Employers Can Chill: Facially Neutral Policies are Back

Dec. 18, 2017

Over the last several years, the National Labor Relations Board has made a number of pronouncements that have hamstrung employers in their efforts to implement reasonable workplace policies and procedures governing expectations regarding their employees’ conduct and behavior. These Board actions had broad implications in all workplaces, not just those involving unionized employees. These pronouncements sent HR departments in businesses of all sizes scrambling to amend workplace policies and employee handbooks to ensure they were compliant with Sections 7 and 8 of the National Labor Relations Act.

Last week, the Board reversed course on the cloud that for 13 years hung over policies that the Board deemed could possibly be “reasonably construed” by an employee “to prohibit or have a “chilling effect” on an employee’s Section 7 rights.

What are Section 7 Rights?

Section 7 guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.” Section 8(a)(1) makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7.”

The “Reasonably Construed to Chill” Standard

In 2004, the Board decided Lutheran Heritage Village-Livonia, ruling that if an employer’s policies could be “reasonably construed” by an employee to prohibit or chill the employees’ exercise of Section 7 rights, the mere existence of the policy violated the NLRA. This was the case even if such policies did not explicitly prohibit protected activities or were not applied by the employer to restrict such activities.

A series of Board rulings and memos from the NLRB’s Office of General Counsel deemed certain language in employer policies unlawful even when facially neutral on their face, including policies on confidentiality, non-disparagement, recording and video at work, use of social media and company logos, and other typical employment rules. The Board’s enforcement policy became clear that if a work rule, policy or procedure could possibly be “reasonably construed” by an employee to prohibit or chill the employee’s exercise of his or her Section 7 rights, the mere existence of the policy was a violation of the NLRA. For years, management-side labor and employment lawyers cried foul at what only could be regarded as a hyper-sensitive construction of the Act.

Consequently, a series of Board rulings deemed unlawful numerous facially neutral policies on protection of confidential information, a respectful workplace, non-disparagement, employee behavior, making recordings and video at work, use of social media and company logos, and other typical employment rules.

Common-Sense Policies Deemed Chilling

The ridiculous lengths to which this mindset extended were illustrated in two related Board decisions handed down in the Spring of 2016, T-Mobile USA, Inc. and Communications Workers of America, et al, and MetroPCS Communications, Inc. and Communications Workers of America. In those cases, the Board struck down over a dozen workplace rules because employees could construe the language in the rules as chilling their rights under Section 7 of the NLRA.

In reliance on its “reasonable construction” policy, the Board found as ambiguous, and therefore overbroad under the NLRA, the following:

  • A requirement that employees “maintain a positive work environment by communicating in a manner that is conducive to effective working relationships with internal and external customers, clients, co-workers, and management;”

  • A prohibition against using company information or communication resources “in ways that could be considered disruptive, offensive, or harmful to morale;”

  • A prohibition against using the employer’s information or communication resources “to advocate, discourage, or solicit for political causes or non-company-related outside organizations;”

  • A prohibition against permitting “non-approved individuals access to information or information resources, or any information transmitted by, received from, printed from, or stored in these resources” without prior written approval of the employer;

  • A prohibition against arguing with co-workers, subordinates, or supervisors;

  • A prohibition against failing “to treat others with respect” and failing to demonstrate “appropriate teamwork,”

  • The designation of the employee handbook as a confidential and proprietary document;

  • The requirement that employees maintain the confidentiality of the names of employees involved in internal investigations;

  • The non-exclusive imposition of a requirement that employees notify the employer if the employee believes he or she was not properly paid wages, or was required to miss a meal or rest period (deemed invalid because it not did not also advise that employees may also seek outside recourse);

  • The requirement to refer all media inquiries to the company without comment (deemed invalid because it did not exclude inquiries about wages and other terms and conditions of employment); and

  • A prohibition against using or disclosing employee addresses, telephone numbers, and accessing such information without a business need to do so and without either the employer’s authorization or the employee’s consent.

These decisions sent a chill down the spines of HR representative and their attorneys, who were tasked with redrafting workplace rules, policies, procedures, employee handbooks and codes of conduct so that they could not possibly be construed to have a chilling effect on Section 7 rights. The result was policies that were needlessly awkward and complex, rife with generalized exceptions that needlessly eviscerated the policies. In many cases, the best approach was deemed to have no written policy in the areas most ripe for scrutiny (e.g., social media policies, use of company technological resources), and simply to address issues as they arose on a case-by-case basis.

Warming Back Up to Facially Neutral Policies

On December 14, 2017, the Board finally overturned Lutheran Heritage and its progeny governing facially neutral workplace rules. In a rather critical assessment of the consequences of Lutheran Heritage, the board majority said:

The “reasonably construed” test was difficult to apply consistently, failed to consider legitimate reasons for the rule, and offered no real guidance for employers to determine what policies and handbook provisions were acceptable.

These problems have been exacerbated by the zeal that has characterized the Board’s application of the Lutheran Heritage “reasonably construe” test. Over the past decade and one-half, the Board has invalidated a large number of common-sense rules and requirements that most people would reasonably expect every employer to maintain.

The Board will no longer find unlawful the mere maintenance of facially neutral employment policies, work rules and handbook provisions based on a single inquiry, which made legality turn on whether an employee ‘would reasonably construe’ a rule to prohibit some type of potential Section 7 activity that might (or might not) occur in the future.

The new standard for evaluating employer policies is as follows: “[W]hen evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.”

The Board created three categories of such rules:

  • Category 1 – “Rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.”

  • Category 2 – “Rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.”

  • Category 3 – “Rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.”

What it All Means

Going forward, employers can relax a bit when implementing or revising facially neutral handbook provisions and other management workplace policies. Employers still need to be aware of and sensitive to Section 7 rights, and rules that previously were subject to scrutiny, like all workplace rules, still need to have a business justification. However, the litany of exceptions that had been added to facially neutral policies need no longer be listed if the potential adverse impact on Section 7 rights is nominal or imaginary.


Written By:
Bill Egan

Bill Egan is a Seasoned Employment Law Attorney backed by over 33 years of proven, veteran experience. He specializes in navigating businesses through conflict resolution in the workplace.

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