NLRB Sides with Unions in Targeting Employee Handbooks

NLRBOrientation is a challenging time at a workplace. New hires find themselves having to learn a lot in a short time. That’s why their employers provide them with handbooks explaining the rules and addressing potential questions about them. Unions, however, see these pamphlets as thinly-veiled attempts to suppress worker organizing rights. During the Obama years, they have had an unofficial partner in the National Labor Relations Board. A new monograph published by the U.S. Chamber of Commerce, “Theater of the Absurd: The NLRB Takes on the Employee Handbook,” should dispel any doubts that this alliance is real. The 43-page report, written by Chamber senior staffer Sean Redmond, documents how the ostensibly “neutral” five-member board now sides regularly with unions over handbook-related complaints that have little, if any, validity.

Section 7 of the National Labor Relations Act of 1935 (NLRA) protects the right of workers to engage in “concerted activity” for “mutual aid or protection” to negotiate with employers. The National Labor Relations Board, established under NLRA, defines “concerted activity” as “two or more employees acting together to improve wages or working conditions.” This, in essence, is unionism. Employers may offer their own views on the merits of unionism, or of a particular union, but they can’t block attempts to organize. Nor can they retaliate, or threaten to retaliate, against any individual worker for engaging in union activity. Yet there is room for interpretation here. While employers can’t interfere with union activity, they can take steps to ensure that the workplace operates safely and efficiently, immune from sabotage, coercion, fraud and other illegal acts. A job site, among other things, is business property.

The current NLRB lodestar in defining the application of Section 7 to handbook policy is its 2004 ruling, Lutheran Heritage Village-Livonia. The Board concluded that even if a workplace rule does not explicitly ban protected worker activity, it is unlawful anyway if: 1) employees would reasonably construe the language to prohibit Section 7 activity; 2) the rule was created in response to Section 7-protected activity; or 3) the rule has been applied to restrict Section 7-protected activity. With this expanded definition of employer interference, the Board has opened the door to a wide range of union complaints whose potential now is being realized.

By custom, three Board members belong to the political party in power; the other two belong to the party in opposition. During the Obama era, this translates into a 3-2 Democratic majority, given a full board. And this advantage has been magnified greatly by opinions issued by the Office of General Counsel, first headed by Lafe Solomon (in an acting role) and now by Richard Griffin, the latter of whom had been a lawyer for the International Union of Operating Engineers and then an NLRB board member prior to assuming his current position. Unions recognize this is an optimal time to force employers to justify handbook prohibitions. The Chamber of Commerce’s “Theater of the Absurd” explains:

(T)he current Board seems to have adopted a new definition of the word “reasonably.” Indeed, it is one that few reasonable people would recognize. The NLRB has gone to outlandish lengths to find commonsense workplace policies unlawful for violating Section 7 rights, even scouring employee handbooks to find purported violations in cases where the handbook has nothing to do with the underlying charge.

The monograph notes that Board rulings often run counter to rules promulgated by other federal agencies, such as the Equal Employment Opportunity Commission and the U.S. Patent Office. Moreover, the Board Office of General Counsel’s employer guidance memorandum, issued in March 2015, blurs the line between the legal and the illegal to almost comic effect. The report cites the following “illegal” (as interpreted by NLRB) handbook provision: “[Be] respectful to the company, other employees, customers, partners and competitors.” Here, by contrast, is an example of what the NLRB sees as “legal”: “Each employee is expected to work in a cooperative manner with management/supervision, co-workers, customers and vendors.” To any rational person, these two provisions are effectively identical. Yet the National Labor Relations Board, perhaps possessed of a sadistic streak, is committed to establishing hair-splitting “differences” such as these in hopes of creating opportunities for lawsuits against employers.

The current NLRB has an undeniable propensity for suing employers and encouraging unions to do likewise. Defining Section 7 violations as broadly as possible, the Board during the Obama years has been behind a wide range of handbook-related Unfair Labor Practice (ULP) complaints, especially since July 2013, when Senate Democrats forcibly filled longstanding Board vacancies to establish a 3-to-2 pro-union majority. The Chamber of Commerce report provides numerous case summaries, by category, of frivolous suits. Examples:

Confidentiality. This is a common basis for complaints. Most handbooks contain confidentiality clauses relating to issues beyond wages, hours and other terms of employment covered by Section 7 of the NLRA. Such issues often involve allegations and investigations of misconduct, where the rumor mill may undermine morale and the search for material facts. The National Labor Relations Board somehow has insisted on seeing violations of Section 7. In Banner Health, the Board overruled an Administrative Law Judge who had defended a company policy requiring confidentiality in workplace investigations. The NLRB concluded the policy violated employee rights. The company appealed the decision in federal circuit court. The NLRB majority, despite having been ordered by the court to rehear the case, last June again declared the policy unlawful. Dissenting Member Philip Miscimarra noted that the Board’s actions contradicted its own stated policy. The case remains unresolved. In another case, an employee at Boeing, after filing a complaint against her supervisor, disclosed information about that supervisor, in violation of company policy. After being disciplined, the employee filed an Unfair Labor Practice charge. The NLRB ordered the company to rescind its disciplinary action and its newer, relaxed confidentiality policy. Not only that, it declared Boeing’s “failure” to publicly repudiate its confidentiality language a Section 7 violation in itself. The Chamber report notes similar legal contrivances in the NLRB cases of Costco, Stant USA Corporation and Piedmont Gardens.

Employee Misconduct. In its March 2015 memorandum, the NLRB’s Office of General Counsel effectively jeopardized employee handbook prohibitions against bad behavior on the part of employees. It declared: “A rule that prohibits employees from engaging in ‘disrespectful,’ ‘negative,’ ‘inappropriate,’ or ‘rude’ conduct towards an employer or management, absent sufficient clarification or context, will usually be found unlawful.” In other words, defamation is not a problem so long as it is directed against management. Even more unbelievably, the OGC memo added, “(E)mployee criticism of an employer will not lose the Act’s protection simply because the criticism is false and defamatory.” In effect, employer policies designed to foster workplace cooperation should be unenforceable. More than once, the Board has put this bizarre doctrine into practice. In Casino San Pablo, the NLRB ruled as “ambiguous” an employer rule barring “insubordination or other disrespectful conduct (including failure to cooperate fully with Security, supervisors and managers).” Going beyond even the Heritage Lutheran Village standard, the Board declared that “ambiguous employer rules – rules that reasonably could be read to have a coercive meaning – are construed against the employer.” Thus, an employer must be assumed to be in the wrong if the tiniest doubt exists about the legality of a handbook rule. Every bit as ludicrous was the Board’s ruling in Care One Management. The powerful health care union, Service Employees Local 1199, had just lost a very close representation vote. Several pro-union workers, bitter over the result, issued threats of violence against their peers who had opposed unionization. To discourage attacks, Care One posted a memo, “Teamwork and Dignity and Respect,” alongside its Workplace Violence Prevention Policy. Apparently, the National Labor Relations Board saw this benign and needed gesture as undermining worker rights. Employees reading the memo, the Board argued, would “reasonably” interpret it as prohibiting union organizing.

“Commercial Purposes.” This phrase may well provide the most desperate example of scouring employee handbooks to “discover” suppression of workers’ rights. The United Food and Commercial Workers had just lost a representation election at a Target retail store in New York by a 137-85 margin. The union filed a complaint with the Board, claiming employer interference. It demanded a new election. NLRB investigators subsequently pored through the Target employee handbook in search of smoking guns. They found them. The handbook contained a rule limiting solicitation on its properties relating to activities other than community outreach. The rule cited “commercial purposes,” but said nothing about union organizing. Yet in dissecting the phrase “commercial purposes,” the Board concluded that employees might interpret it as a ban on union organizing. “Whether the Respondent actually intended this interpretation is beside the point,” read the ruling. The Board also found Target’s policy against disclosing confidential information to be unlawful. These two provisions were enough for the NLRB to set aside the election results.

How does one account for the National Labor Relations Board’s eagerness to punish employers for establishing reasonable workplace rules? Two plausible explanations stand out.

First, as the Chamber of Commerce report notes, the NLRB’s workload has been dropping. During 2005-14, the number of representation election petitions submitted to the Board fell from 4,022 to 2,053 and the number of actual elections fell from 2,227 to 1,405. These are sharp declines. Yet during this period, the inflation-adjusted Board budget changed very little. Common sense suggests that the National Labor Relations Board, desperate to maintain staffing levels, has been grasping at anything to look useful. Parkinson’s Law is well and alive at the NLRB.

Second, the three Democrats on the current Board – Chairman Mark Gaston Pearce, Lauren McFerran and Kent Hirozawa – lean well to the political Left, arguably even more so than Democrats in bygone years. That is a reason why President Obama nominated them in the first place. (A genuine radical, Craig Becker, an NLRB recess appointee during part of Obama’s first term, had been a lawyer for the Service Employees International Union and, since then, has served as AFL-CIO general counsel). These are zealots who put union interests ahead of fealty to the National Labor Relations Act. This goes as well for NLRB General Counsel Richard Griffin. Michael Lotito, co-chair of the Workplace Policy Institute, an initiative of the San Francisco-based employer law firm of Littler Mendelson, describes Griffin this way: “If you’re a management person, you’re going to say Mr. Griffin’s term is one of the most dramatic activist terms of any general counsel in history.”

Such cases suggest a National Labor Relations Board almost out of control. And the Board likely will issue similar rulings for a while even after President Obama leaves office. The current terms of Pearce and McFerran expire, respectively, in August 2018 and December 2019. Even if and when the Board majority becomes Republican, its Obama-era precedents may stand for many years. To reverse course, the Board must restrict the applicability of Lutheran Heritage Village, if not overturn it altogether. More broadly, it must cease projecting motive onto innocuous clauses in employer handbooks in order to make life miserable for employers and non-joining workers. The practice corrupts the NLRB mission. Defending a worker’s right to organize or join a union shouldn’t be a license to make a mockery of law and common sense.


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