Employers rejoiced in December 2017 when the National Labor Relations Board (“NLRB”) issued its decision in The Boeing Company
, 365 NLRB No. 154 (Dec. 14, 2017), overthrowing its precedent regarding employers' handbooks. The Boeing
decision was much more employer-friendly, creating a new three-category system by which the NLRB balances an employer’s right to maintain discipline and productivity in the workplace with the individual employee's ability to exercise his or her Section 7 rights. The new categories were welcomed, but caused considerable confusion. What handbook rules fell into each category? Which categories were lawful under the National Labor Relations Act (“NLRA”)? Without additional guidance, employers were unsure how to implement the Boeing
Recognizing this uncertainty, the NLRB’s General Counsel issued a memorandum on June 6, 2018 (GC 18-04) (the “Guidance”), further explaining Boeing’s
three category system. The Guidance describes each category in detail, explaining the employer’s potential justification for the rule, quoting model handbook language, and reciting the “balance” the NLRB determined for each category. The most important part, however, was its identification of (a) which handbook rules fell into each category and (b) which categories were lawful under the NLRA.
Category 1: Rules That are Generally Lawful to Maintain
These rules are generally lawful if (a) when reasonably interpreted, it does not prohibit or interfere with the exercise rights or (b) the potential adverse impact on protected rights is outweighed by the business justification for the rule. These Category 1 rules include:
Category 2: Rules Warranting Individualized Scrutiny
- Civility rules (prohibition of rude, condescending, or disparaging behavior towards other employees or customers);
- No-photography and no-recording rules;
- Rules against insubordination, non-cooperation or on-the-job conduct that adversely affects operations;
- Disruptive behavior rules (prohibition of boisterous, disruptive or disorderly conduct);
- Rules protecting confidential, proprietary, and customer information or documents;
- Rules against defamation or misrepresentation ;
- Rules against using employer logos or intellectual property;
- Rules requiring authorization to speak for company; and
- Rules banning disloyalty, nepotism or self-enrichment.
A Category 2 rule is not obviously lawful or unlawful and must be evaluated on a case-by-case basis, with special emphasis on the rule’s context and how the average employee would interpret the rule in his or her day-to-day duties. The Guidance states all Category 2 rules should be submitted to the NLRB for advice, unless there is Board jurisprudence applying Boeing
to that specific rule. Because Boeing
is so recent, the practical result is that all Category 2 rules will be submitted for advice. Examples of these types of rules include:
Category 3: Rules Generally Unlawful to Maintain
- Broad conflict-of-interest rules that do not specifically target fraud or self-enrichment and do not restrict membership in (or voting for) a union;
- Confidentiality rules broadly encompassing “employer business” or “employee information” (in contrast with confidentiality of customer or propriety information);
- Rules regarding disparagement or criticism of the employer (as opposed to disparagement of fellow employees);
- Rules regulating the use of employer’s name (as opposed to regulation of use of employer’s logo/trademark);
- Rules generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employers behalf);
- Rules banning off-duty conduct that might harm the employer (as opposed to rules banning insubordinate or disruptive conduct at work); and
- Rules against false or inaccurate statements.
Rules in this category are generally unlawful because they would prohibit or limit NLRA-protected conduct, and this adverse impact outweighs any justification associated with the rule. The Guidance states Regions should issue complaints on these rules, absent settlement; if, however, an employer believes there are special circumstances that could render a Category 3 rule lawsuit, the employer must submit the case to advice. This category would include the following types of rules:
- Confidentiality rules specifically regarding wages, benefits or working conditions;
- Rules against joining outside organization; and
- Rules requiring employees to remove themselves from discussing or voting on matters concerning the employer.
Overall, the Guidance offers much needed specificity regarding the legality of employer handbooks under the NLRA. In light of the Boeing
decision and this Guidance, employers are encouraged to review their handbook policies to see where they can strengthen certain policies (i.e., Category 1 policies) or revise others (i.e., Category 3). Employers should speak to counsel regarding any Category 2 policies and may wish to submit them to the Board for Advice in order to be fully confident that the rule is permissible. Spilman will stay abreast of new decisions from the Board or guidance from the General Counsel’s office as the Board continues to apply Boeing
and this Guidance.