United States: New Light On Handbooks And Work Rules

Last Updated: August 8 2019
Article by Edward F. Harold and Clyde H. Jacob III

During the Obama administration, the National Labor Relations Board (NLRB) rocked the HR world for employers, both union and non-union, by interpreting federal law to create broad restrictions on employer work rules, social media policies, trade secret and confidentiality policies, and employee handbooks generally. If a rule or a policy had any "chilling effect" on an employee's rights with respect to wages, benefits, terms and conditions of employment, and protected concerted activity, the Board would find that it violated the National Labor Relations Act (NLRA).

Employers were routinely charged with unfair labor practices for policies as simple as requiring employees to treat each other with respect or not use foul language. This stance was particularly harmful for retailers whose policies and practices are often intertwined with practices designed to deter theft and protect customers. For example, a "no cell phone" policy is not just designed to prevent employee distraction, but also to prevent unscrupulous employees from taking pictures of customer credit cards.

Light At The End Of The Tunnel: Board Changes Gears

Fortunately, in late December 2017, the NLRB reversed its course and jettisoned the speculative "chilling effect" standard. In its place, the NLRB established a balancing test as to work rules and policies, weighing an employer's interest in maintaining the rules against their effects on workers' rights to engage in concerted activity:

When evaluating a facially neutral policy, rule, or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the NLRB will evaluate: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.

The NLRB further identified three categories in which rules and policies would fall: (1) presumptively valid; (2) requiring individual scrutiny; or (3) presumptively invalid. The NLRB made clear, however, that this test was for considering an employer having a rule, not for considering whether applying a rule to an employee was an unfair labor practice. Even rules that are lawful to maintain can be applied in a discriminatory fashion.

Shedding New Light: Board Releases Advice Memos

Within the past few months, the NLRB's Division Advice—which answers legal questions posed by the agency's regional officials about active cases—issued two guidance memoranda that applied the new balancing test. These memoranda addressed a variety of rules employers commonly maintain. Here is a listing of the decisions made in the advice memoranda and our comments on the practical impacts of each.

  1. A rule that employee handbooks and their contents are confidential and may not be disclosed to third parties violates the Act, unless tailored to protect specific employer proprietary information unrelated to terms and conditions of employment.

    The Advice Division concluded that a rule making an employee handbook confidential was a Category 3 rule—presumptively invalid. An employee's ability to discuss the terms and conditions of employment with third parties such as unions is considered a core protected right necessary to employees' abilities to exercise their NLRA rights. The memorandum gave virtually no weight to the employer's justification that it was trying to prevent the handbook from being provided to a business competitor.

    It noted that if an employee handbook contained confidential and proprietary information, the employer could maintain a rule to protect those identifiable pieces of information. But in the case before it, the handbook did not contain any such information. If a realistic concern exists that a business competitor obtaining your employee handbook could cause harm, then a limited rule applying to disclosure to business competitors would be more appropriate.

  2. A rule restricting workers' non-business use of company email violates the law since it extends to non-working time, and an "incidental personal use" provision did not cure the violation.

    One decision employers are hoping will be reversed under the new NLRB is the one holding that neutral policies prohibiting employee use of company email for personal business were unlawful (Purple Communications). To date, however, that has not happened. Therefore, the memorandum noted that because the "no personal email" rule was maintained by an employer whose employees worked remotely with no ability to converse face-to-face, and there was no established workplace to exchange personal contact information, the rule violated the Act.

    Under these circumstances, the rule was significantly impeding the employees' core right to communicate among themselves regarding the terms and conditions of employment. It further noted that a provision of the rule prohibiting communications that were "not in support of the employer's objectives" was too broad, and thus illegal, because union organizing activity or workplace protests could clearly be considered against an employer's objectives. Also fatal to the employer's rule is that it applied too broadly to all time at work, including non-working time such as breaks and lunch.

  3. A rule restricting disclosure of payroll information violates the law since its context did not indicate that it referred to some aspect of the employer's payroll system other than wages and benefits.

    The interesting aspect of this decision is that the rule being considered was not one prohibiting discussion of wages among employees—an always impermissible rule—but instead one that prohibited disclosure of confidential trade secret information including processes, designs, customer lists, profits, and costs. The problem found by the memorandum was the inclusion of the word "payroll" in the listing.

    While the employer claimed that the inclusion of "payroll" was to prohibit its competitors from obtaining its payroll information and did not apply to discussions of employees about their wages with unions, the rule on its face was quite broad. The memorandum noted that the rule would have been permissible had the word "payroll" been excised, as confidentiality of trade secret information had no impact on protected rights.

  4. A rule requiring employees to cooperate with company investigations does not violate the law where it did not reference unfair labor practice charges or government regulations.

    The advice memorandum said the rule is legal because a reasonable reading of the rule by employees is only asking them to cooperate with workplace misconduct investigations. The memorandum concluded that rules requiring employees to participate in company investigations fell into the second category of rules that must be assessed on a case-by-case basis. It noted that an employee cannot be legally compelled to participate in an employer's investigation of an unfair labor practice, and noted that in prior cases, rules that referenced investigations into violations of government regulations went too far by not recognizing this.

    But the rule in question did not reference any form of government investigation or violation of any occurrence other than company policies, such as harassment and discrimination. Under these circumstances, it concluded that the rule could only be reasonably read to require employees to cooperate in investigations of misconduct and did not violate the Act.

  5. A rule that employees not wear items of apparel "with inappropriate commercial advertising or insignia" is legal. The memo found that it was not reasonable for employees to read the rule as outlawing items bearing union logos (which would violate the NLRA), especially in the context of the many other professional, business-like appearance requirements of the rule.

      The rule addressed by the memorandum was a comprehensive business dress policy that identified 22 ways in which dress might not be professional such as being dirty, transparent, comprised of beach or athletic wear, or too revealing. The memorandum concluded that under these circumstances, the challenged provision that prohibited only "inappropriate commercial advertising or insignia" could not be reasonably read to prohibit union buttons or other references to the union. Instead, it noted that by including the term "inappropriate," the employer intended to prohibit items that might have violated its other policies such as sexually suggestive or racially derogatory depictions.

  6. A rule requiring workers to exercise a "high degree of caution" when handling specific sensitive information, and allowing only certain spokespeople to be the employer's public communicator was found to be legal. The rule only restricted employees who have access to the information as part of their jobs, and the rule merely regulated who may speak on an employer's behalf.

    Employees have the right under federal labor law to disseminate information about co-employees to third parties such as unions, including names and addresses. The rule at issue prohibited employees who, as part of their job, had access to confidential information about co-employees from revealing that information. It defined confidential information to include "name, address, social security, credit card, and bank account numbers, and similarly personally identifiable information." Because the prohibition only applied to information coming from the employer's files, and not information that employees gathered on their own, the memo concluded it could not reasonably be read to restrict employee rights.

  7. A rule restricting employees from using their personal cell phones during "working hours" violated the law since employees have the right to communicate with each other through non-employer monitored channels during lunch or break periods.

    Cell phones have become an increasingly common source of concern by employers due to the relative ease with which workers can use them to engage in non-work activities. Employers have the ability to lawfully require employees to stay off their cell phones while engaged in work activities. However, the key problem with the rule at issue was that it made the prohibition "during work hours."

    In other contexts, the NLRB has concluded that the term "work hours" includes breaks and meal times. Because employees have the right to discuss the terms and conditions of employment with each other during these times, prohibiting the use of cell phones during these times was found to be overly broad. "No cell phone use" policies should make clear that the prohibitions do not apply to breaks and non-working time.

Let There Be Light!

The new NLRB balancing test standard, along with these recent Advice Memoranda from the NLRB's General Counsel, signal a new, more common-sense approach to employer policies and work rules. Yet the memoranda indicate that even with the new balancing test, many employers still have HR policies, work rules, social media policies, and confidentiality or trade secret policies that violate the law. There is no substitute for a regular review by your legal counsel—at least annually—of your policies and rules. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions