nlrb briefing regarding employee handbook policies

NLRB Briefing Regarding Employee Handbook Policies

Presented by: Derek Barella

May 7, 2015

Today’s eLunch Presenter

Derek Barella Partner, Labor &

Employment Chicago

[email protected]

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Today’s Agenda

• Governing law • Governing agency • Memorandum GC 15-04 – Report of the General Counsel

Concerning Employer Rules • Confidentiality

• Employee Conduct towards the Employer and Co-workers

• Employee Interaction with Third Parties (e.g., media policies)

• Use of Company Logos, Copyrights, Trademarks

• Photography, Recordings, PEDs (Personal Electronic Devices)

• Employees Leaving Work

• Conflicts of Interest

• Summary and Recommendations

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Governing Law – NLRA

National Labor Relations Act • Broad application to “employers”– acting directly or indirectly as

an employer, except: • Federal government

• States and political subdivisions

• Federal Reserve Banks

• Wholly-owned government corporations

• Employers subject to RLA

• Labor organizations, except when they act as employers

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National Labor Relations Act • Any person working for an employer is an “employee” with rights • Includes individuals not presently working if due to labor dispute • Significant exclusions:

• Independent contractors – not defined in Act, NLRB applies right of control test

• Supervisors (although not illegal to organize, no protection under Act or use of election procedures)

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National Labor Relations Act • Section 7 defines permissible/protected employee conduct:

Employees shall have the right to self-organization; to form join, or assist labor organizations, to bargain collectively through representatives of their choosing; and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities

• Section 8(d) defines the duty to bargain • Section 8(a) defines impermissible employer conduct • Section 8(b) defines impermissible union conduct • Establishes NLRB as governing body

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Section 7 Rights • Section 7 – Protects employees’ rights to:

• “form, join, or assist labor organizations”

• “bargain collectively through representatives of their own choosing”

• “engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection”

• “refrain from any or all such activities”

• Primary focus of enforcement scheme

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Governing Agency – NLRB

National Labor Relations Board • Two primary arms

• Adjudicative • NLRB

• Administrative Law Judges

• Investigative and prosecutorial • General Counsel

• 26 Regional Offices, each headed by a Regional Director

• Field Agents and Attorneys in each Region

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Memorandum GC 15-04 • Report of the General Counsel concerning recent case

developments in the context of employee handbook rules • Challenges arise from filing of a charge (not agency-initiated) • Facial challenges less likely • But, most every charge potentially involves an as-applied

challenge to some work rule or policy • Charge filed with Regional office

• Regional investigator solicits employer response • Statement of position and exhibits

• Additionally, specific documents often requested – common practice to request entire handbook

• Investigative subpoena to compel production

• Analysis of work rule may be directly related to charge issue or ancillary

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Memorandum GC 15-04 • Presumes most rules not drafted with an intent to infringe on

Section 7 rights • But, Act precludes even “well-intentioned rules” that would

“inhibit” employees’ from engaging in protected conduct • GC's priority list includes stamping out “surprisingly ubiquitous”

company policies forbidding employees from discussing compensation

• Mere maintenance of a work rule may violate Section 8(a)(1) if it has a “chilling effect” on Section 7 activity

• Application of unlawful work rule may violate other sections

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Memorandum GC 15-04 • Facially-neutral work rule will still be found unlawful if:

• Employees would “reasonably construe” to prohibit Section 7 activity

• Rule promulgated in response to union or other Section 7 activity

• Rule actually applied to restrict exercise of Section 7 rights

• Majority of the Board's enforcement activity involves the “reasonably construe” prong

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Context for Consideration of GC 15-04 • Fact-specific inquiry

• Specific language of rule

• Context for rule

• Disclaimers

• Prior application

• Looks a lot like fly-specking • Difficult to find magic bullet • But, guidance reflects value judgments of chief prosecutor

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Confidentiality Rules

Confidentiality Rules

• Board recognizes employers’ substantial and legitimate interest in maintaining confidentiality of certain business information

• But, employees have Section 7 rights to discuss wages, hours, other terms and conditions of employment • With co-workers

• With non-employees

• But, employees have a right to protest their wages/working conditions and to share information regarding same

• So, confidentiality rules deemed overbroad if they: • Explicitly prohibit discussion of terms and conditions of employment

• Define “confidential information” in broad or vague language such that employees would reasonably construe as restricting discussion

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Confidentiality Rules – Unlawful

• Do not discuss “customer or employee information” outside of work, including “phone numbers [and] addresses” • Overbroad reference to “employee information”

• Blanket ban on discussing employee contact information without regard for how such information was obtained

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• You must not disclose proprietary or confidential information about [the Employer, or] other associates (if the proprietary or confidential information . . . was obtained in violation of law or lawful Company policy • Reference to “confidential information” about the Employer is ok

• Reference to “confidential information” about other associates not a blanket ban, but vague because employee would not understand “lawful Company policy” qualifier

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• Never publish or disclose [the Employer’s] or another’s confidential or other proprietary information. Never publish or report on conversations that are meant to be private or internal to [the Employer] • Ok to ban disclosure of employer’s own confidential information (so long as

not defined to include/reference personnel information)

• Broad reference to “another’s” information is overbroad here

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• Rule prohibiting employees from “[d]isclosing . . . details about the [Employer]”

• Sharing of [overheard conversations at the work site] with your co-workers, the public, or anyone outside of your immediate work group is strictly prohibited

• Discuss work matters only with other employees who have a specific business reason to know or have access to such information . . . Do not discuss work matters in public places

• If something is not public information, you must not share it • Too vague and could be read to encompass non-public information like

employee wages, benefits, etc.

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• Confidential information defined as “All information in which its [sic] loss undue use or unauthorized disclosure could adversely affect the [Employer’s] interests, image and reputation or compromise personal and private information of its members.” • Could encompass sharing of information relating to protest about working

conditions

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Confidentiality Rules – Lawful

• No unauthorized disclosure of “business secrets or other confidential information”

• Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [Employer] is cause for disciplinary action, including termination

• Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding business partners, vendors or customers • No reference to terms of employment

• General reference to “confidential” is ok, so long as not defined in an overbroad manner

• No other language that might reasonably be construed to include Section 7 communications

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Confidentiality Rules – Lawful

• Prohibition on disclosure of all “information acquired in the course of one’s work.”

• Rule prohibiting employees from “[d]isclosing . . . details about the [Employer]”

• Sharing of [overheard conversations at the work site] • Overbroad, but

• When viewed in context – nested among rules relating to conflicts of interest and compliance with SEC regulations – employees would not reasonably construe to limit Section 7 activity

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Employee Conduct Rules

Employee Conduct Rules

• Board recognizes employers’ legitimate interest in employees’ professional conduct with co-workers, customers, business partners, as distinguished from “company” or “management”

• Board also recognizes employer interest in prohibiting insubordination

• But, employees have Section 7 rights to criticize or protest their employer's labor policies or treatment of employees

• So, conduct rules deemed overbroad if they: • Prohibit “disrespectful,” “negative,” “inappropriate,” or “rude” conduct

towards the employer or management

• Ignore fact that even employee-employee conversations regarding unions and protected activity can become heated

• Employee criticism does not lose the Act’s protection simply because the criticism is false or even defamatory – must be maliciously false

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Conduct Rules (toward employer) – Unlawful • Be respectful to the company, other employees, customers,

partners, and competitors • Be respectful of others and the Company

• Overbroad because employees would reasonably construe to ban criticism of the employer – namely, the company and management

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Conduct Rules (toward employer) – Unlawful • Do not make fun of, denigrate, or defame your co-workers,

customers, franchisees, suppliers, the Company, or our customers

• No defamatory, libelous, slanderous or discriminatory comments about the Company, its customers and/or competitors, its employees, or management • Same reasoning – would be read to ban criticism

• Only maliciously false information goes too far, in Board’s view

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Conduct Rules (toward employer) – Unlawful • Refrain from any action that would harm persons or property or

cause damage to the Company’s business or reputation • Do not make statements that damage the company or the

company's reputation or that disrupt or damage the company’s business relationships

• It is important that employees practice caution and discretion when posting content on social media that could affect [the Employer’s] business operation or reputation • Right to criticize an employer’s labor policies and treatment of workers

extends to public forums

• Distinguish from criticisms aimed at disparaging an employer’s product, which are unprotected

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Conduct Rules (toward employer) – Unlawful • Disrespectful conduct or insubordination, including but not

limited to refusing to follow orders from a supervisor or a designated representative

• Chronic resistance to proper work-related orders or discipline, even though not overt insubordination, will result in discipline • Purport to ban insubordination, but also conduct that does not rise to the

level of insubordination

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Conduct Rules (toward co-workers) – Unlawful • Don’t pick fights online • Do not make insulting, embarrassing, hurtful or abusive

comments about other company employees online and avoid the use of offensive, derogatory or prejudicial comments

• Do not send unwanted, offensive, or inappropriate emails • Material that is fraudulent, harassing, embarrassing, sexually

explicit, profane, obscene, intimidating, defamatory, or otherwise unlawful or inappropriate may not be sent by email • Debates about unionization and concerted activity are heated exchanges

• Employer has to put up with some intemperate language

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Adtranz ABB Daimler-Benz Trans. v. NLRB (D.C. Cir. 2001) • Consistent with Company’s shared values, work rules prohibit

“abusive or threatening language to anyone on company premises”

• NLRB finds rule to be overbroad – orders revision of rules, new election, posting of notice

• D.C. Circuit vacates Board’s order: • “Under the Board’s reasoning, every employer in the United States that has

a rule or handbook barring abusive and threatening language from one employee to another is now in violation of the NLRA, irrespective of whether there has ever been any union organizing activity at the company. This position is not “reasonably defensible.” It is not even close.

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Adtranz ABB Daimler-Benz Trans. v. NLRB • More from the D.C. Circuit:

• “[I]t is preposterous that employees are incapable of organizing a union or exercising their other statutory rights under the NLRA without resort to abusive or threatening language.”

• “The NLRB notes that union campaigns are heated affairs, often spawning intemperate language. . . According to the Board and the Union Intervenor, it is perfectly acceptable to use the most offensive and derogatory racial or sexual epithets, so long as those using such language are engaged in union organizing or efforts to vindicate protected labor activity. Expecting decorous behavior from employees is apparently asking too much. Indeed, Union Intervenor suggests that it is unfair to expect union members to comport themselves with general notions of civility and decorum when discussing union matters or exercising other statutory rights.”

• “We do not share the Union's low opinion of the working people it purports to represent. America's working men and women are as capable of discussing labor matters in intelligent and generally acceptable language as those lawyers and government employees who now condescend to them.”

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Conduct Rules (toward customers) – Lawful • No rudeness or unprofessional behavior toward a customer, or

anyone in contact with the company • Employees will not be discourteous or disrespectful to a

customer or any member of the public while in the course and scope of company business • Rules requiring respect toward customers, competitors, etc. but without

mention of management are ok

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Conduct Rules – Lawful

• Each employee is expected to work in a cooperative manner with management/supervision, co-workers, customers, and vendors • Rules requiring cooperation in the performance of work are ok

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• Being insubordinate, threatening, intimidating, disrespectful or assaulting a manager/supervisor, co-worker, customer or vendor will result in discipline • Prohibition on being “disrespectful” to management is overbroad

• But, context – part of larger provision clearly focused on serious misconduct – makes it unreasonable to assume employees would be chilled

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• Making inappropriate gestures, including visual staring • Any logos or graphics worn by employees must not reflect any

form of violent, discriminatory, abusive, offensive, demeaning or otherwise unprofessional message

• Threatening, intimidating, coercing, or otherwise interfering with the job performance of fellow employees or visitors

• No use of racial slurs, derogatory comments, or insults • When “professionalism” rules require respect toward customers or direct

employees not to engage in unprofessional conduct with no mention of company or management, no reason for employees to believe it prohibits Section 7 criticism

• Last example’s reference to “derogatory comments” overbroad, but context (in section dealing with workplace harassment) saves it

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Rules Concerning Third-Party Communications

Third-Party Communications

• Employers have a legitimate interest in controlling who makes official statements or the business

• But, employees have Section 7 rights to communicate with news media, government agencies, other third-parties about wages and terms of employment

• So, third-party communication rules overbroad if they could reasonably be construed as limiting employees’ ability to communicate with media or other third-parties on their own or co-workers’ behalf

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Third-Party Communications – Unlawful

• Employees are not authorized to speak to any representatives of the print and/or electronic media about company matters unless designated to do so by HR, and must refer all media inquiries to the company media hotline • Could be construed to encompass employment terms and labor relations

• “No limiting language or other context in the rule to clarify that the rule applied only to those speaking as official company representatives”

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• Associates are not authorized to answer questions from the news media . . . When approached for information, you should refer the person to the [Employer’s] Media Relations Department • Blanket restrictions on employee responses to media inquiries

• Employees would reasonably understand to apply to all media contacts, not only those seeking the employer’s official position

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• If you are contacted by any government agency, you should contact the Law Department immediately for assistance • Employer has interest in presenting its own position to investigating agency,

but this rule goes further

• Employees would reasonably believe they were restricted from speaking with an agency without management approval

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Third-Party Communications – Lawful

• The company strives to anticipate and manage crisis situations in order to reduce disruption to our employees and to maintain our reputation . . . To best serve these objectives, the company will respond to the news media in a timely and professional manner only through the designated spokespersons • Employees would reasonably understand to mean that they should not

speak on behalf of the company

• Refers to contact with media regarding non-Section 7 related matters, such as crisis situations

• Associates are not authorized to answer questions from the news media . . . When approached for information, you should refer the person to the [Employer’s] Media Relations Department

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Third-Party Communications – Lawful

• Events may occur at our stores that will draw immediate attention from the news media. It is imperative that one person speaks for the Company to deliver an appropriate message and to avoid giving misinformation in any media inquiry. . . Every employee is expected to adhere to the following media policy . . . Answer all media/reporter questions like this: “I am not authorized to comment for [the Employer] (or I don't have the information you want). Let me have our public affairs office contact you.” • Reasonable to construe as attempt to control company’s message, rather

than restrict Section 7 communications to the media

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Rules Concerning Company Logos, Copyrights, Trademarks

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Rules Governing Logos, Copyrights

• Board recognizes copyright holders have a clear interest in protecting intellectual property

• But, employees may have an interest in using the company’s name, logo, etc. in communications about the employer or working conditions, including picket signs and leaflets

• But, employer proprietary interests not implicated by an employees' non-commercial use of a name, logo, or other trademark to identify the employer in the course of Section 7 activity

• So, broad ban on all use of logos, etc. without further clarification will be deemed overbroad

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Logos, Copyrights – Unlawful

• Do not use any Company logos, trademarks, graphics, or advertising materials in social media

• Do not use “other people’s property,” such as trademarks, without permission in social media

• Use of [the employer’s] name, address or other information in your personal profile [is banned]. . . In addition, it is prohibited to use [the employer’s] logos, trademarks or any other copyrighted material • Broad restrictions that would ban fair use of employer’s IP in the course of

protected concerted activity – e.g., FB posts, handbills, picket signs

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Logos, Copyrights – Lawful

• Respect all copyright and intellectual property laws. For [the employer’s] protection as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks and other intellectual property, including [the employer’s] own copyrights, trademarks and brands • Unlike prior examples, which broadly ban all employee use of IP, this rule

simply requires employees to respect IP protections, permitting “fair use”

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Logos, Copyrights – Lawful

• Do respect the laws regarding copyrights, trademarks, rights of publicity and other third-party rights. To minimize the risk of a copyright violation, you should provide references to the source(s) of information you use and accurately cite copyrighted works you identify in your online communications. Do not infringe on [employer] logos, brand names, taglines, slogans, or other trademarks. • Same reasoning, based on employees’ presumed expertise in “fair use”

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Rules Concerning Photography, Recording, Personal Electronic Devices

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Photography, Recording, PEDs

• Board recognizes legitimate interests in legitimate confidential information and intellectual property

• Also a legitimate interest in working time being used for work • But, employees have Section 7 right to photograph and make

recordings in furtherance of protected converted activity • So, rules placing total ban on photography or recordings or

banning devices for such activities will be deemed overbroad • Rules regulating employee recording or photography will be lawful if limited

in scope

• E.g., no-photography rule instituted in response to breach of patient privacy

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Photography, etc. – Unlawful

• Taking unauthorized pictures or video on company property is prohibited

• No employee shall use any recording device, including but not limited to audio, video, or digital, for the purpose of recording any [company] employee or [company] operation • Total ban on use of personal equipment to engage in Section 7 activity while

on non-work time

• Could include, for example, attempts to document health and safety violations

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Photography, etc. – Lawful

• No cameras are to be allowed in the store or parking lot without prior approval from the corporate office • Embedded in a lawful media policy

• Immediately followed instructions on how to deal with reporters at the store

• GC concludes employees would read the rule to ban news cameras, not personal cameras

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Rules Concerning Leaving Work

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Leaving Work

• Board recognizes employers have an interest in employees working during work time

• But, “one of the most fundamental rights” under Section 7 is the right to go on strike

• So, rules that regulate when an employee can leave work are overbroad if they could reasonably be construed as forbidding protected walkouts

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Leaving Work – Unlawful

• Failure to report to your scheduled shift for more than three consecutive days without prior authorization or “walking off the job” during a scheduled shift is prohibited

• Walking off the job . . . is prohibited • Reference to “walking off the job” is too close to strike or walkout

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Leaving Work – Lawful

• Entering or leaving Company property without permission may result in discharge • No mention of “work stoppage” or “walking off the job”

• In the absence of such terms, rule forbidding employees from leaving work during work time without permission will not reasonably be read to encompass strikes

• But, rule requiring employees to obtain permission before entering the property was unlawful because employers cannot deny off-duty employees access to parking lots and outside nonwork areas (absent business justification)

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Leaving Work – Lawful

• Walking off shift, failing to report for a scheduled shift and leaving early without supervision are also grounds for immediate termination • Includes term “walking off shift,” which is usually overbroad

• But, here, not unlawful because of context – health care provider and employees have attendant patient care responsibilities

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Conflicts-of-Interest Rules

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Conflicts-of-Interest

• Employer has clear interest in preventing conflicts-of-interest • But, employees have Section 7 right to engage in concerted

activity – including protest – that may be considered to "conflict" with employer's interests

• So, if conflict-of-interest rule is general or vague enough that it could be read to prohibit protected activities, it will be deemed overbroad

• Conflict-of-interest rules should include examples or otherwise clarify limitation to legitimate business interests

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Conflicts-of-Interest – Unlawful

• Employees may not take “any action” that is “not in the best interest of [the Employer]” • Phrased too broadly with no clarifying examples

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Conflicts-of-Interest – Lawful

• Do not “give, offer or promise, directly or indirectly, anything of value to any representative of an Outside Business,” where “Outside Business” is defined as “any person, firm, corporation, or government agency that sells or provides a service to, purchase from, or competes with [the Employer.]” Examples of violations include “holding an ownership or financial interest in an Outside Business” and “accepting gifts, money, or services from an Outside Business” • Examples make clear rule not intended to encompass Section 7 activity

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• “I will not engage in any activity that might create a conflict of interest for me or the company,” where the conflict of interest policy devoted two pages to examples, such as “avoid outside employment with a customer, supplier, or competitor, or having a significant financial interest with one of these entities”

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• Refrain from “any activity or having any financial interest that is inconsistent with the Company's best interest” and also refrain from “activities, investments or associations that compete with the Company, interferes with one’s judgment concerning the Company's best interests, or exploits one's position with the Company for personal gains” • Requirement to refrain from activities or associations inconsistent with the

Company’s best interests is overbroad

• But, contextual analysis saves the rule – surrounding language and context negates possibility employees would reasonably construe to prohibit association with unions

• Rule contained in handbook section devoted to business ethics and including requirements to act with “honesty and integrity” and to provide accurate information in government (SEC) filings

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Summary and Recommendations

Summary (Commentary) on GC 15-04

• Highlights extreme subjectivity in analysis • No magic bullets • But, context is important • Specific non-Section 7 examples are even more important • Some examples of lawful language provided – but again, most

handbooks are not one-size-fits-all

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Recommendations

• Take GC 15-04 for what it’s worth – i.e, there is some value here, but likely impossible to craft a bulletproof handbook

• Possible company response falls on spectrum • Comprehensive review and revision in attempt to track all “model” policies

• Stay the course, wait for new administration and Board

• Middle ground – reasonable scope audit

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Recommendations • Consider audit of handbook/policies that is reasonable in scope

• Collect policies – across divisions, facilities, operating units

• Consider differences – both form and substance

• Identify any easy fixes • E.g., definition of “confidential information” includes personnel information

• E.g., absolute prohibition on photography, etc.

• Add examples or context, where possible • E.g., conflicts-of-interest

• If concerned about diluting message/purpose of policy, consider adding disclaimers

• Recognize there may be some business interests you are not willing to compromise (e.g., abusive behavior) - consequence is that challenges will have to go the distance

• Republish as appropriate

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Questions?

Thank You.

Derek Barella Partner, Labor &

Employment Chicago

[email protected]

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