WORKPLACE LAW – Expanding Felxibility in Employee Handbooks

Question: I am drafting an employee handbook for my business. I keep reading about new NLRB guidance on employee handbooks. Does that apply to non-union employers in California?

Answer: On June 6, 2018, the General Counsel for the National Labor Relations Board (“NLRB”) issued guidance on the legality of certain handbook rules. The guidance applies to private-sector employers in union and nonunion workplaces. It expands upon the NLRB’s recent shift towards affording employers more deference and flexibility in crafting employee handbook policies.

In recent years, the NLRB has imposed significant limitations on handbook policies in union and non-union workplaces, even if the policies were facially neutral and based on legitimate business reasons. The NLRB determined the legality of policies based on whether workers could “reasonably construe” them as limiting their rights under the National Labor Relations Act (NLRA) to engage in protected concerted activity, i.e., working together to improve their pay and working conditions. However, the NLRB’s December 2017 Boeing Company decision signaled a substantial shift to a standard of evaluating the nature and extent of the potential impact of employer policies on NLRA rights, and the employer’s legitimate justifications associated with the policies.

The guidance expands on the Boeing decision and describes three categories of workplace rules: (1) Rules that are Generally Lawful; (2) Rules Warranting Individualized Scrutiny; and (3) Rules that are Usually Unlawful.

1) Generally Lawful Rules

The NLRB will now generally hold rules on the following to be valid:
• Civility, including prohibitions on rude, condescending, or socially unacceptable behavior and negative or disparaging comments about employees or customers;
• Prohibiting photography and recording due to concerns for security and protection of proprietary, confidential, and customer information;
• Insubordination;
• Disruptive behavior;
• Protecting confidential, proprietary, and customer information;
• Prohibiting the use of employer logos or intellectual property;
• Prohibiting defamation or misrepresentation of company products, services, or employees;
• Requiring authorization to speak on behalf of the company; and
• Banning disloyalty, nepotism, or self-enrichment.

2) Rules Warranting Individualized Scrutiny

Rules on the topics including the following may be subject to NLRB scrutiny on a case-by-case basis:
• Conflict-of-interest if overbroad;
• Banning off-duty conduct that might harm the employer;
• Confidentiality if overbroad;
• Prohibiting disparagement or criticism of the employer (as opposed to disparagement of employees);
• Regulating use of the employer’s name (as opposed to use of the employer’s logo or trademark);
• Restricting speaking to the media or third parties (as opposed to speaking to the media on the employer’s behalf); and
• Prohibiting making false or inaccurate statements (as opposed to defamatory statements).

3) Unlawful Rules

Rules on the following are usually unlawful:

• Confidentiality prohibiting employees from discussing wages, benefits, working conditions, or other terms of employment;
• Prohibiting joining outside organizations or voting on matters concerning the employer.

The guidance provides needed clarity to employers who are drafting handbook policies, and instructs NLRB regional offices that ambiguities in handbook rules can no longer be interpreted against the employer.

In addition to the NLRB guidance, several bills are pending in the State Legislature that may affect your policies depending on the nature of your business. You may want to wait to finalize your handbook until after September 30, 2018, the last day the Governor can sign or veto bills.