NLRB General Counsel Issues Guidance on Handbook Rules and Policies

In The Boeing Company, 365 NLRB No. 154 (December 14, 2017), the Board established a new test for determining whether a handbook rule or policy interfered with the employees' protected rights under the National Labor Relations Act ("Act"). On June 6, 2018, the General Counsel issued a Memorandum titled "Guidance on Handbook Rules Post-Boeing" ("Memorandum"). The Memorandum delineated how the Regions should apply the new test to certain specific types of rules and policies.  

Under the new test, the Board balances the rule's negative impact on employee's ability to exercise their rights under the Act and the rule's connection to an employer's right to maintain discipline and productivity. The Board identified three categories of rules and policies, ranging from generally legal to always illegal.

The Memorandum identified specific rules that will likely fall under each of the same three categories. However, consistent with Boeing decision, the Memorandum recognized that, even if a rule falls within a lawful category, an employer will still violate the Act if it applies the policy so as to ban protected activity or promulgates the rule in response to protected activity.

Category 1 Rules

Category 1 rules are those that are generally lawful either because (1) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights under the Act, or (2) the potential adverse impact on protected rights is outweighed by justifications associated with the rule. The Memorandum cited the following examples of rules that fall into Category 1 and generally will be treated as lawful:

1. Civility Rules, such as "Behavior that is rude, condescending, or otherwise socially unacceptable is prohibited;"
2. No Photography Rules and No-Recording Rules, such as "Employees may not record conversations, phone images or company meetings with any recording device without approval;"
3. Rules Against Insubordination, Non-Cooperation, or On-the-job Conduct that Adversely Affects Operations, such as "Insubordination to a manager or lack of … cooperation with fellow employees or guests' is prohibited;"
4. Disruptive Behavior Rules, such as "Creating a disturbance on Company premises or creating discord with clients or fellow employees;"
5. Rules Protecting Confidential, Proprietary, and Customer Information or Documents, such as "Do not disclose confidential financial data, or other non-public proprietary company information."
6. Rules Against Defamation or Misrepresentation, such as"[M]isrepresenting the company's products or services or its employees is prohibited;"
7. Rules Against Using Employer Logos or Intellectual Property, such as "Do not use any Company log, trademark, or graphic [without] prior written consent."
8. Rules Requiring Authorization to Speak for the Company, such as "The Company will respond to media request for the Company's position only through the designated spokespersons."
9. Rules "Banning Disloyalty, Nepotism, or Self-Enrichment, such as "Employees may not engage in conduct that is ‘disloyal … competitive, or damaging to the company …."

Category 2 Rules

Category 2 rules are not obviously lawful or unlawful and must be evaluated on a case-by-case basis to determine whether the rule would prohibit or interfere with the employees' protected rights and, if so, whether the adverse impact on protected conduct is outweighed by legitimate justifications. The Memorandum cited the following as possible examples of Category 2 rules:

1. Broad Conflict of Interest Rules, such as those that do not specifically target fraud and self-enrichment;
2. Broad Confidentiality Rules, such as those that encompass employee information and terms and conditions of employment;
3. Rules Regarding Disparagement or Criticism of the Employer (as opposed to civility rules regarding conduct toward other employees);
4. Rules Regulating the Use of the Employer's Name (as opposed to the employer's logo/trademark);
5. Rules Generally Restricting Speaking to the Media or Third Parties (as opposed to rules restricting speaking to the media on the employer's behalf);
6. Rules Banning Off-Duty Conduct that Might Harm the Employer (as opposed to rules banning insubordination or disruptive conduct at work); and
7. Rules Against Making False or Inaccurate Statements (as opposed to rules against making defamatory statements).

Category 3 Rules

Category 3 Rules are unlawful because they would prohibit or limit the employees' protected rights and the adverse impact on their rights is not outweighed by the business justification for the rule. The Memorandum cited the following as possible examples of Category 3 rules:

1. Confidentiality Rules Regarding Wages, Benefits, or Working Conditions, such as "Employees are prohibited from disclosing salaries, contents of employment contracts;"
2. Rules that Prohibit Disclosing Working Conditions to the Media, such as "Employees are prohibited from disclosing to any media source information regarding employment at [Employer], the working conditions of [Employer], or any … staff member."
3. Rules Against Joining Outside Organizations or Voting on Matters Concerning the Employer.

In sum, the Memorandum makes clear that many handbook rules and policies that had been deemed unlawful over the past several years will now be sustained as lawful. However, in some cases, slightly different wording or scope can mean the difference between a lawful rule and a potentially unlawful rule, and employers should be prepared to advance a legitimate business justification for their rules to help outweigh the potential impact on the employees' protected rights in questionable cases.