Employment Law Update Part Two: Labor Relations Board Issues Memorandum that Provides Helpful Guidance on the Legality of Common Employment Handbook Policies


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     This is the second blog in a two-part series, addressing the June 6, 2018, National Labor Relations Board’s (“NLRB”) General Counsel Memorandum, Memorandum GC 18-04 (“Memorandum 18-04”). Memorandum 18-04 provides guidance to employers on the legality of certain employment handbook rules, based on the NLRB’s ruling in an action involving the Boeing Company. See 365 NLRB No. 154 (Dec. 14, 2017).

The Boeing Standard on Permissible Employee Handbook Rules

     In Boeing, the NLRB overruled the Lutheran Heritage standard and issued a new test to balance the impact a rule may have on employees’ Section 7 rights with the employer’s business justifications for the rule. The Board noted that work rules will likely fall into three categories:

  • Category 1 Rules: which includes rules that the Board deems to be presumptively lawful;
  • Category 2 Rules: meaning rules that require individualized scrutiny by the NLRB to determine if the rules are lawful; and,
  • Category 3 Rules: meaning rules designated by the Board as being presumptively unlawful.

     Although the Boeing decision offered some useful guidance for employers regarding the no-camera rule at issue there, Boeing did not provide much guidance to employers on how the NLRB would categorize other common policies. Fortunately, however, Memorandum 18-04 fills this gap by providing specific examples of various common workplace policies that fall within each of the three new categories announced in the Boeing case.

     In our prior blog in this two-part series, we summarized and provided insights on Memorandum 18-04’s clarifications regarding which common workplace policies would be considered Category 1 rules.  Notably, Memorandum 18-04 provided a significant list of examples regarding Category I policies, which the NLRB advises will be presumed lawful when used in employment handbooks. But, there are far less policy types identified that will be found to be presumably unlawful—which is generally a good thing.

     Notably, each of the examples of unlawful category policies address the same general idea of policies that specifically restrict employees from speaking out about certain employment topics. The Memorandum provides guidance on the following types of policies that would fit into Category 3:

Category 3 – Rules that are unlawful to maintain.

  1. Any confidentiality rules specifically regarding wages, benefits, or working conditions (for example, a rule stating that employees are prohibited from disclosing salaries or the contents of employment contracts is unlawful); and
  2. rules that prohibit employees from joining outside organizations or voting on matters concerning the employer.

     Conversely, the Category 2 references in the Memorandum relate to the issues that are more factually nuanced and will be considered on a case-by-cases by the NLRB. The Memorandum lists the following as Category 2 rules:

Category 2 – Rules that require an evaluation of the rule on a case-by-case basis, which include:

  1. “Broad conflict-of-interest rules that do not specifically target fraud and self-enrichment . . . and do not restrict membership in, or voting for, a union.”
  2. Confidentiality rules broadly encompassing ‘employer business’ or ‘employee information’ (as opposed to confidentiality rules to protect proprietary information (allowed), or confidentiality rules that are improperly specifically directed at employee wages, terms of employment, or working conditions (not allowed)).
  3. Rules regarding disparagement or criticism of the employer (which may sometimes reflect employees engaging in concerted activity to improve working conditions (protected activity), as opposed to generally lawful civility rules regarding disparagement of other employees).
  4. Rules regulating use of the employer’s name (may be too broad in some instances, as opposed to rules regulating the employer’s logo/trademark, which is a de facto lawful Category 1 rule).
  5. Rules that broadly restrict employees from speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf, which are lawful).

     The NLRB’s clarifications regarding the above list of rules provides employers with some helpful clarity. Employers should consult the above list when evaluating your employee handbook, along with discussing those issues with your legal counsel.

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     The Nardone Limited employment attorneys handle a full spectrum of employment law issues, including business disputes and litigation, drafting of employment and restrictive covenants, and consultation on all types of employment law issues. If your business needs advice or representation on an employment dispute before the EEOC, the OCRC, or regarding potential employment litigation, contact one of our employment attorneys. Further, feel free to contact Nardone Limited if you would like more information or consultation regarding any employment law issue.