By Charles S. Einsiedler, Jr.
In January, we told you about recent activity by the National Labor Relations Board that overturned or departed from settled precedent. As promised, in Part 2 of this Alert series we summarize recent decisions where the Board focused on the non-unionized employer.
Ironically, on the same day the D.C. Circuit found all actions of the Board to be void because of the recess appointments of three of its members, the Board issued its most far-ranging decision, striking down four mainstream policies issued by DirecTV. As a result of this decision, every employer needs to review carefully all of its policies that restrict dissemination of Company information or which in any way restrict employee communications.
Board Invalidates Work Rules on Non-Disclosure, Non-Disparagement, and Restrictions on Media Contact
As we have reported in several alerts over the past year (click here and here), the Board has made no secret about its view that employers may violate the National Labor Relations Act by disciplining employees for comments made on social media or by placing limits on what employees can say on social media. Social media policies are not the only work rules that the Board is scrutinizing.
In late January, the Board found that four of DirecTV’s employment policies violated the National Labor Relations Act. The policies were garden variety versions of what many employers have in the areas of confidentiality and communications. The Board did not find that the Company had enforced improperly any of the policies in question. Nevertheless, the Board ordered that the policies be immediately rescinded and that DirecTV post a notice that it has engaged in unfair labor practices at all of its facilities in which the policies were in place.
One of those policies directed employees not to contact the media, to direct all media inquiries to the communications department, and not to comment to the media unless authorized. The Board found the rule unlawful because employees would reasonably interpret the “unequivocal” and “broad” language in this rule as prohibiting protected communication to the media about labor disputes, even though the policy said nothing about labor disputes.
The Board also found unlawful a work rule requiring employees to contact the security department if “law enforcement” wants to interview or obtain any information regarding an employee. The Board reasoned that the rule was ambiguous because employees would reasonably believe that Board investigators were “law enforcement” and would thus believe they were prevented from speaking to them, even though there was no evidence anything like this had actually happened.
DirecTV also had a “confidentiality rule” prohibiting employees from discussing “details about your job, company business or work projects” and directing that “company information” including “employee records” must be held confidential. The Board found that employees would understand this rule to restrict discussion of wages and working conditions and was, thus, unlawful. Finally, the Board found unlawful a policy restricting employees from posting online any “company information” that is not already a public record because “company information” was defined in the “confidentiality rule” to include employee records.
The DirecTV decision comes on the heels of a similar decision in early January by an administrative law judge (ALJ) involving Quicken Loans. The Quicken Loans case has broad ranging implications relating to enforcement of non-disparagement, confidentiality, and no-raiding clauses. In that case, Quicken Loans had all its mortgage bankers sign confidentiality agreements concerning disclosure of personnel information. The agreement also prohibited former employees from soliciting or contacting Quicken Loans employees and from competing with Quicken Loans. The charging party (Garza) left Quicken Loans and began to raid Quicken’s employees and compete, both in violation of her employment agreement. The ALJ ordered Quicken Loans to “cease and desist” from enforcing the policy and further ordered the Company to rescind its policy and agree not to enforce it. The ALJ reasoned that the policy was overly broad because it prohibited lawful discussions of wage and working conditions; further by limiting “solicitation” it prohibited lawful union organizing activities.
These decisions are an illustration of the current Board’s emphasis on non-unionized employers as well as the apparent ease with which it interprets work rules to be “ambiguous” or impermissibly “broad” even if the policy was not intended to prohibit “protected activity”. Employers placing otherwise reasonable limits on employee communication must make clear that the limits do not apply to protected activity (such as communication about wages or labor disputes). Unfortunately, we also know from the social medial cases that employers cannot simply include a general disclaimer in their policies but must illustrate or clearly explain the type of behavior that is allowed under the rule. Striking the right balance – or at least a balance that the current Board accepts - is difficult and requires a careful analysis of existing policies.
At-Will Clauses in Employee Handbooks
Many employers have clauses in handbooks stating that employees are “at-will” and that the at-will status cannot be changed by managers or supervisors. Last year, in a decision that garnered a significant amount of attention, an ALJ found an American Red Cross handbook provision that stated that “the at-will employment relationship cannot be amended, modified or altered in any way” to be unlawful because employees could reasonably construe it to prevent them from attempting to change the at-will status through collective action.
In late 2012, Board Acting General Counsel weighed in the issue of under what circumstances “at-will” clauses violate the National Labor Relations Act. In two separate opinion letters, the Acting General Counsel opined, somewhat surprisingly, that clauses that limit who has the authority to enter into an agreement for employment for a period of time but do not expressly state that the at-will status can never be changed are lawful.
In one case, the handbook provision stated that only the president of the company had the authority to enter into an agreement for employment for a specified period of time. In the other case, the handbook provision stated that “no representative of the company has authority to enter into any agreement contrary to the …employment at will relationship.” The Acting General Counsel found the two provisions to be lawful because neither requires the employees to refrain from seeking to change the at-will status. Rather, the provisions simply prohibit employer representatives from entering into agreements to change at-will status.
At some point the Board itself may well weigh in on this issue, and we will find out whether the Acting General Counsel’s view or the more doctrinaire ALJ rationale will prevail. Until then, employers can at least continue to include clauses in employee handbooks limiting who has the authority to change employees’ at-will status as long as employers do not represent that the at-will status can never be changed.
Non-unionized employers rarely deal with unions or the Board. Therefore, it is not surprising that many are often entirely unaware that the Board considers seemingly reasonable personnel policies to be unlawful. Please review your work rules and policies – especially those dealing with confidential information or employee communications -- and let us know if you have any questions about whether your policies are at risk of being found unlawful. If you do have questions, please contact Charlie Einsiedler or any member of the Employment Practice Group.