against using employer logos or intellectual property
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Rules requiring authorization to speak for the company
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Rules banning disloyalty, nepotism, or self-enrichment
Category 2 – Examples of Rules Requiring Case-by-Case Analysis:
This category potentially includes rules regarding conflicts-of-interest, confidentiality, disparagement or criticism of the employer, speaking to the media or third parties, off-duty conduct, making false or inaccurate statements – if such rules are overly broad and/or imprecisely drafted.
Category 3 – Generally Unlawful Rules:
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Confidentiality rules specifically regarding wages, benefits, or working conditions
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Rules against joining outside organizations or voting on matters concerning employment
This is meant to be a summary only and not a basis for determining the legality of any particular rule in any category; despite the helpful guidance provided by the memo, it is highly advisable to have employee handbook policies and rules reviewed by legal counsel. But the memo clearly signals what many will consider a return to normalcy for employee handbooks. All employers, including, especially those employers who had revised their handbooks to conform to the now-abandoned Lutheran Heritage Village standard, should consider an attorney review of their employee handbooks and policies in light of these developments.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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