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NLRB Counsel Issues Guidance On Handbook Rules

Volume 17, Issue 12
June 18, 2018

On June 6, 2018, the General Counsel for the National Labor Relations Board (NLRB or Board) issued to its Regional Directors a Guidance on Handbook Rules. This Guidance is extremely helpful for all employers in assessing and reviewing handbook rules because it provides specific instruction on how the Board will apply the new standard adopted in the December 2017 case of The Boeing Company, 365 NLRB No. 154. We discussed Boeing in Volume 16, Issue 23 of the KZA Employer Reports.

In Boeing, the NLRB adopted a new test for analyzing whether an employer's rule is unlawful under the National Labor Relations Act (NLRA). Under this new test, the Board established three categories of rules: Category 1 rules are those that are lawful for an employer to use; Category 2 rules warrant a case-by-case scrutiny; and Category 3 rules are unlawful to use.

The General Counsel's Guidance provides much needed instruction on which rules fit into these three categories. Moreover, in applying the new Boeing test, it specifically eliminates the hostility the Board has previously maintained toward many commonsense rules used by employers.

This Guidance on employee handbook rules applies to most private-sector employers as most are covered by the NLRA. Just because a workplace may not have a union already in place, the employer is still subject to liability under the NLRA for maintaining rules that violate the NLRA or for applying rules in an unlawful manner. Indeed, as you review the categories below, keep in mind that the Board is simply outlining when a rule will be deemed lawful on its face - in other words, when it is lawful for an employer to use a specific rule in its handbook. Employers can still be liable for a NLRA violation if they apply a lawful rule in a manner that prohibits or interferes with employees' rights to engage in protected concerted activity.

Category 1 Rules - Generally Lawful

Rules in this category are generally lawful either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule. The General Counsel explains that the following rules constitute Category 1 Rules and should, in most circumstances, be deemed lawful:

  • civility rules that prohibit rude and discourteous behavior and negative, disparaging or offensive comments;
  • no-photography rules and no-recording rules that prohibit employees from recording conversations, phone calls, images or company meetings;
  • rules against insubordination, non-cooperation or on the job conduct that adversely affects operations;
  • rules against disruptive or boisterous behavior or disorderly conduct;
  • rules protecting confidential, proprietary, and customer information or documents;
  • rules against defamation or misrepresentation;
  • rules against using employer logos or intellectual property;
  • rules requiring authorization to speak for the company; and
  • rules banning disloyalty, nepotism or self-enrichment.

Category 2 Rules - Case by Case Determination

Category 2 rules "are not obviously lawful or unlawful, and must be evaluated on a case-by-case basis to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications." The General Counsel instructs that Category 2 rules are:

  • broad conflict of interest rules that do not specifically target fraud and selfenrichment and do not restrict membership in, or voting for, a union;
  • broad confidentiality rules encompassing "employer business" or "employee information" (as opposed to confidentiality rules focusing on customer or proprietary information);
  • rules regarding disparagement or criticism of the employer (as opposed to civility rules regarding disparagement of employees);
  • rules regulating the use of the employer's name (as opposed to rules regulating use of the employer's logo/trademark);
  • rules restricting employees from speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer's behalf);
  • rules banning off duty conduct that might harm the employer (as opposed to rules banning insubordinate or disruptive conduct at work); and
  • rules against making false or inaccurate statements (as opposed to rules against making defamatory statements).

Category 3 Rules - Unlawful

Category 3 rules are those that the Board designates as unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule. These are:

  • confidentiality rules specifically regarding wages, benefits or working conditions such as those that prohibit employees from discussing or disclosing wages or terms and conditions of employment; and
  • rules against joining outside organizations or voting on matters concerning the employer.

With regard to Category 3 rules, the General Counsel explains that "[m]ost discussions of wages and benefits will likely be protected and concerted" and that "discussions and coordination between employees, unions, and others regarding working conditions and wages is a core NLRA right." Because these types of rules have a "serious adverse impact on the central NLRA right of employees to contact one another and discuss working conditions and employment disputes," these types of rules are "always unlawful."

The General Counsel's Guidance is certainly welcome news for employers because it allows an employer to once again use rules that are important to maintaining order, creating a productive and safe workplace, and protecting its legitimate interests. However, applying the Board's new categories still requires the employer to carefully consider the justifications for its rules and to ensure that each rule used is narrowly crafted to avoid impacting employees' rights under the NLRA. We encourage all employers to carefully review this Guidance.

If you require assistance with applying this new standard to your employee handbooks or have questions about this Guidance, please contact a KZA attorney.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.