Understanding the NLRB’s New Agenda and How It Affects Non‐Union Employers 

Steve Schuster, Esq.

• This session is being recorded.• You will receive a link to the recording after the webinar.• We will provide the HRCI code at the end of the webinar.

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NLRB - Update

Report of the General Counselon NLRB Case Developments

Related to “Rules” Cases

A Warning to All Non-Union Employers

Rules Case Update

On March 18, 2015, the top lawyer for the National Labor Relations Board (NLRB),

Richard Griffin, Jr., Issued a Report Intended to Provide “Guidance” to

Employers on Recent Case Developments on the Board’s View of the Legality (or

Illegality) of Various Employer Handbook “Rules”

It All Starts With the Need to Understand What Are

“Employee Rights” Under Section 7 of the National Labor

Relations Act (NLRA)

So Just What is “Section 7” Activity?• Section 7 of the National Labor Relations Act (NLRA) 

provides that:

(i) Employees have the right to “form, join or assist a labor organization”…in other words…engage in union activity

(ii) Employees can also “join together for the purposes of mutual aid and protection”…otherwise known as “protected concerted activity” (PCA)

• It is the second category…“PCA”…that causes the non‐union employer headaches because “union activity” doesn’t even have to be present for PCA to occur.

It All Starts With“Section 7” Rights

• For the last 10 years the standard for such cases has been established by Lutheran Heritage Village-Livonia (343 NLRB 646 (2004)

• The basic analysis has been whether an Employer’s policies, procedures or work rules “have a chilling effect” on an employee’s right to engage in conduct that is protected (“PCA”) under Section 7 of the NLRA

Rules Cases Update• According to the Lutheran Heritage Village-

Livonia decision, there are two ways that a policy or work rule would violate the NLRA:

1. The “rule” on its face violates the Act by explicitly restricting “protected concerted activity” (PCA), or

2. Even if the “Rule” doesn’t explicitly restrict PCA, the “Rule” would still be unlawful if:

Rules Case Update

(i) Employees would “reasonably construe” the language of the “rule” to prohibit Section 7 activity; or

(ii) The “rule” was promulgated (adopted) in response to union or other Section 7activity; or

(iii) The “rule” was actually applied in a manner to restrict the exercise of Section 7 rights

GC Report – 8 Different Types of “Rules” Discussed

1. Rules Related to “Confidentiality” Issues

2. Employee Conduct Directed at the Company or Supervisors

3. Employee Conduct Directed Towards Co-Workers

4. Employee Interaction With Third Parties

Rules Case Update5. Rules Restricting Use of Company Logos,

Copyrights, and Trademarks

6. Rules Restricting Photography and Recording in the Workplace

7. Rules Relating to, or Restricting Employees From Leaving Work

8. Conflict-of-Interest Rules

Rule Type 1Rules Related to “Confidentiality”

Issues• In general, employees have the right to discuss their

wages, hours and other terms and conditions of employment

• Therefore, an Employer’s policy or work rules cannot:

(i) specifically restrict or prohibit such discussions, or

(ii) be written in a way that employees would “reasonably understand” the rule to prohibit such discussions

Rules Related to “Confidentiality” Issues

In other words, an Employer’s confidentiality “rule” cannot be written in a way that prohibits the discussion of “employee” or “personnel” information

• Ex. Flamingo-Hilton Laughlin, 330 NLRB 287 (1999) (policy required that employees not reveal confidential information regarding customers, fellow employees, or hotel business—unlawful)

• Ex. Flex Frac Logistics, L.L.C., 358 NLRB No. 127 (2012), enf’d, __ F.3d __ (5th Cir. 2014) (policy prohibited disclosure of “financial information including costs” and “personnel information” —unlawful)

• Any policy or rule that prohibits the discussion of wages, benefits or other terms and condition of employment…….is unlawful

Rules Related to “Confidentiality” Issues

Muse School Case Study• Director James Cameron (of Titanic and Avatar fame) started a private

school geared towards children of celebrities and wealthy families in Southern California.

• In order to protect the identity and the confidentiality of the school’s children (and families), the Muse School required all employees to enter into strict Confidentiality/Non-Disclosure agreements.

• When the Muse School tried to enforce such an agreement against a former teacher at the school who was complaining about the low wages and bad working conditions at the school, the former teacher filed a Charge with the NLRB.

• NLRB determined the Confidentiality/Non-Disclosure agreement was unlawful (too broad), and the school’s attempt to enforce it was unlawful as well.

Rules Related to “Confidentiality” Issues

• The key for a “rule” of this type is to properly distinguish between an Employer’s “substantial and legitimate” interest in protecting the privacy of certain business information

• The “rule” must be written in a way that avoids a conclusion by the Board that it is overbroad or ambiguous in a way that the “reasonable employee” would interpret the rule to preclude Section 7 activity

Rule Type 2Employee Conduct Directed at the

Company or SupervisorsThe NLRB says that employees have the right to criticize or protest against their employer or the employer’s treatment of employees

Thus, a “rule” cannot generally prohibit employees from being:

- “disrespectful”- “negative”- “inappropriate”- “rude”

Employee Conduct Directed at the Company or Supervisors

Unless there is sufficient clarification or context:

See Casino San Pablo, 361 NLRB No. 148 (2014) (rules prohibited false, fraudulent, or malicious statements and insubordination and “other disrespectful conduct”—unlawful)

See Southern Maryland Hospital Center, 293 NLRB 1029 (1989), enf’d, 916 F.2d 932 (4th Cir, 1990) ( policy prohibiting derogatory attacks on fellow employees, or hospital representatives—unlawful)

Rule Type 3Employee Conduct Directed Towards

Co-Workers• NLRB says employee discussions, arguments,

debates about unions and their working conditions are often “contentious”

• Supreme Court even acknowledged that such conversations between employees frequently become “intemperate” and even “abusive”

- See Linn v. United Plant Guard Workers, 383 U.S. 53 (1966)

Employee Conduct Directed Towards Co-Workers

• The NLRB says any employer policy or work “rule” that bans “negative” or “inappropriate” discussions between employees is unlawful because such a “rule” interferes with Section 7 rights

- See Hills & Dales General Hospital, 360 NLRB No. 70 (2014) - Policy requiring that employees “will not make negative comments about fellow team members,” and “will not engage or listen to negativity,” and will represent the employer in the community in a “positive and professional manner” – Found unlawful.

- See Claremont Resort & Spa, 344 NLRB 832 (2005) - Rule prohibiting negative conversations about associates or managers – Found unlawful.

Employee Conduct Directed Towards Co-Workers

• Examples of unlawful policy language:– “Don’t pick fights on-line”– “Do not make ‘insulting,’ ‘embarrassing,’ ‘hurtful’ or ‘abusive’

comments about the Company or your co-workers on-line”– “Do not send ‘unwanted,’ ‘offensive’ or ‘inappropriate’ e-mails.”– “Material that is….. ‘intimidating’….may not be sent by e-mail…..”

• All of the “rules” listed above were found by the Board to be unlawful because they were deemed as being “too vague,” “overbroad” or “ambiguous”

• An employee may “reasonably” read such rule as to prohibit them from engaging in activity covered by Section 7 of the NLRA

• Triple Play Sports Bar & Grill, 361 NLRB No. 31 (2014) (internet/blogging policy cautioning employees from engaging in inappropriate discussions about the company, management, and co-workers—unlawful)

Employee Conduct Directed Towards Co-Workers

• Lafayette Park Hotel, 326 NLRB 824 (1998), enf’d, 203 F.3d 52 (D.DC 1999) - Rule prohibiting employees from making false, vicious, profane, or malicious statements toward the company, the employer or any employees –Found unlawful.

• 2 Sisters Food Group, 357 NLRB No. 168 (2011) - Rule requiring employees to work harmoniously with other employees – Found unlawful.

• HTH Corp., 356 NLRB No. 182 (2011), enf’d, 693 F.3d 1051 (9th Cir. 2012) - Rule prohibiting derogatory statements about employees, supervisors, or employer –Found unlawful.

Rule Type 4Employee Interaction With 3rd Parties

• Under Section 7, employees have the right to communicate with the news media, government agencies and other “third parties” about their wages and working conditions

• Handbook rules that restrict such behavior are therefore unlawful

• Most common offenders in this area are employers who have “media” policies (social or otherwise)

Employee Interaction With 3rd

Parties• Examples of unlawful policy language:

– “Employees are not authorized to speak to any news agency about ‘company matters’”

– “Employees are not permitted to speak to a news reporter about Company business”

– “Employees are not permitted to speak to any news agency about the Company without first receiving permission to do so”

• All of the policies listed above are considered to interfere with employee conduct permitted under Section 7 of the NLRA

Employee Interaction With 3rd

Parties• Trump Marina Associates, 354 NLRB 1027 (2009),

adopted, 355 NLRB 585 (2010), enf’d, 435 F. Appx. (DC Cir. 2011) - Rule prohibited releasing statements to the news media without prior authorization –Found unlawful.

• Crown Plaza Hotel, 352 NLRB 382 (2008) - Rule prohibiting employees from talking to the press –Found unlawful.

• HTH Corp., 356 NLRB No. 182 (2011), enf’d, 693 F.3d 1051 (9th Cir. 2012) - Rule prohibiting employees from sharing information with the media –Found unlawful.

Rule Type 5Rules Restricting Use of Company

Logos, Copyrights, and Trademarks• Even though the NLRB recognizes that copyright holders have a clear

interest in protecting intellectual property, a workplace policy or rule cannot prohibit an employee from the “fair” and “protected” use of that property

• For instance, a company’s name or logo is usually something that is protected by intellectual property laws, but employees have a right to use that name or logo…or other trademark…on signs, leaflets and other “protest material” when working conditions are the subject of the so-called “protest”

- See - Pepsi-Cola Bottling Co., 301 NLRB 1008, enf’d, 953 F.2d 638 (4th Cir. 1992) - Rule prohibiting wearing company uniforms during union activity – Found unlawful.

- See - Spirit Construction Service, 351 NLRB 1042 (2007) – Rule requiring removal of company logo sticker from hardhat during protected activity – Found unlawful.

Rules Restricting Use of Company Logos, Copyrights, and Trademarks

Examples:– “Do not use any Company logo, trademark, graphic or other Company

material when posting on-line”

– “Do not use ‘other people’s property’ such as trademarks or logos, without permission”

– Use of the Company’s name, address or other information is banned. This includes logos, trademarks or other copyrighted material

• The NLRB would view such policies or work rules as being “overbroad” or “too vague”

• See Kroger Co., 1999 LRRM 1319 (Div. of Judges, 2014) (online communications policy prohibited use without permission of company intellectual property assets (like copyrights, trademarks, patents, or trade-secrets – including Kroger or banner logos)—unlawful)

Rule Type 6 Rules Restricting Photography and

Recording in the Workplace• NLRB says that employees have the right to photograph or make recordings

in furtherance of conduct protected by Section 7

• See White Oak Manor, 353 NLRB 795, adopted, 355 NLRB 1280 (2010), enf’d, 452 F. Appx. 374 (4th Cir. 2011) (photographing which is part of res gestae of concerted activity is protected)

• Rules placing a “total ban” on such activity are unlawful to the extent that a “reasonable employee” would read and interpret such a “rule” in a way that limits their rights under the NLRA

• If the rule places “reasonable” limits on such activity, in a way that the employer is protecting legitimate confidential or proprietary information, then such a policy would be lawful

• See Hawaii Tribune-Herald, 356 NLRB No. 63 (2011), enf’d, 677 F.3d D.C. Cir. 2012) (rule prohibiting employees from secretly recording conversations, that was promulgated in response to union organizing—unlawful)

Rules Restricting Photography and Recording in the WorkplaceBoeing Case Study – A seemingly valid “No Photograph/No Video” policy didn’t hold up when the facts came out:

• Policy required approval of the Company’s security department before photos/video could be taken

• Employees who photographed/videoed a union demonstration in the plant were found in violation of the policy

• Facts developed during NLRB hearing revealed that members of the general public were allowed to take photos/video during public tours of the plant

Rules Restricting Photography and Recording in the WorkplaceBottom Line: • Employer must have a strong legal basis or

business reason for a ban on photos/videos to outweigh Section 7 rights.

• Rule that prohibits photos/videos from being taken in work areas containing trade secrets or other proprietary information is permitted.

Rule Type 7Rules Relating to, or Restricting Employees

From Leaving Work

• NLRB says employees (both union and non-union) have the right to engage in a strike

• If a policy or work rule “regulates” when employees can leave work in a way that would preclude or interfere with the “right to strike,” then such a rule would be unlawful

• If however, the rule does not specifically preclude “strikes,” “walkouts,” “work disruptions” or “walking off the job,” then the rule will be unlawful

Rules Relating to, or Restricting Employees From Leaving Work

Compare Purple Communications, Inc., 361 NLRB No. 43 (2014) (rule prohibiting employees from causing, creating, or participating in a disruption of any kind during working hours on company property – unlawful) and Labor Ready, Inc., 331 NLRB 1656 (2000) (rule stating that employees who walk off the job will be discharged—unlawful) with 2 Sisters Food Group, 357 NLRB No. 168 (2011) rule prohibiting leaving plant during a work shift without a supervisor’s approval—lawful)

Rule Type 8“Conflict-of-Interest” Rules

• Under the NLRA, Employees have the right to “protest,” “organize,” “boycott,” and otherwise “generally complain”about their employer if such activity is related to wages or working conditions

• Thus, an employer’s policies or work rules cannot be written in a way that would interfere with this protected activity

Conflict-of-Interest RulesExamples:

– “Employees may not engage in ‘any action’ that is not in the best interest of the Company”

– “Employees shall not engage in any protest that may reflect poorly on the Company”

– “Employees should not do anything that might damage or harm the reputation the Company”

The examples above were considered to be too vague or “overly-broad” in a way that an employee may reasonably read such rule as to limit their right to engage in protected activity

See HTH Corp., 356 NLRB No. 182 (2011), enf’d, 693 F.3d 1051 (9th

Cir. 2012) - Conflict of interest policy informing employees that discouraging potential or actual customers will be considered a serious act of disloyalty—Found unlawful.

Your Employee Handbook is Probably Unlawful -So What Can

Employer Do?• First step is to have your Employee Handbook or written

work rules reviewed and revised (if necessary) by experienced legal counsel, in order to comply with the NLRB’s view of the workplace.

• Avoid policy or work rule language that is vague or too broad.

• Make sure policies and work rules are specific enough that the “reasonable employee” could not read or interpret the “rules” in a way that interferes with…or “chill”… Section 7 rights.