NLRB General Counsel's Office Sets Out in Advice Memos Plan to Expand Purple Communications Beyond Email

Practical Law Legal Update w-009-3262 (Approx. 10 pages)

NLRB General Counsel's Office Sets Out in Advice Memos Plan to Expand Purple Communications Beyond Email

by Practical Law Labor & Employment

Cardinal Financial Company, LP

Cardinal Financial (Cardinal) is a mortgage banking firm. Its employees have access to computers, software, internal and external networks, and internet, and use the computers throughout their work shifts. Cardinal maintained a handbook that included rules concerning employee use of the employer's electronic communication systems. Some rules prohibited personal use of the systems and the Division of Advice examined the lawfulness of these restrictions.

The Employer's Business-Only Policies for Electronic Communications Systems

Rule 8:15 states that Cardinal's electronic communications systems is for the "Company's business and not for personal use."
Rule 15.2 states that systems are "solely for use in conducting the Company's business."
Rule 8.8 generally prohibits employee usage of "Company resources … for promoting or conducting personal business … or other personal activities not related to the Company's business operations," which presumably include the electronic systems.

The Division of Advice concluded that these rules would violate the NLRA if the Purple Communications holding is extended to all company electronic communications systems because:

The internet shares many of the same important features as email that the Board discussed in Purple Communications. The Board noted that other electronic communications may be subject to the same analysis as email (361 N.L.R.B No. 126, slip op. at 14 n.70). Specifically:
- the internet is a critical means of communication in modern society;
- internet communication allows employees to respond to messages once they are on nonworking time;
- employees may feel more comfortable engaging in Section 7-related communication by personal email (accessed by the internet) rather than by company email; and
- employees may not have internet access outside of work.
Under an extended Purple Communications, absent special circumstances, employees must be permitted to use their employer's email system for statutorily-protected communications on nonworking time.
Cardinal did not provide evidence that personal use of its communications systems during nonworking time would impact employee productivity.

The Employer's Content Restrictions for Employees' Electronic Communications

Rule 9 states, in part, "[e]mployees may not use the Company's materials, supplies or equipment for the purpose of distributions or solicitations."
Rule 15.3 states, in part, that employer's electronic communications systems must be used "in a professional and appropriate manner that promotes the Company's business interests."
Rule 15.8 states in part:
- (f) "Employees may not use or allow the Communications Systems to be used for any purpose that is either damaging to or competitive with the Company, detrimental to its interests, or that creates an actual, potential or apparent conflict of interest"; and
- (g) "The use by employees of Company computers for personal or non-Company related reasons must not interfere with the performance of the employee's job responsibilities. Employees who spend excessive amounts of time using the Communications Systems for personal reasons will be subject to discipline. Employees shall not use Company computers or other technology resources for personal business or gain or for advancement of individual views or opinions."

The Division of Advice found these rules unlawfully overbroad because:

They generally were unclear as to their application to Section 7 activity.
They do not contain limiting language or context to clarify to employees that the rule does not restrict Section 7 rights.
(See 2 Sisters Food Group, 357 N.L.R.B. 1816, 1817 (2011).)
Rule 9's broad restriction on using Cardinal's equipment, including electronic communications equipment, for solicitation and distribution:
- squarely encompasses Section 7 communications; and
- is not limited to working time.
The part of Rule 15.8 (g) that prohibited employee use of company technology "for advancement of individual views or opinions" could reasonably be understood to include protected activity, such as voicing opinions about unionization or labor relations policies.
An employee would reasonably understand Rule 15.3's requirement of professionalism and promoting business interests to prohibit Section 7 activities such as criticizing employment terms and conditions. Therefore, they are unlawful under Lutheran Heritage Village-Livonia (343 N.L.R.B. 646, 646-47 (2004)).
Rule 15.8 (f)'s restriction on the use of company technology "for any purpose that is either damaging to … the Company, [or] detrimental to its interests" could be reasonably understood to prohibit protected activity, such as criticizing Cardinal's labor policies or management.

The Employer's Use of Its Electronic Communications Systems and Equipment Monitoring Policies

Rule 8.15 states, in part, that "[t]he Company reserves the right to inspect desks, cabinets, lockers, other furniture, and office equipment as well as any contents, effects or articles they contain." This includes computers.
Rule 15.6 states, in part, that "[e]mployees using the Communications Systems should not have any expectation of privacy, either personal or otherwise, with respect to any information, materials, data, emails, messages, communications, or matters stored in, created with or on, received by, delivered by, or sent over or to the Communications Systems."
Rule 16.3 states, in part, that "[t]he Company reserves the right to monitor, intercept, and review every employee's activities using the Company's IT resources and Communications Systems" including but not limited to social media activities, without notice and without the employee's consent."

The Division of Advice concluded that these policies were lawful because:

Management may observe public union activity without violating the NLRA if company officials do not "do something out of the ordinary" (Eddyleon Chocolate Co., 301 N.L.R.B. 887, 888 (1991)).
Similarly, an employer may lawfully monitor electronic communications on its email system if the employer does nothing out of the ordinary, such as:
- heightening its monitoring during an organizational campaign; or
- more closely monitoring protected conduct or union activists.
(See Purple Comm'ns, Inc., 361 N.L.R.B. No. 126, slip op. at 16.)
Cardinal Financial did nothing out of the ordinary.

Space Coast Credit Union

Space Coast Credit Union was a credit and financial services company with a workforce that was partially represented by a union. Space Coast maintained and distributed to employees several policies and guidelines concerning employee conduct and employees' use of the company's technology and communications systems. The Division of Advice scrutinized the below guidelines entitled "Fraud, Bribery, Confidentiality and Code of Conduct Policies" and "End User Guidelines."

Fraud, Bribery, Confidentiality and Code of Conduct Policies

"Fraud Policy

Space Coast Credit Union considers any form of fraud or dishonesty on the part of its employees as totally unacceptable conduct. Acts, which are considered to be either fraudulent or dishonest, include, but are not limited to:

* * *

9. Unauthorized use of computer time or equipment and software piracy.

* * *

Employee Agreement Regarding Confidentiality and Code of Conduct

As an employee of Space Coast Credit Union, I will:

* * *

5. Maintain the confidentiality of proprietary information learned or acquired in the course of my work, except when authorized or otherwise legally obligated to disclose such information. Confidential or proprietary information learned or acquired in the course of my work will not be used for my personal advantage or disclosed to any person or firm except as required in the performance of my duties with the Company or after termination of my employment with the Company, unless such information is in the public domain other than through my wrongful disclosure.

* * *

8. Refrain from committing acts discreditable to the Company, my fellow employees, or myself."

The Division of Advice concluded that the following Fraud, Bribery, Confidentiality and Code of Conduct policies were unlawfully overbroad for the following reasons:

Provision 9's prohibition against unauthorized computer time as fraud infringes on employees' rights under Purple Communications to use the company's email system during nonworking time for Section 7 activity.
Provision 5's confidentiality provision:
- does not clarify that "confidential or proprietary information" does not refer to employee-related information; and
- could be interpreted by a reasonable employee as disallowing the use of information regarding employment terms and conditions, and other non-public information critical to the concerted activities protected by Section 7 (see Rio All-Suites Hotel & Casino, 362 N.L.R.B. No. 190, slip op. at 2 (Aug. 27, 2015)).
Provision 8's directive to refrain from acts that may discredit the company provides no context, such as a definition for "discreditable act." Section 7 provides latitude for employees to protest and publicize their labor disputes, some of which is likely to be discreditable to an employer's image. An employee would reasonably read the rule as applying to Section 7-protected conduct.

End User Guidelines

"I. Microcomputers – Responsibilities of All Personnel

* * *

9. Unauthorized copying or use of Credit Union software and data files is strictly prohibited.

* * *

IV. Electronic Mail and Electronic Monitoring

* * *

Confidential, foul, offensive, defamatory, pornographic or other inappropriate communication is strictly prohibited via electronic mail (or any other means). . . .

* * *

V. Internet Usage

* * *

Unacceptable use

Employees must not use the Internet for purposes that are illegal, unethical, and harmful to the Credit Union. The lists below are by no means exhaustive, but attempt to provide a framework for activities which fall into the category of unacceptable uses. Examples of unacceptable use are:

• Sending or forwarding chain e-mail, i.e., messages containing instructions to forward the message to others.

* * *

• Transmitting any content that is offensive, harassing, or fraudulent.

• Using the Credit Unions Internet Service to access personal email accounts to send or receive email communications using any other type of email service other than the SCCU owned and managed Email systems.

• Using the Credit Unions Internet Service for instant messenger communications.

* * *

• Posting the same or similar non-business-related messages to large numbers of Usenet newsgroups (newsgroup spam)."

The Division of Advice concluded that Space Coast's microcomputer usage policy, electronic mail and monitoring policy, internet usage policy, and provisions banning personal email and instant messaging use were each unlawfully overbroad. Employees would reasonably construe these provisions as prohibiting Section 7 protected communications. Specifically:

Provision 9 of the Microcomputers policy which prohibits the unauthorized use of Credit Union software:
- could be unlawful under Purple Communications because it could reasonably be understood to prohibit the use of Space Coast's email during non-work time; and
- under Purple Communications, as extended to other communications systems and modes, the restriction on software applications also would appear to impinge on Section 7 activity during nonworking time.
The Electronic and Email Monitoring policy is unlawfully overbroad because:
- it prohibits communications that are confidential, offensive, defamatory, or inappropriate. The Board has found these vague terms to restrict Section 7 rights (see UPMC, 362 N.L.R.B. No. 191, slip op. at 1 & n.5, 21-22 (Aug. 27, 2015) and Quicken Loans, Inc., 359 N.L.R.B. No. 141, slip op. at 1 n.3, 5 (June 21, 2013));
- reasonable employees would interpret the ambiguous terms, without definition or context, to limit communication protected by Section 7; and
- the rule extending the prohibition on these communications from email to "any other means" may chill employees' exercise of protected rights.
The internet usage policy's prohibition of internet use that is "harmful to the Credit Union" is ambiguous. The prohibition:
- would reasonably be understood by employees as barring some Section 7-protected activities; and
- would not be negated by the clearer prohibition of internet use for "illegal" or "unethical" purposes.
The internet usage policy's prohibition of forwarding email chains and instructing others to do the same is unlawfully overbroad because:
- employees who are granted access to their employer's email system for work presumably have similar access for protected activity during nonworking time under Purple Communications; and
- communications between employees at numerous work locations of the employer might include forwarding emails that contain protected content.
The internet usage policy's restriction on sending any "offensive" content is unlawfully overbroad because:
- the term "offensive" is vague and would reasonably be understood by employees as barring some Section 7-protected activities; and
- uncertainty regarding whether certain protected activity is offensive would reasonably chill employees' exercise of their rights.

The Division of Advice also concluded that the region should seek to extend Purple Communication's analysis to the company's use of the employer's internet to access personal email or instant messenger programs because:

An employer that already allows internet access for work purposes ought not be able to ban access to personal email and instant messaging.
The workplace is well-suited for Section 7-related discussion, and personal email and instant messaging are important modern means of communication.
Employees may feel more comfortable communicating about Section 7-related communications by personal email rather than by the employer's email system.
Space Coast failed to introduce evidence supporting its contention that increased security or financial risk constituted special circumstances justifying the ban of all personal email and instant messaging.

These advice memoranda are not binding precedent from the Board. However, they provide insights concerning:

The kinds of unfair labor practice allegations the NLRB General Counsel is likely to prosecute.
The liability theories the NLRB General Counsel is developing and pursuing.
How the NLRB General Counsel is extending, minimizing, combining, or reimaging precedent to support those allegations and liability theories.

The current General Counsel's four-year term ends in November 2017. The new General Counsel, who will be nominated by President Trump in the coming months, may not analyze this set of facts as the President Obama-appointed General Counsel, but employers should recognize that:

The General Counsel's Office will likely be staffed by the same personnel who endorse and currently carry-out this agenda.
Until the new General Counsel affirmatively alters the office's prosecutorial agenda, NLRB regional directors, regional attorneys, and others acting as counsel for the General Counsel will continue to carry out current enforcement activities using the current General Counsel's liability theories.

UPDATE:

The newly appointed NLRB General Counsel, Peter B. Robb, rescinded the initiative discussed in these advise memoranda of extending Purple Communications to other electronic systems (N.L.R.B. Gen. Counsel Mem. 18-02, Mandatory Submissions to Advice, (Dec. 1, 2017)).

UPDATE:

On December 16, 2019, in Caesars Entertainment d/b/a Rio All-Suites Hotel & Casino, the Board overruled Purple Communications, Inc. (368 N.L.R.B. No. 143 (Dec. 16, 2019); see Legal Update, NLRB Restores Employers' Right to Restrict Use of Email).

NLRB General Counsel's Office Sets Out in Advice Memos Plan to Expand Purple Communications Beyond Email | Practical Law