NLRB Targets Employee Handbooks

In a recent trend that should concern both union and non-union employers alike, unions have been extremely active in challenging the legality of seemingly innocuous language commonly found in employee handbooks. Of even greater concern is that the National Labor Relations Board's regional offices have been receptive to these challenges. And now, in the recent decision Lafayette Park Hotel, 326 N.L.R.B. No. 69 (1998), the Board in Washington has demonstrated a willingness to scrutinize common handbook and work rule language.

The Board's aggressive stance on handbook issues is not entirely new. Handbook language has served as the basis for unfair labor practice charges and election objections in the past.

  • Confidential Information
    The Board has held that work rules prohibiting the disclosure of confidential or proprietary information are unlawfully overbroad if they can be construed by employees as prohibiting discussion of wage and benefit information. See Steeltech Mfg., 315 N.L.R.B. 213 (1994).
  • Derogatory Statements
    A ban on "derogatory" statements has also been found unlawful. For example, the Board condemned a rule that prohibited "malicious gossip or derogatory attacks" on coworkers or company representatives. The Board held that such a rule could be interpreted as prohibiting truthful union propaganda that places the employer in an unfavorable light. See NLRB v. Southern Maryland Hosp. Center, 916 F.2d 932 (1990).
  • Dress Codes
    A number of Board decisions have also found that overbroad dress codes that could be interpreted as prohibiting union paraphernalia are unlawful. For example, a regional office recently took the position that a rule prohibiting "wearing extreme, unprofessional or inappropriate styles of dress or hair while working" was unlawfully overbroad and could preclude the wearing of union apparel.

A Recent Trend

Only recently, however, has reliance on handbook language to support charges and objections become a common practice and strategy of unions. Moreover, the level of scrutiny has intensified significantly. In some instances, NLRB regional offices have used a union's unfair labor practice charge directed at one handbook provision as a springboard for reviewing the entire handbook, often finding a number of provisions unlawful. Much of the language under attack would seem innocuous to most employers.

  • False Statements
    For example, in Lafayette Park Hotel, one of the rules at issue was a "Standard of Conduct" stating that the following conduct is unacceptable:

Making false, vicious, profane or malicious statements toward or concerning the [hotel] or any of its employees.

The Board ruled that the employer's maintenance of this rule was unlawful, explaining: "[p]unishing employees for distributing merely 'false' statements fails to define the area of permissible conduct in a manner clear to employees and thus causes employees to refrain from engaging in protected activities."

  • Access to Employer Property
    Also at issue in Lafayette Park Hotel was a rule requiring employees to leave the premises immediately after completion of their shift. The Board held that this rule was unlawfully broad because it effectively denied off-duty employees access to the parking lot and other nonworking areas. The employer had argued that the rule was not intended to cover such nonworking areas as the parking lot. However, the Board explained that employees could reasonably read the rule as covering those areas. The Board added that any ambiguity in the rule must be construed against the employer as promulgator of the rule. Significantly, the Board has taken the position that maintenance of these rules alone is unlawful, regardless of whether the rules have been enforced or how they have been enforced.

It is important to note that two of the five Board members in Lafayette Park Hotel would have found a number of other handbook policies unlawful. For example, the Hotel's "Rules of Conduct" also provided that the following was unacceptable:

Being uncooperative with supervisors, employees, guests and/or regulatory agencies or otherwise engaging in conduct that does not support the [hotel's] goals and objectives.

Unlawful or improper conduct off the hotel's premises or during non-working hours which affects the employee's relationship with the job, fellow employees, supervisors, or the hotel's reputation or good will in the community.

The minority would have found these rules unlawful as well, reasoning that employees might fear that the employer would use these policies to punish them for engaging in protected activity. This minority view may soon be the majority view when the current vacancy on the Board is filled.

It is the NLRB's regional offices, however, which have led the attack on employee handbooks, often issuing complaints on even the most common handbook language.

  • Alternative Dispute Resolution Policies
    Of particular interest to employers is that binding alternative dispute resolution policies have been targeted. Several regional offices have taken the position that such policies are overbroad and unlawful if they do not explicitly permit the filing of administrative charges.
  • Internal Problem Resolution Procedures
    Internal problem resolution procedures have also been found unlawful to the extent that they limit an employee's ability to air concerns externally.
  • Off-Duty Misconduct
    Many regional offices have taken the position that rules prohibiting off-duty conduct that "may reflect unfavorably on the employer" or that "create a conflict of interest," could be interpreted as unlawfully precluding protected union-related activity.
  • On-Duty Misconduct
    Likewise, many rules relating to on-duty misconduct have been scrutinized. For example, a number of regional offices have taken the position that a prohibition on "offensive" behavior is too vague and ambiguous, and could be interpreted by employees as including protected activity. These are just a few examples of the type of seemingly innocuous language that the Board has targeted.

Potentially Broad Ramifications For Both Union And Non-Union Employers

The Board's recent trend of scrutinizing handbook language and work rules should not be taken lightly. It may have a profound impact on both union and non-union employers. For example, for non-union employers, unlawful handbook language may be the difference between winning or losing a union campaign. An election result in favor of an employer may be overturned as a result of objections to the election premised on handbook language. Indeed, when combined with other unlawful conduct, improper handbook language may result in a bargaining order, requiring the employer to recognize and bargain with the union despite the fact that the employer won the election. In addition, pre-election objections based on improper handbook language may result in the Board's awarding the union special access rights to the employer's property during the weeks preceding the election.

Union employers could be affected as well. For example, an unlawful handbook provision could help the union turn an economic strike into an unfair labor practice strike. This is significant, as an employer is entitled to permanently replace economic strikers, but may not permanently replace unfair labor practice strikers.

As a result of this recent attack on employee handbook language, we strongly encourage all employers to review carefully their current policies and work rules. Removing or changing a few words in an employee handbook may go a long way toward avoiding an unfair labor practice charge or an objection to an election.

*article courtesy of Littler Mendelson

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