New NLRB memo talks permissible vs. impermissible handbook rules in light of Boeing

In the aftermath of its December 2017 The Boeing Company decision, the National Labor Relations Board has issued new guidance on handbook rules. The June 7 General Counsel memorandum provides general guidance for Regions about the placement of various types of rules into the three categories set out in Boeing, as well as the Section 7 interests, business justifications, and other considerations that Regions should take into account in arguing to the Board that specific Category 2 rules are unlawful.

Rules categories. The memo provides instruction as to each of the three categories of rules set forth in Boeing:

• Category 1: Rules that are generally lawful to maintain

• Category 2: Rules warranting individualized scrutiny

• Category 3: Rules that are unlawful to maintain

Category 1: The types of rules in this category are generally lawful, either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the National Labor Relations Act, or because the potential adverse impact on protected rights is “outweighed by the business justifications” associated with the rule, according to the memo. Charge allegations alleging that rules in this category are facially unlawful should be dismissed, absent withdrawal.

However, if a Region believes that special circumstances render a normally lawful rule under Category 1 to be unlawful, for example, due to a unique industrial setting, the history of the rule’s application, or direct evidence of employee chill, the Region should submit the case to the Division of Advice. Notably, merely maintaining a facially lawful rule does not determine whether the rule was applied lawfully.

The memo provides examples of Category 1 rules that in include several general types and specific examples of what is deemed acceptable. The following types of rules fall into this category:

• Civility rules

• No-photography and no-recording rules

• Rules against insubordination

• Non-cooperation, or on-the-job conduct that adversely affects operations rules

• Disruptive behavior rules

• 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 the company

• Rules banning disloyalty, nepotism, or self-enrichment

Category 2 rule. The rules in this category are not obviously lawful or unlawful, and must be evaluated on a case-by-case basis to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications. In the absence of any Board jurisprudence applying Boeing to a Category 2 rule, Regions should submit all Category 2 rules to Advice.

Examples of possible Category 2 rules include:

• Broad conflict-of-interest rules that do not specifically target fraud and self-enrichment and do not restrict membership in, or voting for, a union.

• Confidentiality rules broadly encompassing “employer business” or “employee information” (as opposed to confidentiality rules regarding customer or proprietary information, or confidentiality rules more specifically directed at employee wages, terms of employment, or working conditions).

• Rules regarding disparagement or criticism of the employer (as opposed to civility rules regarding disparagement of employees).

• Rules regulating use of the employer’s name (as opposed to rules regulating use of the 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 employer’s behalf).

• Rules banning off-duty conduct that might harm the employer (as opposed to rules banning insubordinate or disruptive conduct at work, or rules specifically banning participation in outside organizations).

• Rules against making false or inaccurate statements (as opposed to rules against making defamatory statements)

Category 3. Rules in this category are generally unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule. Regions should issue complaints on these rules, absent settlement. However, if the Region believes that special circumstances render lawful a rule that normally would fall in Category 3, it should submit the case to the Division of Advice.

The memo lists in this category:

• Confidentiality rules specifically regarding wages, benefits, or working conditions; and

• Rules against joining outside organizations or voting on matters concerning the employer

Substantial change. Not only did the Board in Boeing add a balancing test, it also significantly altered its jurisprudence on the reasonable interpretation of handbook rules. The Trump Board “severely criticized” Lutheran Heritage and its progeny for prohibiting any rule that could be interpreted as covering Section 7 activity, as opposed to only prohibiting rules that would be so interpreted. The new memo states that ambiguities in rules are no longer interpreted against the drafter, and generalized provisions should not be interpreted as banning all activity that could conceivably be included.

What has not changed. The memo notes Boeing did not alter well-established standards on certain kinds of rules where the Board has already struck a balance between employee rights and employer business interests, as in, for example, the balancing test involved in assessing the legality of no-distribution, no-solicitation, or no-access rules. Nor did Boeing deal with the “special circumstances” test of apparel rules, although it may apply to aspects of apparel rules that are alleged to be unlawfully overbroad.

Maintenance of facially neutral rules. As specifically noted in the decision, Boeing applied only to the mere maintenance of facially neutral rules. Rules that specifically ban protected concerted activity, or that are promulgated directly in response to organizing or other protected concerted activity, remain unlawful, the memo notes. In Boeing, the Board also held that the application of a facially neutral rule against employees engaged in protected concerted activity is still unlawful. A neutral handbook rule does not render protected activity unprotected.

Not yet determined.Boeing’s effect on rules about confidentiality of discipline or arbitration, or rules that potentially limit employees’ access to Board processes, has not yet been determined, according to the memo. Accordingly, when presented with such rules, Regions are instructed under the memo to submit the case to the Division of Advice.

Source: information from Pamela Wolf, J.D.