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NLRB Issues Memo on Legality of Employee Handbook Policies

on Thursday, 26 March 2015 in Labor & Employment Law Update: Sarah M. Huyck, Editor

On March 18, 2015, the National Labor Relations Board’s General Counsel issued Memorandum 15-04 analyzing the legality of many types of employee handbook policies in the context of Section 7 of the National Labor Relations Act. The Memorandum offers guidance on the General Counsel’s views of this evolving area of labor law with the hope that it will help employers to review their handbooks and other rules, and conform them, if necessary, to ensure that they are lawful.

Among other things, Section 7 of the Act guarantees employees the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” These “protected concerted activities” include two or more employees acting together to improve their terms and conditions of employment (even if no union is involved), as well as the action of a single employee if he or she involves co-workers before acting, or acts on behalf of others. For example, the Board has held that employees have the right to discuss pay, benefits, and other issues with other employees and even third parties (including unions and the media). Likewise, employees have the right to encourage boycotts of their employers’ goods or services and to publicly (on the Internet and otherwise) make negative and unflattering comments about their employers.

Although most employers do not draft their employee handbooks with the object of prohibiting or restricting activity protected by the Act, the law does not allow even well-intentioned policies that would inhibit employees from engaging in protected concerted activity. Under the Board’s 2004 decision in Lutheran Heritage Village-Livonia, the mere maintenance of a policy may violate the Act if the policy has a chilling effect on employees’ Section 7 activity. The most obvious way a policy would violate the Act is by explicitly restricting protected concerted activity; by banning union activity, for example. Even if a policy does not explicitly prohibit Section 7 activity, however, it will still be found unlawful if employees would reasonably construe the policy’s language to prohibit Section 7 activity or if the policy was actually applied to restrict the exercise of Section 7 rights.

The Memorandum is divided into two parts. First, the Memorandum compares policies found unlawful with policies found lawful, and explains the reasoning. Policies such as confidentiality rules, professionalism rules, anti-harassment rules, trademark rules, photography/recording rules, and media contact rules are discussed. Second, the Memorandum discusses handbook policies from a recently settled unfair labor practice charge against Wendy’s International LLC. The settlement was negotiated following the General Counsel’s initial determination that several of Wendy’s handbook policies were facially unlawful. The Memorandum sets forth Wendy’s policies that were initially found unlawful, along with Wendy’s modified policies (adopted pursuant to an informal Board settlement agreement) which the General Counsel does not believe violate the Act.

Examples of Lawful/Unlawful Policies

While we advise employers to conduct their own thorough review of the Memorandum, we summarize below some of the policy provisions that the General Counsel considers unlawful. We note that the primary concern for the General Counsel was that these provisions, without more specifics to clarify the context, were overly broad.

Unlawful: Never publish or disclose [the Employer’s] or another’s confidential or other proprietary information. Never publish or report on conversations that are meant to be private or internal to [the Employer].
Rationale: An employer may ban disclosure of its own confidential information, but a broad reference to “another’s” information, without further clarification, would reasonably be interpreted to include other employees’ wages and other terms and conditions of employment.

Unlawful: [l]f something is not public information, you must not share it.
Rationale: Because the rule bans discussion of all non-public information, the General Counsel concluded that employees would reasonably understand it to encompass such nonpublic information as employee wages, benefits, and other terms and conditions of employment.

Unlawful: Do not make fun of, denigrate, or defame your co-workers, customers, franchisees, suppliers, the Company, or our competitors.
Rationale: This provision is unlawfully overbroad because employees reasonably could construe them to ban protected criticism or protests regarding their supervisors, management, or the employer in general.

Unlawful: Disrespectful conduct or insubordination, including, but not limited to, refusing to follow orders from a supervisor or a designated representative.
Rationale: While the rule bans “insubordination,” it also bans conduct that does not rise to the level of insubordination, which reasonably could be understood to include protected concerted activity.

Unlawful: Never engage in behavior that would undermine the reputation of [the Employer], your peers or yourself.
Rationale: Employees have the right to criticize an employer’s labor policies and treatment of employees, including the right to do so in a public forum. This provision prohibits such criticism.

Unlawful: “[D]on’t pick fights” online.
Rationale: The General Counsel said that this “broad and ambiguous language” could reasonably be construed to encompass protected heated discussion among employees regarding unionization, the employer’s labor policies, or the employer’s treatment of employees.

Unlawful: Do not send “unwanted, offensive, or inappropriate” e-mails.
Rationale: This rule is unlawful because it does not provide context or examples to clarify that it does not encompass Section 7 communications.

Unlawful: [A]ssociates are not authorized to answer questions from the news media …. When approached for information, you should refer the person to [the Employer’s] Media Relations Department.
Rationale: Blanket restrictions on employee’s responses to media inquiries could be reasonably understood to prohibit all media contacts.

Unlawful: Do “not use any Company logos, trademarks, graphics, or advertising materials” in social media.
Rationale: This restriction could reasonably be read to ban fair use of the employer’s intellectual property in the course of protected concerted activity.

Unlawful: Taking unauthorized pictures or video on company property is prohibited.
Rationale: Employees could reasonably read this rule to prohibit all unauthorized employee use of a camera or video recorder, including attempts to document health and safety violations and other protected concerted activity.

Unlawful: Failure to report to your scheduled shift for more than three consecutive days without prior authorization or “walking off the job” during a scheduled shift” is prohibited.
Rationale: The broad prohibition on walking off the job could be read to prohibit protected strikes and walkouts.

Unlawful: Employees may not engage in “any action” that is “not in the best interest of [the Employer].”
Rationale: The rule is phrased too broadly and does not include clarifying examples or context that would indicate that it did not apply to Section 7 activities.

Fortunately, the General Counsel also provided employers with examples of provisions considered to be valid:

Lawful: Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [Employer] is cause for disciplinary action, including termination.
Rationale: Even when a confidentiality policy contains overly broad language, the rule will be found lawful if, when viewed in context, employees would not reasonably understand the rule to prohibit Section 7 protected activity.

Lawful: Employees will not be discourteous or disrespectful to a customer or any member of the public while in the course and scope of [company] business.
Rationale: A Handbook may require employers to be respectful to customers and competitors, so long as it does not mention the company or its management.

Lawful: Each employee is expected to abide by Company policies and to cooperate fully in any investigation that the Company may undertake.
Rationale: When read in context with other provisions, employees would reasonably interpret this rule to apply to employer investigations of workplace misconduct rather than investigations of unfair labor practices or preparations for arbitration.

Lawful: Being insubordinate, threatening, intimidating, disrespectful or assaulting a manager or supervisor, coworker, customer or vendor will result in discipline.
Rationale: Although a ban on being “disrespectful” to management, by itself, would ordinarily be found to unlawfully chill Section 7 criticism of the employer, the term here is contained in a larger provision that is focused on serious misconduct, like insubordination, threats, and assault. Viewed in that context, the General Counsel concluded that employees would not reasonably believe this rule to ban protected criticism.

Lawful: [T]hreatening, intimidating, coercing, or otherwise interfering with the job performance of fellow employees or visitors.
Rationale: When an employer’s professionalism rule simply requires employees to be respectful to customers or competitors, or directs employees not to engage in unprofessional conduct, and does not mention the company or its management, employees would not reasonably believe that such a rule prohibits Section 7 protected criticism of the company.

Lawful: The company strives to anticipate and manage crisis situations in order to reduce disruption to our employees and to maintain our reputation as a high quality company. To best serve these objectives, the company will respond to the news media in a timely and professional manner only through the designated spokespersons.
Rationale: Employees reasonably would interpret this rule to mean that employees should not speak on behalf of the company, not that employees cannot speak to outsiders on their own (or other employees’) behalf.

Lawful: Respect all copyright and other intellectual property laws. For [the Employer’s] protection as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks and other intellectual property, including [the Employer’s] own copyrights, trademarks and brands.
Rationale: The rule simply requires employees to respect trademark and copyright laws, but does not articulate a blanket prohibition on use.

Lawful: Walking off shift, failing to report for a scheduled shift and leaving early without supervisor permission are also grounds for immediate termination.
Rationale: Although this rule includes the term “walking off shift,” which usually would be considered an overbroad term that employees reasonably would understand to include strikes, the General Counsel found this rule lawful in the context of the employees’ responsibilities.

Lawful: Do not “give, offer or promise, directly or indirectly, anything of value to any representative of an Outside Business,” where “Outside Business” is defined as “any person, firm, corporation, or government agency that sells or provides a service to, purchases from, or competes with [the Employer].” Examples of violations include “holding an ownership or financial interest in an Outside Business” and “accepting gifts, money, or services from an Outside Business.”
Rationale: Employees would reasonably understand that the rule is directed at protecting the employer from employee graft and preventing employees from engaging in a competing business, and that it does not apply to employee interactions with labor organizations or other Section 7 activity that the employer might oppose.


Employers, both union and non-union, should review the General Counsel’s Memorandum and consider whether their handbook policies and rules should be revised.  Although the General Counsel’s interpretations of policies and rules that may violate Section 7 rights appear for the most part to be unreasonable interpretations, employers who ignore the Memorandum do so at their potential peril because the current majority of the Board will likely agree with those interpretations in the event of a contested case.

R.J. (Randy) Stevenson

Kelli P. Lieurance

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500