NLRB Division of Advice Pans Personal Cell-Phone Rule, Okays Dress-Code, Confidentiality, and Media-Relations Rules | Practical Law

NLRB Division of Advice Pans Personal Cell-Phone Rule, Okays Dress-Code, Confidentiality, and Media-Relations Rules | Practical Law

The Office of the General Counsel of the National Labor Relations Board (NLRB) recently released an advice memorandum upholding an employer's dress-code, confidentiality, and media-relations rules, but concluding that the employer's personal cell-phone rule violated Section 8(a)(1) of the National Labor Relations Act (NLRA). The General Counsel also concluded that the employer did not violate Section 8(a)(5) of the NLRA when it failed to implement a discretionary wage increase for bargaining unit employees.

NLRB Division of Advice Pans Personal Cell-Phone Rule, Okays Dress-Code, Confidentiality, and Media-Relations Rules

by Practical Law Labor & Employment
Law stated as of 02 Aug 2023 • USA (National/Federal)
The Office of the General Counsel of the National Labor Relations Board (NLRB) recently released an advice memorandum upholding an employer's dress-code, confidentiality, and media-relations rules, but concluding that the employer's personal cell-phone rule violated Section 8(a)(1) of the National Labor Relations Act (NLRA). The General Counsel also concluded that the employer did not violate Section 8(a)(5) of the NLRA when it failed to implement a discretionary wage increase for bargaining unit employees.
NOTE: See the UPDATE at the end of this resource for subsequent developments affecting this advice memorandum.
On March 14, 2019, the Division of Advice of the NLRB's Office of the General Counsel (Advice) released an advice memorandum dated July 31, 2018, which concluded that:
  • The employer's personal cell-phone rule violated Section 8(a)(1) of the NLRA.
  • The employer's dress-code, confidentiality, and media-relations policies were lawful Category 2 rules under the Boeing analysis (Boeing Co., 365 N.L.R.B. No. 154 (Dec. 14, 2017)).
  • The employer did not violate Section 8(a)(5) of the NLRA when it failed to implement a discretionary wage increase pursuant to a predecessor employer's past practice after the union failed to timely respond to the employer's invitation to bargain.
Advice memoranda are not binding precedent from the NLRB. However, they provide insights concerning:
  • Which kinds of unfair labor practice (ULP) allegations the NLRB General Counsel is likely to prosecute.
  • What liability theories the NLRB General Counsel is developing and pursuing.
  • How the NLRB General Counsel is extending, minimizing, combining, or parsing precedent to support prosecuting or dismissing those types of allegations and liability theories.

Dress-Code Rule

The employee handbook includes a "Personal Appearance" section emphasizing the importance of "[m]aintaining a professional, business-like appearance" in the workplace and when attending company business. The section contains a list of approximately 22 bullet points identifying prohibited apparel that the employer has deemed inappropriate, including one bullet point that prohibits "[a]ny items of apparel with inappropriate commercial advertising or insignia."
Advice concluded that this prohibition is a lawful Category 2 rule under Boeing because:
  • When read in the context of the entire section, employees would not reasonably understand the rule to bar union insignia.
  • The prohibition specifically includes the qualifier "inappropriate," indicating that it does not restrict all commercial logos or insignia, but only those that are inconsistent with a professional, business-like appearance or other legitimate employer policies (compare Long Beach Memorial Med. Ctr., 366 N.L.R.B. No. 66, slip op. at 2-3 (Apr. 20, 2018) (finding that an employer's requirement that employee badges can only be branded with the employer's logo was unlawful because it banned employees from wearing badges with union insignia)).
  • The impact of prohibiting inappropriate insignia on employees' Section 7 rights is relatively slight, while the employer has a legitimate business interest in maintaining a work environment free of inappropriate imagery or language.

Personal Cell-Phone Rule

The employer's rule provides that, because cell phones can present a "distraction in the workplace" resulting in "lost time and productivity," employees may use personal cell phones for "work-related or critical, quality of life activities only." The rule defines "quality of life activities" as including "communicating with service or health professionals who cannot be reached during a break or after business hours. The rule states further that "[o]ther cellular functions, such as text messaging and digital photography, are not be used during working hours."
Advice concluded that the employer's personal cell-phone rule unlawfully infringes on employees' Section 7 rights in violation of Section 8(a)(1) of the NLRA because:
  • Employees have a Section 7 right to communicate with each other through non-employer-monitored channels during lunch or break periods.
  • Except for work-related or critical quality of life activities, the rule prohibits personal cell phone use at all times, including non-working times during working hours. Because the language permitting personal cell phone use during breaks and other non-work time is contained within the definition of "quality of life activities," employees would not reasonably construe the policy to allow cell phone use for other types of communications, including Section 7 communications, during non-work time.
  • Although the employer has a legitimate interest in preventing distractions, lost time, and lost productivity, that interest:
    • is relevant only when employees are on work time; and
    • does not outweigh employees' Section 7 interest in communicating privately using their cell phones about their employment terms and conditions during non-work time.

Confidential Information and Information Security Rule

The employer's rule provides that employees should "exercise a high degree of caution" when handling confidential information, defined to include:
  • Proprietary information owned by or otherwise in the employer's possession or control, such as business plans, internal correspondence, and customer lists.
  • Personally identifiable customer and employee information, including name, address, social security, credit card, and bank account numbers, and similarly personally identifiable information.
  • HIPAA-related information.
The rule also states that employees who have access to personal information concerning employees or confidential information about the employer or its customers, such as employees in positions supporting managers or performing human resources and timekeeping functions, should not discuss or divulge the information.
Advice concluded that this is a lawful Category 2 rule under Boeing because:
  • Employees would not reasonably interpret the rule to restrict Section 7 communications, including the dissemination of employee contact information obtained on their own, as it only specifically restricts those employees who have access to information as part of their jobs from discussing or divulging it.
  • The rule's potential impact on employees' strong interest in sharing employee contact information for Section 7 purposes is:
    • slight; and
    • outweighed by the employer's legitimate business interest in maintaining the confidentiality of certain information.

Media-Relations Rule

The employer's rule provides that "[i]t is critical that the [employer] communicate information about its activities consistently, accurately[,] and in a timely manner." The rule then states that reporters, financial analysts, and investors sometimes contact the employer with questions for articles or research, and that "information provided by an employee could be incorrectly interpreted as an official [employer] position and published as such." Accordingly, the rule provides that "all information provided to media, financial analysts, investors[,] or any other person outside the [employer] may be provided only by [employer] designated spokespersons or [employer] officers."
Advice concluded that this is a lawful Category 2 rule under Boeing because:
  • Despite the policy's broad language regarding "all information" provided to outside parties, it is clearly limited by the surrounding language clarifying the rule's purpose—that is, to avoid third parties mistaking an employee's statement for an official company position.
  • Read in context, employees would reasonably construe the rule to limit only who may speak on the employer's behalf, and not to restrict employee media appeals regarding workplace matters.
  • The employer has a significant interest in ensuring that only authorized persons speak for it, and the rule has no real impact on employees' Section 7 rights.

Bargaining About Discretionary Wage Increases

For 13 years, the employer's predecessor gave employees a discretionary, merit-based annual wage increase. When the employer took over operations, it recognized the union and began bargaining for a first contract. The employer notified the union that while non-union employees would receive their annual discretionary wage increase in accordance with past practice, the employer wanted to bargain over the amount of the wage increase for union-represented employees, given its discretionary nature. The union never responded or requested bargaining on the matter.
Advice concluded that the employer did not violate Section 8(a)(5) of the NLRA when it failed to give bargaining unit employees an annual wage increase under the predecessor employer's past practice because the union did not timely respond to the employer's invitation to bargain over the discretionary aspect of the wage increase. Specifically, Advice noted:

UPDATE

On August 2, 2023, a Board majority adopted a new burden-shifting standard for evaluating facial challenges to employer work rules that do not expressly restrict employees' protected concerted activity under Section 7 of the NLRA, overruling Boeing and the subsequent work rules decisions applying the categorical classification system articulated therein (Stericycle, Inc., 372 N.L.R.B. No. 113 (Aug. 2, 2023); for more information on this decision, see Article, The NLRB's New, Developing Standard for Assessing Lawfulness of Work Rules).