Alerts and Updates

NLRB General Counsel Gives Employers Green Light to Restore Handbook Policies on Discipline and Productivity in the Workplace

June 11, 2018

While the new standards by which handbook rules will be judged are more balanced and “employer friendly,” they are heavily nuanced, and employers are warned against creating rules without determining, in each case, what legitimate business purpose is being served. 

As reported in our previous Alert, the National Labor Relations Board in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), established new standards for interpreting handbook rules. The focus of the new standards is on balancing the rule’s negative impact on employees’ protected rights against the employer’s right to maintain discipline and productivity in the workplace. On Wednesday, June 7, 2018, the Board’s General Counsel, Peter Robb, issued guidance to all Regional Directors, Officers in Charge and Resident Officers of the Board with regard to the application of the Board’s new standards (Memorandum GC 18-04). This guidance will govern the enforcement decisions of the regions, particularly in unfair labor practice cases, and, for that reason, is particularly important.

In GC 18-04, the General Counsel interprets the new standards expansively, noting that, in Boeing, the Board overturned the Obama Board’s presumption that ambiguities in rules should be interpreted against the employer and announced that, going forward, the Board would use an analytically more balanced approach in deciding whether a handbook rule violates the law. 

In explaining how the new standards should be applied, the General Counsel enumerated several types of rules that are generally lawful “either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the Act, or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the rule.” When considering an unfair labor practice charge implicating a rule in this category (Category 1), the General Counsel instructs the Field Offices that charges based solely on the rule itself should be dismissed administratively. The following rules would be in this category:

  • Civility rules, e.g., rules that prohibit conduct that impedes harmonious interactions and relationships, such as those that are rude, condescending or otherwise socially unacceptable, are negative or disparaging of other employees, including offensive language, gossip, name-calling, posting of statements, photographs, video or audio that disparage other employees.
  • No-photography or no-recording rules, e.g., rules that prohibit audio and video recording of conversations with co-workers, managers or third parties, phone calls or company meetings without prior approval.
  • Rules against insubordination, non-cooperation or on-the-job conduct that adversely affects operations, e.g., being uncooperative with supervisors, lack of cooperation with fellow employees or guests, engaging in conduct that does not support the employer’s goals and objectives.
  • Disruptive behavior rules, e.g., boisterous or disorderly conduct. Note: Rules that prohibit core protected rights, including disruptive acts such as concerted walk-outs, protests, picketing, presentation of petitions or grievances continue to be unlawful.
  • Rules protecting confidential, proprietary and customer information or documents, e.g., confidential financial data or information regarding the employer’s business, business partners or customers.
  • Rules against defamation or misrepresentation, e.g., defamatory emails about products or customers, misrepresentations about products, services or employees. Note: Rules that prohibit critical comments about the employer, as an employer, and in the course of protected activity will continue to be unlawful.
  • Rules against using employer logos or intellectual property, e.g., rules that prohibit the use of employer logos and intellectual property for personal gain.  Note: A blanket prohibition of use of logos or the fair use of intellectual property, even on picket signs or in leaflets, would continue to be unlawful.
  • Rules requiring authorization to speak for the company. Note: Rules that prohibit an employee from speaking critically about the company to a third party continue to be unlawful, unless the employee suggests that the statements are being made on behalf of or are approved by the company. 
  • Rules banning disloyalty, nepotism or self-enrichment. Note: Where a rule would go beyond prohibiting conduct that involves a conflict of interest for personal gain, its validity would require individual scrutiny.   

CAUTION: The General Counsel added the following cautionary statements when considering whether a rule is facially lawful (Category 1), requires individual scrutiny (Category 2) or is facially unlawful (Category 3):

  • In some cases, the Board has already struck a balance between employee rights and employer business interests. In those cases, the Board’s determinations continue to be the law, e.g., no-distribution, no-solicitation and no-access rules.
  • In some cases, the Board has already determined that certain rules require individual scrutiny because of “special circumstances,” e.g., apparel rules.
  • Rules that prohibit protected concerted activity or are promulgated in response to union organizing remain unlawful.
  • Facially lawful rules may be unlawful in their application.
  • The Board has not yet determined the effect of Boeing on rules regarding the confidentiality of discipline or arbitration or rules that potentially limit employee access to Board processes.

What This Means for Employers

While the new standards by which handbook rules will be judged are more balanced and “employer friendly,” they are heavily nuanced, and employers are warned against creating rules without determining, in each case, what legitimate business purpose is being served. The application of any rule against any person who is engaged in protected conduct may require the employer to demonstrate that the business justification for the rule was not only legitimate but also the motivating reason for the application. Employers who consciously consider the business justification for each of their rules of conduct at the time the rule is constructed will be greatly advantaged when the application is challenged. 

Employers who modified their handbooks in response to the Obama Board’s interpretation and expansion of the Board’s earlier decision in Lutheran Heritage-Livonia, 343 NLRB 646 (2004), may want to review their policies in light of Boeing and the GC’s guidance in order to strengthen conduct rules necessary to maintain discipline and improve productivity.

For Further Information

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.