201-896-4100

Does Your Employee Handbook Pass Muster?


April 2, 2015
« Next Previous »

Employers frequently adopt an employee handbook that, despite attempts to provide aspects that distinguish the effort as being personal to that employer, follow well-worn scripts reflecting “conventional wisdom.”

Such reliance on well-worn text is being undermined by the recent actions of the National Labor Relations Board’s (NLRB) Office of the General Counsel which recently published a comprehensive report on employee handbook rules. While the report confirms that the NLRB will continue to broadly apply the National Labor Relations Act (NLRA) to employee rules, it does offer employers a clearer picture of what will pass muster. At its outset, the “Report of the General Counsel Concerning Employment Rules” acknowledges that most employers do not draft their employee handbooks with the object of prohibiting or restricting conduct protected by the National Labor Relations Act (NLRA). However, it further notes that “the law does not allow even well-intentioned rules that would inhibit employees from engaging in activities protected by the Act.”

The National Labor Relations Act

As previously discussed on the Scarinci Hollenbeck Business Law News Blog, Section 7 of the NLRA protects employees who engage in “concerted activity,” which is defined acting together to improve the terms and conditions of employment, including their wages, job performance, and staffing levels. Meanwhile, Section 8(a)(1) forbids an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” Under the NLRB’s decision in Lutheran Heritage Village-Livonia, simply enacting an employee rule may violate Section 8(a)(1) if it has a chilling effect on employees’ Section 7 activity, such as a rule prohibiting union activity. In addition, even if a rule does not explicitly prohibit Section 7 activity, it may still be found unlawful if 1) employees would reasonably construe the rule’s language to prohibit Section 7 activity; 2) the rule was promulgated in response to union or other Section 7 activity; or 3) the rule was actually applied to restrict the exercise of Section 7 rights.

The NLRA and Employee Handbooks

The NLRB’s report outlines several recent decisions involving unfair labor practice charges tied to the adoption of employee handbooks. Topics addressed include confidentiality rules, anti-harassment rules, trademark rules, social media rules, and media contact rules. In addition to detailing why the handbook provisions were unlawful, the Board also offers examples of how they could be altered to become compliant. For instance, the NLRB discusses several rules contained in Wendy’s International’s employee handbook that the Board deemed facially invalid, as well as the steps the hamburger chain took to remedy them pursuant to a settlement agreement. As the report notes, sometimes the difference between an unlawful rule and a lawful one is relatively minor. Wendy’s handbook expressly prohibited any copying or disclosure of its contents. After narrowing the language to prohibit copying “for any business/commercial venture,” the NLRB deemed the provision acceptable. Given the NLRB’s aggressive enforcement stance, employers and their general counsel should review the Board’s latest report and take a fresh look and reevaluate their handbooks accordingly.