An employee handbook is an important and useful part of any business with employees. A well-drafted handbook sets the employer’s expectations, demonstrates the employer’s policies are legally compliant, provides needed information, and highlights positive employee benefits, among other things.

The government in recent years has dramatically affected what must, may, and should not be in a handbook. The National Labor Relations Board, a federal agency normally associated with union-management matters, has issued a number of decisions regulating what both union and non-union employers may set out in their handbooks. The Board recently changed its interpretation of the law, loosening restrictions on the provisions that may be included in employee handbooks.

The Board’s Previous Position

The Board enforces the National Labor Relations Act (“NLRA”), a federal law that regulates union activities and collective bargaining. Section 7 of the NLRA also guarantees employees in both union and non-union workplaces the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection,” commonly referred to as “Section 7 activity.”

In a 2004 case, Lutheran Heritage Village-Livonia, the Board found that if employees could “reasonably construe” an employer’s policy as prohibiting Section 7 activity, the policy violated the NLRA. It did not matter whether the employer intended to prohibit Section 7 activity, or whether the employer had a good reason for the policy. In that case, for example, the Board invalidated a rule prohibiting “[l]oitering on company property” because employees might reasonably believe the rule would prohibit them from engaging in “protected communications” (e.g., discussing their wages or working conditions) in the parking lot before or after work.

Following Lutheran Heritage, the Board issued more guidance about how this vague and broad test applied to specific employer policies. In 2015, the NLRB’s General Counsel issued a “Report Concerning Employer Rules” (the “2015 report”). This detailed document covered many types of employer policies and addressed whether specific language in the policies passed muster under the Lutheran Heritage test. It determined that some very common but broadly written rules—including, among others, rules prohibiting “insubordination,” sharing non-public information, and making abusive comments about co-workers or others—violated the NLRB.

As a result of these restrictions, employers either were forced to rewrite policies to more specifically exclude Section 7 activity, or to remove these and other policies from their handbooks altogether.

The Board’s New Position

In late 2017, the Board issued a new decision, The Boeing Company, which overruled Lutheran Heritage. The Board considered whether Boeing’s policy restricting “camera-enabled” devices (like cell phones) on the property without valid business purpose violated the NLRA, even though the rule was not intended to prohibit Section 7 activity. The Board pointed out that the Lutheran Heritage standard did not take into account an employer’s “legitimate justifications” for work rules (security-related in Boeing’s case). The Board recognized that Lutheran Heritage’s vague rule invalidated facially neutral rules solely because they were ambiguous, limited the Board’s discretion, and was difficult to apply.

The Board’s new standard under Boeing is more clear and balanced. To evaluate facially neutral work policies for violations of section 7, the Board will now consider: (1) the nature and extent of the potential effect on Section 7 rights; and (2) an employer’s legitimate justifications for the rule. The Board has divided employer rules into three categories: (1) lawful rules either because they do not prohibit or interfere with Section 7 rights, or because the employer’s justifications outweighs the potential effect of those rights (“Category 1”); (2) rules that warrant individual scrutiny as to whether they would prohibit or interfere with Section 7 rights (“Category 2”); and (3) unlawful rules that would prohibit or limit NLRA-protected conduct (“Category 3”).

The Board’s Further Guidance

A June 2018 memorandum from the NLRB General Counsel (the “June 2018 memo”) provides more clarity about the new framework. The General Counsel reviewed many common handbook policies and analyzed whether and why they might violate the NLRA. According to the June 2018 memo, many policies and rules that the Board previously decided were illegal generally would be lawful under Boeing’s Category 1, including general civility rules; no-photography and no-recording policies; rules prohibiting insubordination, disruptive behavior, defamation, and use of the employer’s logos and intellectual property; rules protecting confidential, proprietary, and customer information; policies requiring authorization to speak on the employer’s behalf; and employer bans of disloyalty, nepotism, or self-enrichment.

The Board also described employer mandates that would fall within Category 2 and require individual scrutiny. These include policies regulating the use of the employer’s name, general rules restricting speaking to the media or third parties (not on the employer’s behalf), policies banning off-duty conduct that might harm the employer, rules against disparaging the employer (versus other employees), and prohibitions against making false or inaccurate statements.

Finally, the Board specifically prohibited policies and agreements mandating employee confidentiality concerning wages, benefits, or working conditions, as well as rules against joining outside organizations or voting on matters concerning the employer. These types of rules fall into Category 3.

An Employer’s Next Steps

Following Lutheran Heritage and the 2015 report, many employers removed the types of broad rules the Board previously frowned upon, even though such rules were helpful not only to employers but also to their employees who need to understand workplace expectations. Employers who want to provide guidance to employees about expectations for workplace behavior should revise their handbooks following the June 2018 memo. In so doing, they should consider reintroducing specific, common sense, justifiable rules under the Boeing standard.

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