NLRB General Counsel Issues Guidance on Handbook Rules Post-Boeing

Practical Law Legal Update w-015-1691 (Approx. 9 pages)

NLRB General Counsel Issues Guidance on Handbook Rules Post-Boeing

by Practical Law Labor & Employment

Category 1: Rules that Are Generally Lawful to Maintain

Category 1 rules are generally lawful because either:

The rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the NLRA.
The potential adverse impact on protected rights is outweighed by business justification.

Category 1 rules include:

Civility Rules

Examples include rules that prohibit:

Rude or discourteous behavior.
Negative or disparaging comments about other employees.
Disparaging or offensive language.

The General Counsel stated that:

The vast majority of conduct covered by civility rules (for example name-calling, gossip, and rudeness) does not implicate Section 7. Requiring that criticism remain civil does not unduly burden protected concerted activity involving criticism of fellow employees or supervisor.
Employers' legitimate interests include:
- maintaining a workplace free from unlawful harassment;
- preventing violence;
- avoiding unnecessary conflict or a toxic work environment that may interfere with productivity or other legitimate business goals; and
- fostering harmony and civility in the workplace.

No-Photography Rules and No-Recording Rules

Examples include rules that:

Do not address the use of cellphones for communication purposes but prohibit use of camera-enabled devices to capture images or videos; and
Prohibit employees from recording conversations without prior approval.

The General Counsel stated that:

As the Board determined in Boeing, no-photography rules have little impact on NLRA-protected rights, since photography is not central to protected concerted activity, even though these rules (and no-recording rules) may occasionally chill employees form taking pictures of their protected concerted activities or working conditions.
Employers have legitimate and substantial interest in limiting recording photography based on:
- security concerns;
- protection of property;
- protection of proprietary, confidential, and customer information;
- avoiding legal liability;
- maintaining integrity of operations; and
- encouraging open communication among employees.

Rules Against Insubordination, Non-Cooperation, or On-the-Job Conduct that Adversely Affects Operations

Examples include rules that prohibit:

Being uncooperative with a supervisor, fellow employee, or guest.
Conduct that does not support the employer's goals or objectives.

The General Counsel stated that:

The vast majority of activity covered by these rules is unprotected, and employees would not usually understand these rules as covering protected concerted activity.
An employer has a legitimate and substantial interest to:
- prevent insubordination or non-cooperation at work; and
- expect employees to perform work and follow directives during working time.

Disruptive Behavior Rules

The General Counsel stated that:

The majority of conduct covered under this type of rule is unprotected roughhousing, dangerous conduct, or bad behavior, which:
- employees often do not interpret as applying to Section 7 activity; and
- is unlikely to deter employees from engaging in protected activities, such as strikes and walkouts.
Legitimate justifications for these rules include:
- discouraging conduct that may result in injury to employees and others; and
- enhancing workplace productivity by preventing fighting and other shenanigans.

Rules Protecting Confidential, Proprietary, and Customer Information or Documents

Examples include rules that make no mention of employee or wage information and prohibit disclosure of:

Customer information.
Confidential financial data or other non-public proprietary company information.
Business secrets.

The General Counsel stated that:

The majority of conduct affected by these confidentiality rules is unrelated to Section 7, noting that:
- even under Lutheran Heritage, a broad ban on discussing confidential or proprietary information, or trade or business secrets, did not implicate Section 7 rights unless the rule specifically included terms and conditions of employment;
- employees would not generally understand a ban on discussing customer information as applying to legitimate public relations campaigns or boycotts; and
- employees do not have a right under the NLRA to disclose employee information obtained from unauthorized access or use of confidential records, or to remove records from the employer's premises.
Employers have an obvious need to protect confidential and proprietary information, as well as customer information, to protect their business reputation and avoid significant legal liability.

Rules Against Defamation or Misrepresentation

Examples include rules that prohibit:

Misrepresenting the employer's products, services, or employees.
Emailing defamatory messages.

The General Counsel stated that:

Rules banning defamation are not likely to cause employees to refrain from protected concerted activity, and the majority of conduct prohibited by these rules is not protected under the NLRA.
Employers have a significant interest in protecting themselves, their reputations, and their employees from defamation and slander.

Rules Against Using Employer Logos or Intellectual Property

The General Counsel stated that:

Although some protected concerted activity may fall under these rules (for example, fair use of this information on a picket sign or leaflet):
- employees generally understand this type of rule as protecting the employer's intellectual property from commercial and other non-Section 7-related uses;
- the rule is unlikely to deter employees from fair use of a logo on a picket sign or leaflet; and
- in the event employees did refrain from fair use of an employer's logo or intellectual property, this chill would have only a peripheral effect on Section 7 rights.
Employers have a significant interest in:
- protecting their intellectual property, including logos, trademarks, and service marks (which can be worth millions of dollars); and
- ensuring that employee social media posts do not appear to be official because of the employer's logo.

Rules Requiring Authorization to Speak for Company

The General Counsel stated that:

Where the rule merely regulates who is authorized to speak on behalf of the company, there is normally no impact on Section 7 rights.
Employers have a significant interest in ensuring that only authorized employees speak for the company, especially in crisis control situations.

Rules Banning Disloyalty, Nepotism, or Self-Enrichment

The General Counsel stated that:

Even before Boeing, the Board has historically interpreted rules banning disloyalty and blatant conflicts of interest to not have any meaningful impact on Section 7 rights.
Employers have a legitimate and substantial interest in preventing conflicts of interest like nepotism, self-dealing, or maintaining a financial interest in a competitor, as these conflicts of interest can:
- have a serious detrimental effect on an employer's revenue;
- undermine a company's reputation and integrity; and
- cause employees to doubt the fairness of personnel decisions.

Category 2: Rules Warranting Individualized Scrutiny

The General Counsel stated that:

Category 2 rules must be evaluated on a case-by-case basis to determine:
- whether the rule would interfere with rights guaranteed by the NLRA; and
- whether any adverse impact on those rights is outweighed by legitimate justifications.
The legality of Category 2 rules often depends on context and other relevant factors, including:
- its placement among other rules;
- the kinds of examples provided;
- the type and character of the workplace;
- evidence that a rule has actually chilled Section 7 activity; and
- the ease with which an employer could tailor the rule to accommodate both its business interests and employees' Section 7 rights.

Examples of possible Category 2 rules include:

Broad conflict of interest rules that do not:
- specifically address employee fraud and self-enrichment (a Category 1 rule); or
- restrict membership in or voting for a union (a Category 3 rule).
Confidentiality rules broadly encompassing "employer business" or "employee information," as opposed to confidentiality rules directed at:
- customer or proprietary information (a Category 1 rule); or
- employee wages, terms of employment, or working conditions (a Category 3 rule).
Rules regarding disparagement or criticism of the employer, as opposed to civility rules regarding disparagement of employees (a Category 1 rule).
Rules regulating use of the employer's name, as opposed to rules regulating use of the employer's log or trademark (a Category 1 rule).
Rules generally restricting speaking to the media or third parties, as opposed to rules that restrict speaking to the media on the employer's behalf (a Category 1 rule).
Rules banning off-duty conduct that might harm the employer, as opposed to rules that ban:
- insubordinate or disruptive conduct at work (a Category 1 rule); or
- participation in outside organizations (a Category 3 rule).
Rules against making false or inaccurate statements, as opposed to rules against making defamatory statements (a Category 1 rule).

Category 3: Rules that are Unlawful to Maintain

The General Counsel stated that Category 3 rules are generally unlawful because:

They would prohibit or limit NLRA-protected conduct.
The adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule.

Examples of Category 3 rules include:

Confidentiality rules specifically regarding wages, benefits, or working conditions.
Rules against joining outside organizations or voting on matters concerning the employer.

Practical Implications

This memo provides guidance to employers on the current General Counsel's analysis of different employment policies under the Boeing framework. However, employers should be aware that this memo:

Is not binding precedent.
Can be revised, clarified, abandoned, or rescinded by this or any subsequent General Counsel.

Employers should continue to:

Avoid unlawful application of a Category 1 by using it to prohibit protected concerted activity or to discipline employees engaged in protected concerted activity.
Be prepared to show its legitimate business reasons for maintaining and enforcing any Category 2 rule.
Avoid maintaining any rules that fall within Category 3.

For more information on Boeing, see Legal Update, NLRB Establishes New Standard Governing Workplace Policies and Upholds No-Camera Policy.

UPDATE

On February 1, 2021, NLRB Acting General Counsel Peter Sung Ohr rescinded General Counsel Memorandum GC 18-04, deeming it unnecessary given the number of subsequent Board precedent interpreting and applying Boeing (NLRB Gen. Counsel Mem. 21-02, Rescission of Certain General Counsel Memoranda (Feb. 1, 2021)). For more information on Boeing and its progeny, see The NLRB's Boeing Categories for Employment Rules Chart.

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).

NLRB General Counsel Issues Guidance on Handbook Rules Post-Boeing | Practical Law