NLRB Reasonable on Recording Ban, Unreasonable on Positivity, Integrity, and Acceptable Use Rules: Fifth Circuit | Practical Law

NLRB Reasonable on Recording Ban, Unreasonable on Positivity, Integrity, and Acceptable Use Rules: Fifth Circuit | Practical Law

In T-Mobile USA, Inc. v. NLRB, the US Court of Appeals for the Fifth Circuit held that under Lutheran Heritage, reasonable employees would not read the employer's positive working environment, commitment to integrity, and acceptable use policies as prohibiting their exercise of Section 7 rights under the National Labor Relations Act (NLRA). In contrast, the court held that the employer's workplace recording policy was unlawfully overbroad.

NLRB Reasonable on Recording Ban, Unreasonable on Positivity, Integrity, and Acceptable Use Rules: Fifth Circuit

by Practical Law Labor & Employment
Published on 01 Aug 2017 • USA (National/Federal)
In T-Mobile USA, Inc. v. NLRB, the US Court of Appeals for the Fifth Circuit held that under Lutheran Heritage, reasonable employees would not read the employer's positive working environment, commitment to integrity, and acceptable use policies as prohibiting their exercise of Section 7 rights under the National Labor Relations Act (NLRA). In contrast, the court held that the employer's workplace recording policy was unlawfully overbroad.
On July 25, 2017, in T-Mobile USA, Inc. v. NLRB, the US Court of Appeals for the Fifth Circuit held that, under Lutheran Heritage, reasonable employees would not read a telecom employer's positive working environment, commitment to integrity, and acceptable use policies as prohibiting their exercise of Section 7 rights under the NLRA (343 N.L.R.B. 646, 646 (2004)). In contrast, the court held that the employer's workplace recording policy was unlawfully overbroad. ( (5th Cir. July 25, 2017).)
On April 29, 2015, in T-Mobile USA, Inc., the panel (Board) heading the NLRB's judicial functions ruled that T-Mobile's acceptable use policy, code of business conduct's commitment to integrity provision, and employee handbook's rules on maintaining a positive work environment and workplace recordings violated the NLRA (see T-Mobile USA, Inc., 363 N.L.R.B. No. 171 (Apr. 29, 2016); Legal Update, Acceptable Use, Pro-Cooperation, and Recording Device Policies Are Unlawful: NLRB).
T-Mobile petitioned the Fifth Circuit for review of the Board's decision and the NLRB filed a cross-application for enforcement of the Board's order. The Fifth Circuit:
  • Enforced the Board's decision regarding T-Mobile's Workplace Recording Policy, holding the Board reasonably concluded that it was unlawfully overbroad.
  • Granted review to T-Mobile regarding the Board's conclusions that T-Mobile's positive working environment, commitment to integrity, and acceptable use policies were unlawful. The court held that reasonable employees would not read these policies as prohibiting their exercise of Section 7 rights under the NLRA.
The Fifth Circuit noted that:
  • To determine whether a workplace rule violates Section 8(a)(1) of the NLRA, the two-part Lutheran Heritage test is the appropriate standard. Under Lutheran Heritage:
    • workplace rules must be given a "reasonable reading;
    • when construing a work rule, the appropriate, objective inquiry is whether a reasonable employee reading the rules would construe them to prohibit conduct protected by the NLRA; and
    • the key question in this case is whether a reasonable T-Mobile employee would reasonably construe the language to prohibit Section 7 activity.
      (Lutheran Heritage, 343 N.L.R.B. at 646-47.)
  • In Adtranz ABB Daimler-Benz Transportation, N.A., Inc. v. NLRB, the US Court of Appeals for the District of Columbia Circuit (DC Circuit):
    • considered the Board's policies similar to those in this case, which expected employees to trust and respect self and others, engage in teamwork, cooperation, and effective communication, and not employ abusive or threatening language to anyone on company premises;
    • rejected the NLRB's argument that the company's effort to maintain a civil and decent workplace is an unfair labor practice (ULP) that threatens employees' statutory rights under the NLRA; and
    • posited that "it is preposterous that employees are incapable of organizing a union or exercising their other statutory rights under the NLRA without resort to abusive or threatening language."
      (253 F.3d 19, at 25-26 (D.C. Cir. 2001).)
  • In Community Hospitals of Central California v. NLRB, the DC Circuit held that a rule prohibiting insubordination or other disrespectful conduct, read in context:
    • applied to incivility and outright insubordination, in whatever context it occurs; and
    • would not be read to restrict protected activity, including vigorous proselytizing for or against a union.
      (335 F.3d 1079, 1087-88 (D.C. Cir. 2003).)
  • Where a company policy prohibits the disclosure of non-public information, courts presume that a reasonable employee would not construe it to prohibit the disclosure of information that may be properly used in protected activity, such as wage and benefit information, as long as the policy does not explicitly state that it encompasses such information (see Lafayette Park Hotel, 326 N.L.R.B. 824, at 826 (1998)). Conversely, a company's confidentiality or nondisclosure policy is unlawful if it expressly defines confidential information as including, or proscribing disclosure of personnel information (see Flex Frac Logistics, L.L.C. v. NLRB, 746 F.3d 205, 210 (5th Cir. 2014)).
The Fifth Circuit held that:
  • The Board erred by interpreting the rules at issue based on how the reasonable employee "could," rather than "would," interpret these policies.
  • The Board erred by concluding the employee handbook's rules on maintaining a positive work environment by communicating in a manner that is conducive to effective working relationships was unlawful. A reasonable T–Mobile employee, reading it in the context of a normal workplace, on a normal workday, would:
    • interpret the policy as requiring professional manners, positive work environment, effective and courteous communications, common sense, and people skills with respect to work;
    • understand it to express a universally accepted guide for conduct in a responsible workplace; and
    • not construe it to restrict Section 7 rights.
  • The Board erred by concluding the code of business conduct's commitment to integrity provision was unlawful. A reasonable T–Mobile employee would:
    • be fully capable of engaging in vigorous debate over union activity or working conditions without inappropriately arguing or fighting, failing to treat others with respect, or failing to demonstrate appropriate teamwork as prohibited by the commitment to integrity provision; and
    • not construe it to restrict Section 7 rights.
  • The Board erred by concluding that the acceptable use policy was unlawful because the policy:
    • only prohibited employees from sharing "non-public T-Mobile information";
    • did not define non-public information in a way that would lead a reasonable worker to believe that it includes protected wage and benefit information; and
    • would be read by a reasonable T-Mobile employee as applying to the sort of proprietary business information that an employer may properly restrict its employees from sharing outside of the company.
      (see Lafayette Park Hotel, 326 N.L.R.B. at 826.)
  • The Board reasonably concluded that the workplace recording policy was unlawfully overbroad because:
    • it restricted "any and all photography or recording on corporate premises at any time without permission from a supervisor, " which, on its face, prohibited protected Section 7 activity; and
    • a reasonable T-Mobile employee, generally aware of employee rights, would interpret this language to discourage protected concerted activity. For example, it reasonably would be understood to prohibit an off-duty employee photographing a wage schedule posted on a corporate bulletin board.

Practical Implications

The Fifth Circuit continues to be a venue employers should consider for petitions to review Board decisions (see for example Legal Updates, FAA Trumps NLRA in D.R. Horton Class Action Waiver Challenge: Fifth Circuit and Fifth Circuit Continues to Reject NLRB's Analysis of Mandatory Arbitration Agreements; NLRB Shows No Sign of Acquiescing).
Employers with workplace recording policies akin to the T-Mobile policy scrutinized in this case should consider revising them as not even the Fifth Circuit finds the Board's conclusion that those policies are unlawfully overbroad is reasonable and its order on this issue ought to be enforced.