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Most employers think (incorrectly) that they can decide what conduct will be deemed appropriate in their workplace.  What they don’t appreciate is that the federal government is looking over their shoulder and, increasingly, ruling that many common sense standards for workplace behavior violate federal law. Take this quick quiz. Is it permissible to prohibit an employee from expressing a “discourteous or inappropriate attitude” towards customers, co-workers, or the public?  Can you discipline an employee for making false or derogatory comments about coworkers and management?  Can you tell employees that when they are in the community they should represent your business “in a positive and professional manner”? Unless you answered “No,” “No,” and “possibly No” you might need to review your Handbook.

Many recent decisions by the National Labor Relations Board (“NLRB”) have found that handbook or personnel policy language violates Section 7 of the National Labor Relations Act (“NLRA”).  To understand the legal debate, you need to have a working knowledge of the concept of employee Section 7 rights.

Under Section 7 of the NLRA, employees have the right “… 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 and shall have the right to refrain from any or all of such activities…” 29 U.S.C. §157.  It is Section 7’s language about engaging in “concerted activities for…other mutual aid or protection” that the NLRB has seized upon to strike down language appearing in employee handbooks. The Agency’s practice is not entirely new.  What is new is the scope of the practice and the creative reasoning being used by the current Board to find that otherwise eminently rationale policy language violates the NLRA.

Let’s start with their standard of analysis. When presented with an employee charge, the NLRB analyzes whether the company’s work rules “chill employees in the exercise of their Section 7 rights.”  Some rules expressly restrict Section 7 rights.  When they do, the NLRB automatically finds the rules unlawful. For example, if a company’s rules prohibit all forms of co-worker union solicitation in the workplace, then the rule expressly violates the NLRA.

If an employer’s rule does not expressly restrict a Section 7 right, then it is said to be “facially neutral” and the NLRB looks to see whether it was either promulgated in response to union activity or has been applied to restrict the exercise of Section 7 rights. If either has occurred then the rule is held to be unlawful despite its facial neutrality.

Finally, if none of these factors render the rule unlawful the NLRB nevertheless analyzes whether “employees would reasonably construe the rule’s language to prohibit Section 7 activity.” If the Board finds that employees would reasonably construe the rule as prohibiting Section 7 rights then the rule is said to violate the NLRA, even though it is a) facially neutral and b) has never been applied to prohibit Section 7 activity.

Critics of the current Board’s recent decisions argue that the new majority is effectively changing the crucial question in the third prong from whether an employee “would” reasonably construe a rule’s language to prohibit Section 7 activity to whether the employee “might” interpret the rule’s language as restricting such activity.   It is this dilution of the standard that has become the Board’s vehicle for finding all kinds of new handbook violations. This seemingly mundane, bureaucratic legal debate is having a significant impact on U.S. employers.

Conduct/discipline policies have historically been an area of significant tension between the employer’s interest in setting ground rules for workplace behavior and the NLRB’s assertion that certain language goes too far.  More than 45 years ago, the Supreme Court accorded significant protection to “intemperate, abusive, and inaccurate statements [made] during attempts to organize employees… [T]he most repulsive speech enjoys immunity provided it falls a short of a deliberate or reckless untruth.”  Linn v. United Plant Guards Local 114, 383 U.S. 53, 61 (1966).  Given this “deliberate and reckless untruth” standard, language in conduct/discipline policies is often an area of debate.  The Fourth Circuit Court of Appeals, which covers both Maryland and Virginia, has upheld rules prohibiting deliberately or maliciously false statements.  Owens-Corning Fiberglas Corp. v. NLRB, 407 F.2d 1357, 1366 (4th Cir. 1969).  It has, however, found that a rule prohibiting “malicious gossip or derogatory attacks on fellow employees, patients, physicians or hospital representatives” did not meet NLRB standard.  NLRB v. Southern Maryland Hospital Ctr, 916 F.2d 932 (1990).

Tracking the many NLRB cases and their reasoning, certain basic points become clearer.  First, rules that prohibit comments which are simply “false,” “negative,” or “derogatory” have not withstood review.  Conversely, rules that prohibit statements that are “deliberately or maliciously false statements” or prohibit “abusive or threatening language” have been upheld.

The current Board has been applying this analysis to language in many other sections of the employee handbook: ethics, electronic communications, social media, and courtesy. In 2012, the NLRB reviewed BMW’s courtesy policy. That policy required employees to be courteous to customers, co-workers, and management.  According to the NLRB majority, this standard violated Section 7: employees would reasonably construe it as infringing on their Section 7 rights. Dissenting Member Brian Hayes attacked this new interpretation as “an abstracted bureaucratic approach” that was not “reasonably defensible.” He warned that this new approach might result in another federal appellate decision like the one issued in 2001 when a federal appellate court commented that the NLRB was “remarkably indifferent to the concerns and sensitivity which prompt many employers to adopt rules on workplace conduct.” That federal court refused to enforce the NLRB’s order and went on to hold that the Board’s position was “simply preposterous.”

Member Hayes’ term expired in 2012 and the recently appointed Board members must think that their position is “reasonably defensible” because they reached the same conclusion this past April. Looking at a hospital’s standards policy which stated that employees will “represent [the hospital] in the community in a positive and professional manner in every opportunity,” all three members found that the language violated federal law. The underlying administrative law judge found this language acceptable because he said that it paralleled a 2002 NLRB decision which upheld a statement that employees were expected to represent the company in a “positive and ethical manner.” The new majority reversed the ALJ. According to the Board members, the phrase in the 2002 decision had a “significantly narrower scope of meaning” because it appeared in a conflict of interest policy, not a policy describing standards of behavior. That my friend is a well-split hair.

Most businesses in the United States cannot afford the cost of fighting with the NLRB.  Thus, many businesses are re-writing their language now trying to bring it into line with the new standard.  This new standard will continue to be a moving target as the NLRB looks at more policy language and opines on whether the language crosses the line which they have now created.   If you have not already done so, we suggest that you review your handbook to assess whether these and other recent NLRB decisions might require revisions.

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