National_Labor_Relations_Board_logo_-_colorEarlier this year, on March 18, 2015, NLRB General Counsel Richard F. Griffin, Jr. issued a report covering recent cases on employee handbook rules that encroached on employees’ Section 7 rights under the National Labor Relations Act.  Griffin’s report (GC Memo 15-04) stated that the vast majority of handbook violations are due to employers’ failure to comply with the first prong of the Lutheran Heritage test.  The report also provides timely guidance to employers in light of a recent NLRB decision against a fast-food restaurant’s finding Section 7 violations in its employee handbook.

This post will begin by introducing the Lutheran Heritage test and this and following posts will discuss examples of lawful and unlawful handbook rules from Griffin’s report.  Future posts will use the Lutheran Heritage test to examine the violations found in that fast-food restaurant’s employee handbook and how the unlawful rules were revised pursuant to a settlement agreement.  Finally, additional posts will discuss best practices for employers to ensure employees’ Section 7 rights remain protected.

The Lutheran Heritage Test

The Lutheran Heritage test originated from Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), a case that came before the NLRB when an employer’s work rules were challenged on the grounds that they chilled employees’ exercise of Section 7 activity (i.e., “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities”).  The Board held that when an employer’s rule does not explicitly restrict activity protected by Section 7, it will still be deemed unlawful if “(1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.”  Griffin’s report focuses on the first prong of this test.

Rules Regarding Confidentiality

Employers have an interest in protecting confidential company information.  However, employers must be careful not to create an overbroad restriction against sharing company information that may lead employees to reasonably believe that their Section 7 activity is being prohibited.  An employer’s policy that “either specifically prohibits employee discussions of terms and conditions of employment – such as wages, hours, or workplace complaints – or that employees would reasonably understand to prohibit such discussions, violates the Act.”  See Flamingo-Hilton Laughlin, 330 NLRB 287, 288 n.3, 291-92 (1999).  Also, a rule that is broad enough to encompass “employee” or “personnel” information without sufficient clarification would be considered unlawful.  For instance, restricting employees from disclosing information about other associates that was “obtained in violation of law or lawful Company policy” is too overbroad because a reasonable employee would not know what constitutes a “lawful Company policy.”

Below are some examples of unlawfully overbroad provisions:

  • Prohibiting employees from “[d]isclosing…details about the [Employer].”
  • Prohibiting the “sharing of [overheard conversations at the work site] with your co-workers, the public, or anyone outside of your immediate work group.”
  • Requiring that employees “discuss work matters only with other employees who have a specific business reason to know or have access to such information….” and “not discuss work matters in public places.”
  • Instructing employees that “if something is not public information, you must not share it.”

In contrast, the following provisions were found to be facially lawful because the definition of “confidential information” was not overbroad, there was no language to otherwise restrict Section 7 communications, and there was no reference to employee terms and conditions of employment:

  • No unauthorized disclosure of “business ‘secrets’ or other confidential information.”
  • “Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [Employer] is cause for disciplinary action, including termination.”
  • “Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding business partners, vendors or customers.”

Clearly, employer rules involving confidentiality require careful attention to detail as the NLRB’s decisions on these cases are often very fact-specific.  Savvy employers will be sure to vet their confidentiality requirements with legal counsel to make sure they do not run afoul of the NLRB’s cases described in Griffin’s report.

Our next post on the report will cover rules regarding:  (i) employee conduct towards the Company and supervisors, (ii) employee conduct towards fellow employees, and (iii) employee interaction with third-parties.