NLRB General Counsel Red Flags Common Terms in Employment Rules

Practical Law Legal Update 2-605-1365 (Approx. 26 pages)

NLRB General Counsel Red Flags Common Terms in Employment Rules

by Practical Law Labor & Employment

The General Counsel's Analysis of Employment Rules

The General Counsel preliminarily noted that the NLRB most often scrutinizes employment rules by applying the Lutheran Heritage Village-Livonia test set by the panel (Board) heading the NLRB's judicial functions (343 N.L.R.B. 646 (2004)). The General Counsel's Office most often issues complaints, and the Board most often finds violations about employment rules under the first prong of this test:

Whether employees would reasonably construe an employment rule's language to prohibit Section 7 activity.
Whether the employer promulgated the employment rule in response to union or other Section 7 activity.
Whether the employer actually applied the employment rule to restrict employees' exercise of Section 7 rights.

(343 N.L.R.B. 646.)

Confidentiality Rules

The General Counsel noted that:

Employees have a Section 7 right to discuss wages, hours, and other employment terms and conditions with:
- fellow employees; and
- non-employees, including union representatives.
Confidentiality policies are unlawful if either:
- they specifically prohibit employees from discussing employment terms and conditions, including wages, hours, or workplace complaints;
- employees would reasonably understand them as prohibiting employees from discussing employment terms and conditions, including wages, hours, or workplace complaints; or
- they broadly encompass "employee" or "personnel" information, without clarification or limitation(Flamingo-Hilton Laughlin, 330 N.L.R.B. 287, 288 n.3, 291-92 (1999)).

Unlawful Confidentiality Rules

"Do not discuss 'customer or employee information' outside of work, including 'phone numbers [and] addresses.'"

This rule was unlawful because it:

Restricted disclosure of employee information.
Contained a blanket ban on discussing employee information, without regard to how the information was obtained.

"You must not disclose proprietary or confidential information about [the Employer, or] other associates (if the proprietary or confidential information relating to [the Employer's] associates was obtained in violation of law or lawful Company policy)."

This rule was unlawful because reasonable employees would not understand how the employer determines what is a "lawful Company policy."

"Never publish or disclose [the Employer's] or another's confidential or other proprietary information. Never publish or report on conversations that are meant to be private or internal to [the Employer]."

This rule was unlawful because employees would reasonably interpret "another's" information as prohibiting discussions about other employees' wages and other employment terms or conditions.

"[Employees are prohibited from] "disclosing details about [the Employer]."

"Sharing of [overheard conversations at the worksite] with your coworkers, the public, or anyone outside of your immediate work group is strictly prohibited."

"Discuss work matters only with other [Employer] employees who have a specific business reason to know or have access to such information... Do not discuss work matters in public places."

Even though the rules above did not expressly reference employment terms and conditions, these rules were unlawful because they:

Contained broad restrictions.
Did not expressly disclaim that the rules were not intended to restrict Section 7 communications.

"If something is not public information, you must not share it."

The General Counsel found this rule unlawful for the same reasons as the other three rules above and because employees would reasonably understand the ban on sharing non-public information as including employee wages, benefits and other employment terms and conditions.

"Confidential Information is: 'All information in which its [sic] loss, undue use or unauthorized disclosure could adversely affect the [Employer's] interests, image and reputation or compromise personal and private information of its members.'"

This rule was unlawful because it:

Violated employees' Section 7 right to share information in support of making complaints about their wages and working conditions.
Would reasonably lead employees to believe that they are prohibited from disclosing information in support of making complaints about their wages and working conditions.

Lawful Confidentiality Rules

"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."

These rules were lawful because they do not:

Reference information about employment terms and conditions.
Define the term "confidential" in an overbroad manner.
Contain language that would reasonably be construed as prohibiting Section 7 communications.

"Prohibition on disclosure of all 'information acquired in the course of one's work.'"

This rule was lawful because of its context. The rule:

Was included with a series of other rules addressing conflicts of interest and compliance with laws and SEC regulations.
Was near rules unrelated to Section 7 activity so employees would reasonably understand the rule not to address Section 7 activity, but rather the employer's customer and trade secret information.

Conduct Toward the Employer and Supervisors Rules

Unlawful Conduct Toward the Employer and Supervisors Rules

The General Counsel noted that:

Employees have the Section 7 right to criticize or protest their employer's labor policies or treatment of employees.
Employee conduct rules that employees could reasonably read to prohibit protected concerted criticism of the employer are unlawfully overbroad. For example, a rule is unlawful if it does not supply clarification or context while prohibiting employee conduct towards the employer or management that is:
- disrespectful;
- negative;
- inappropriate; or
- rude.
(Lytton Rancheria of Cal., 361 N.L.R.B. slip op. 148, at 3, (Dec. 16, 2014).)
Employer rules that ban false statements are unlawfully overbroad because Section 7 employee criticism of an employer remains protected unless it is maliciously false (Lytton Racheria of Cal., 361 N.L.R.B. slip op at 4).
Employers have legitimate business interests in having and may require employees to act respectfully or professionally to, co-workers, clients, business partners and other third parties, but not to the employer or management.
Employers may prohibit insubordinate conduct (Copper River of Boiling Springs, LLC, 360 N.L.R.B. slip op. 60, (Feb. 28, 2014)).

"Be respectful to the company, other employees, customers, partners and competitors."

"Do not make fun of, denigrate, or defame your co-workers, customers, franchisees, suppliers, the Company, or our competitors."

"Be respectful of others and the Company."

"No '[d]efamatory, libelous, slanderous or discriminatory comments about [the Company], its customers and/or competitors, its employees or management.'"

These rules were unlawfully overbroad because employees would reasonably construe them as banning protected criticism and protests regarding supervisors, management and employers in general.

"Disrespectful conduct or insubordination, including but not limited to refusing to follow orders from a supervisor or a designated representative."

"Chronic resistance to proper work-related orders or discipline, even though not overt insubordination, will result in discipline."

These rules were unlawful because:

They banned conduct that did not rise to the level of insubordination.
Employees would reasonably understand them as encompassing protected concerted activity.

"Refrain from any action that would harm persons or property or cause damage to the Company's business or reputation."

"It is important that employees practice caution and discretion when posting [content on social media] that could affect [the Employer's] business operations or reputation."

"Do not make statements that damage the company or the company's reputation or that disrupt or damage the company's business relationships."

"Never engage in behavior that would undermine the reputation of [the Employer], your peers or yourself."

These rules were unlawful because:

They violate employees' rights to criticize their employer in a public forum (Quicken Loans, Inc., 361 N.L.R.B. slip op. 94, (Nov. 3, 2014)).
Employees would reasonably read them as requiring them to refrain from publicly criticizing their employer.
They contained insufficient context or examples to indicate that they:
- were intended solely to prohibit unprotected criticism, such as criticism of the employer's product; and
- were not intended to prohibit criticizing the employer's labor policies and working conditions.

Lawful Conduct Toward the Employer and Supervisors Rules

"No rudeness or unprofessional behavior toward a customer, or anyone in contact with the company."

"Employees will not be discourteous or disrespectful to a customer or any member of the public while in the course and scope of company business."

These rules were lawful because they addressed only customers and competitors, not management. Therefore, employees would not reasonably believe that these rules prohibited Section 7 activity.

"Each employee is expected to work in a cooperative manner with management/supervision, coworkers, customers and vendors."

The General Counsel found this rule lawful because:

It required employees to cooperate in performing work in an atmosphere of civility (Copper River of Boiling Springs, LLC, 360 N.L.R.B. slip op. 60, ).
Employees would reasonably understand the rule as regulating workplace civility, not as prohibiting Section 7 activity.

"Each employee is expected to abide by Company policies and to cooperate fully in any investigation that the Company may undertake."

This rule was lawful because, when read in context with other rules, employees would reasonably interpret it as:

Applying to employer investigations of workplace conduct.
Not applying to employer investigations of ULPs or to prepare for labor-related arbitrations.

"Being insubordinate, threatening, intimidating, disrespectful or assaulting a manager/supervisor, coworker, customer or vendor will result in discipline."

This rule was lawful because:

In context, it was intended to only curb serious workplace misconduct (Tradesman Int'l, 338 N.L.R.B. 460 (2002)).
Although a ban on being "disrespectful" to management, by itself, would ordinarily be unlawful for chilling Section 7 criticism of the employer, the employer included the term in a larger provision that clearly focused on serious misconduct, like insubordination, threats, and assault.

Conduct Toward Fellow Employees Rules

Unlawful Conduct Toward Fellow Employees Rules

The General Counsel noted that:

Employees have a right under the NLRA to argue and debate with each other about:
- the union;
- management; and
- their employment terms and conditions.
Employees' Section 7 discussions do not lose their protection even if they include "intemperate, abusive and inaccurate statements" (Linn v. United Plant Guards, 383 U.S. 53 (1966)).
Employers must clarify what they mean when they ban "negative" or "inappropriate" employee discussions or else employees reasonably will read those rules to prohibit Section 7-protected discussions and interactions (Three D, LLC, 361 N.L.R.B. slip op. 31, slip op. at 7, (Aug. 22, 2014); Hills & Dales Gen. Hosp., 360 N.L.R.B. slip op. 70, (Apr. 1, 2014)).
Employers' anti-harassment rules cannot be so broad that employees would reasonably read them as prohibiting vigorous debate or intemperate comments on Section 7-protected subjects.

"Don't pick fights online."

This rule was unlawful because:

It was overbroad and ambiguous.
Employees would reasonably construe it as prohibiting employee discussions about protected topics, including:
- unionizing;
- the employer's labor policies; and
- the employer's treatment of employees.

"Do not make insulting, embarrassing, hurtful or abusive comments about other company employees online, and avoid the use of offensive, derogatory or prejudicial comments."

This rule was unlawful because employees would reasonably understand it as limiting employees' ability to:

Honestly discuss controversial topics like unionization.
Criticize supervisors and managers, who are company employees.

"Show proper consideration for others' privacy and for topics that may be considered objectionable or inflammatory, such as politics and religion."

"Do not send unwanted offensive or inappropriate e-mails."

These rules were unlawful because:

They are unlawfully vague and overbroad.
They lack sufficient context to clarify that they were not intended to prohibit Section 7 communications.
They reference discussing "politics" which employees could construe as prohibiting discussions on protected topics such as right-to-work legislation.
Unionization discussions can be viewed as:
- objectionable or inflammatory; or
- unwanted, offensive or inappropriate.

"Material that is fraudulent, harassing, embarrassing, sexually explicit, profane, obscene, intimidating, defamatory, or otherwise unlawful or inappropriate may not be sent by e-mail."

This rule was unlawful because:

The terms "embarrassing," "defamatory" and "otherwise . . . inappropriate" are ambiguous as to whether they restrict Section 7 activity.
Viewed in context, employees would reasonably view "intimidating" as applying to Section 7 activity.

Lawful Conduct towards Fellow Employees Rules

"Making inappropriate gestures, including visual staring."

"Any logos or graphics worn by employees must not reflect any form of violent, discriminatory, abusive, offensive, demeaning, or otherwise unprofessional message."

"Threatening, intimidating, coercing, or otherwise interfering with the job performance of fellow employees or visitors."

"No harassment of employees, patients, or facility visitors."

These rules were lawful because they:

Were intended to root out unprofessional workplace-related conduct or conduct disrespectful to customers and competitors.
Did not reference management or the employer and were not intended to prohibit Section 7-protected criticism.

"No use of racial slurs, derogatory comments or insults."

This rule was lawful because employees would reasonably read this rule as prohibiting unprotected comments toward fellow employees and not protected criticism directed at the employer because the rule was contained in a harassment and discrimination section of an employee handbook. However, in isolation, this blanket ban would be unlawful because employees would reasonably read it as restricting protected criticism of the employer.

Communications with Third Parties Rules

The General Counsel noted that:

Employment rules may be unlawfully overbroad if they restrict employees' communications about wages, benefits, and other employment terms and conditions with:
- news media;
- government agencies; or
- other third parties.
(Trump Marina Assocs., 354 N.L.R.B. 1027, 1027 n.2 (2009), incorporated by reference, 355 N.L.R.B. 585 (2010), enforced mem., 435 F. App'x 1 (D.C. Cir. 2011).)
Employers may lawfully control who makes official statements for them, but must ensure that employees would not reasonably read their rules to ban employees from speaking to the media or other third parties for themselves or other employees.

Unlawful Communications with Third Parties Rules

"Employees are not authorized to speak to any representative of the print and/or electronic media about company matters unless designated to do so by HR, and must refer all media inquiries to the company media hotline."

This rule was unlawful because:

Employees would reasonably construe the phrase "company matters" to include labor relations issues.
The rule lacked limiting language or other context clarifying that it applied only to an employee speaking as an official company representative.

"Associates are not authorized to answer questions from the news media . . . When approached for information, you should refer the person to [the Employer's] Media Relations Department."

"All inquiries from the media must be referred to the Director of Operations in the corporate office, no exceptions."

These rules were unlawfully overbroad because:

Employees would reasonably construe them as prohibiting all contact with the media, not just in response to inquiries seeking the employers' official positions on a particular topic.
Employees would reasonably construe them as limiting protected communications with government agencies.

"If you are contacted by any government agency, you should contact the Law Department immediately for assistance."

This rule was unlawfully overbroad because employees would reasonably construe it as prohibiting them from:

Speaking with government agencies without management approval.
Providing information in response to an NLRB investigation.
Went beyond preserving the employer's right to present its own position about a subject of government inquiry.

Lawful Communications with Third Parties Rules

The General Counsel acknowledged that employers may construct rules precluding employees from speaking on behalf of the employer without authorization if employees reasonably could only read the rule narrowly.

"The company strives to anticipate and manage crisis situations in order to reduce disruption to our employees and to maintain our reputation as a high quality company. To best serve these objectives, the company will respond to the news media in a timely and professional manner only through the designated spokespersons."

This rule was lawful because it:

Addressed non-Section 7 related matters such as crisis situations.
Sought to ensure consistent employer messaging and responses on non-Section 7-related matters.
Was not a blanket prohibition on all employee contact with the media.
Employees would not reasonably interpret the rule as interfering with Section 7 communications.

"Events may occur at our stores that will draw immediate attention from the news media. It is imperative that one person speaks for the Company to deliver an appropriate message and to avoid giving misinformation in any media inquiry. While reporters frequently shop as customers and may ask questions about a matter, good reporters identify themselves prior to asking questions. Every employee is expected to adhere to the following media policy: Answer all media/reporter questions like this: "I am not authorized to comment for [the Employer] (or I don't have the information you want). Let me have our public affairs office contact you."

This rule was lawful because:

Employees would reasonably construe it as the employer's attempt to control its own message, and not to restrict Section 7 communications or conversations with the news media about protected concerted activities.
The suggested responses to media inquiries would not make sense if the prefatory language covered inquiries about employment terms and conditions.

Use of Employer Logos, Copyrights and Trademarks Rules

Unlawful Use of Employer Logos, Copyrights and Trademarks Rules

The General Counsel noted that:

Employers may ordinarily prevent others from using their intellectual property including trademarks for commercial use.
Employee handbook rules cannot prohibit employees' fair protected use of that intellectual property, including, for example, by barring employees from using company names, logos or other marks because that would to identify an employer in Section 7-related protests (Pepsi-Cola Bottling Co., 301 N.L.R.B. 1008, 1019-20 (1991), enforced mem., 953 F.2d 638 (4th Cir. 1992)).

"Do not use any Company logos, trademarks, graphics, or advertising materials in social media."

"Do not use other people's property, such as trademarks, without permission in social media."

"Use of [the Employer's] name, address, or other information in your personal profile [is banned] . . . In addition, it is prohibited to use [the Employer's] logos, trademarks or any other copyrighted material."

"Company logos and trademarks may not be used without written consent."

These rules were unlawful because they contained broad restrictions that employees would reasonably construe as prohibiting fair use of the employer's intellectual property while engaged in protected concerted activity.

Lawful Use of Employer Logos, Copyrights and Trademarks

"Respect all copyright and other intellectual property laws. For [the Employer's] protection as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks, and other intellectual property, including [the Employer's] own copyrights, trademarks and brands."

"Do respect the laws regarding copyrights, trademarks, rights of publicity and other third-party rights. To minimize the risk of a copyright violation, you should provide references to the source(s) of the information you use and accurately cite copyrighted works you identify in online communications. Do not infringe on [the Employer's] logos, brand names, taglines, slogans, or other trademarks."

These rules were lawful because they:

Did not broadly ban employee use of trademarked or copyrighted material.
Required employees to respect the copyright laws.
Permitted fair use for Section 7 activity.

Photography, Recordings and Personal Electronic Device Rules

Unlawful Photography, Recordings and Personal Electronic Device Rules

The General Counsel noted that:

Employees have a Section 7 right to photograph and make recordings to further their protected concerted activity, including the right to use personal devices to take such pictures and recordings (Hawaii Tribune-Herald, 356 N.L.R.B. slip op 63, at 1, (Feb. 14, 2011), enforced Stephens Media, LLC v. NLRB, 677 F.3d 1241 (D.C. Cir. 2012); and White Oak Manor, 353 N.L.R.B. 795, 795 (2009), incorporated by reference, 355 N.L.R.B. 1280 (2010), enforced mem., 452 F. App'x 374 (4th Cir. 2011).
Rules that expressly ban or that employees would reasonably read as prohibiting them from taking the following activities during non-working time are unlawful:
- taking pictures;
- taking recordings;
- using personal cameras or recording devices; or
- possessing personal cameras or recording devices.

"Taking unauthorized pictures or video on company property is prohibited."

This rule was unlawful because:

Employees would reasonably interpret it as barring use of personal equipment for Section 7 activity.
In particular, employees would reasonably read it as prohibiting any unauthorized use of cameras and video recorders by employees, including for documenting health and safety violations.

"No employee shall use any recording device including but not limited to audio, video, or digital for the purposes of recording any Company employee or company operation."

This rule was unlawful because:

Employees would reasonably interpret it as barring use of personal equipment for Section 7 activity.
In particular, employees would reasonably construe it as prohibiting them from documenting ULPs, an essential part of exercising rights to use the NLRB's processes.

"A total ban on use or possession of personal electronic equipment on Employer property."

"A prohibition on personal computers or data storage devices on employer property."

These rules were unlawful because:

Employees would reasonably interpret them as barring use of personal equipment for Section 7 activity.
The rules were not narrowly tailored to further the employer's legitimate interest in preserving the confidentiality of business records.

"Prohibition from wearing cell phones, making personal calls or viewing or sending texts 'while on duty.'"

This rule was unlawful because employees would reasonably interpret:

The rule as barring use of personal equipment for Section 7 activity.
"[O]n duty" as including break times and meal times. It should have limited the ban to employees' actual "working time," a subset of "on duty" time.

Lawful Photography, Recordings and Personal Electronic Device Rules

The General Counsel noted that:

The NLRB may find rules about employee recording or photography lawful if their scope is limited.
The NLRB might find that an employer lawfully imposed a no-photography rule in response to a breach of patient privacy, where:
- the employer has a well-understood, strong privacy interest; and
- employees would not reasonably understand that rule to limit pictures for protected concerted purposes.

(Flagstaff Med. Ctr., 357 N.L.R.B. slip op. 65, at 5, (Aug. 26, 2011), enforced in relevant part, 715 F.3d 928 (D.C. Cir. 2013).)

"No cameras are to be allowed in the store or parking lot without prior approval from the corporate office."

This rule, which was part of a lawful policy on dealing with reporters in the employer's store, was lawful because employees would reasonably read it as banning news cameras in the store, not employees' cameras.

Leaving Work Rules

Unlawful Leaving Work Rules

The General Counsel noted that:

One of the most fundamental Section 7 rights is the right to strike.
Rules that determine when employees can leave work are unlawful if employees reasonably would read them to forbid protected strike actions and walkouts (Purple Commc'ns, Inc., 361 N.L.R.B. slip op. 43, at 2, (Sept. 24, 2014)).
Rules that do not mention "strikes," "walkouts," "disruptions" or similar phrases are lawful because employees will reasonably understand the rule applies to employees leaving their posts for reasons unrelated to protected concerted activity (see 2 Sisters Food Group, 357 N.L.R.B. slip op. 168, at 2, (Dec. 29, 2011)

"Failure to report to your scheduled shift for more than three consecutive days without prior authorization or walking off the job during a scheduled shift is prohibited."

"Walking off the job is prohibited."

These rules were unlawful because they contain broad restrictions on walking off the job that employees would reasonably read as including protected strikes and walkouts.

Partially Lawful Leaving Work Rules

"Entering or leaving Company property without permission may result in discharge."

This rule was partially lawful. In particular, the rule was:

Lawful to the extent that it did not contain terms like "work stoppage or "walking off the job," which employees could reasonably read as prohibiting protected strikes.
Unlawful to the extent that it required employees to obtain the employer's permission before entering the employer's property. Under Tri-County Medical Center, employers must have narrowly-tailored off-duty access restrictions justified by legitimate business reasons to lawfully deny off-duty employees access to nonworking areas, including:
- parking lots; and
- gates.

(See 222 N.L.R.B. 1089 (1976).)

Lawful Leaving Work Rules

"Walking off shift, failing to report for a scheduled shift and leaving early without supervisor permission are also grounds for immediate termination."

This health care facility rule was lawful in the context of the employer's and employees' responsibilities to ensure continuity in patient care for patients with dementia. The General Counsel noted:

The "walking off shift" prohibition ordinarily would be unlawfully overbroad because employees would reasonably understand to include strikes.
Where employees are directly responsible for patient care, employees would reasonably interpret a broad "no walkout without permission" rule as ensuring that patients are not left without adequate care, not as a complete ban on strikes (Wilshire at Lakewood, 343 N.L.R.B. 141, 144 (2004), vacated in part, 345 N.L.R.B. 1050 (2005), enforcement denied on other grounds, Jochims v. NLRB, 480 F.3d 1161 (D.C. Cir. 2007)).

Conflict of Interest Rules

The General Counsel noted that:

Section 7 of the Act protects employees' right to engage in concerted activity to improve their terms and conditions of employment, even if that activity is in conflict with the employer's business interests. For example, the NLRA protects employees who on nonworking time:
- protest in front of the company;
- organize a boycott; and
- solicit support for a union.
(See HTH Corp., 356 N.L.R.B. slip op. 182, slip op. at 2, 25, (June 14, 2011), enforced, 693 F.3d 1051 (9th Cir. 2012).)
If employees would reasonably read an employer's conflict of interest rule to prohibit these labor relations protest activities the rule is unlawful.
A conflict of interest rule is lawful if employees would reasonably understand the rule as prohibiting only actions the NLRA does not protect, for example, because it:
- includes examples of business interests and conflicts with them; and
- otherwise clarifies that the rule are limited to legitimate business interests.
(See Tradesmen Int'l, 338 N.L.R.B. at 461-62.)

Unlawful Conflict of Interest Rules

"Employees may not engage in "any action" that is "not in the best interest of [the Employer]."

This rule was unlawful because it:

Was phrased broadly.
Did not include any clarifying examples or context indicating it was not intended to apply to employees' Section 7 activities.

Lawful Conflict of Interest Rules

"Do not 'give, offer or promise, directly or indirectly, anything of value to any representative of an Outside Business,' where 'Outside Business' is defined as 'any person, firm, corporation, or government agency that sells or provides a service to, purchases from, or competes with [the Employer].' Examples of violations include 'holding an ownership or financial interest in an Outside Business' and 'accepting gifts, money, or services from an Outside Business.'"

This rule was lawful because it:

Included examples:
- to provide context about the rule's scope; and
- indicating that it was not intended to cover protected concerted activity.
Employees would reasonably understand that it was directed at:
- protecting against employee graft; and
- preventing employees from engaging in a competing business.
Employees would not reasonably understand the rule as applying to employee interactions with labor organizations or other Section 7 activity.

"As an employee, 'I will not engage in any activity that might create a conflict of interest for me or the company,' where the conflict of interest policy devoted two pages to examples such as 'avoid outside employment with a[n Employer] customer, supplier, or competitor, or having a significant financial interest with one of these entities.'"

This rule was lawful because it included multiple examples of conflicts of interest, none of which suggested the rule was intended to prohibit Section 7 activity.

"Employees must refrain 'from any activity or having any financial interest that is inconsistent with the Company's best interest' and also must refrain from 'activities, investments or associations that compete with the Company, interferes with one's judgment concerning the Company's best interests, or exploits one's position with the Company for personal gains.'"

This rule was lawful because employees would not reasonably read it as prohibiting employees from participating in unions based on context even though the rule's language might otherwise be unlawfully vague if read in isolation. In particular, the General Counsel noted that:

The rule was in a handbook section on business ethics.
The business ethics section required:
- 'honesty, fairness and integrity;'
- compliance with 'all laws, rules and regulations;' and
- providing 'accurate, complete, fair, timely, and understandable' information in SEC filings.

The Wendy's Handbook Rules

The General Counsel also:

Set out rules, policies and provisions in Wendy's Handbook:
- which the NLRB General Counsel's Office in 2014 found unlawfully overbroad under Lutheran Heritage's first factor; and
- on which the NLRB General Counsel's Office would have prosecuted a ULP complaint absent settlement.
Explained why the NLRB General Counsel's Office found those rules, policies and provisions unlawful.
Set out the revised NLRB-approved rules, policies and provisions that Wendy's implemented to settle the pending ULP litigation.

Wendy's Handbook Disclosure Provision

Unlawful Handbook Disclosure Provision

"No part of this handbook may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying recording, or information storage and retrieval system or otherwise, for any purpose without the express written permission of Wendy's International, Inc. The information contained in this handbook is considered proprietary and confidential information of Wendy's and its intended use is strictly limited to Wendy's and its employees. The disclosure of this handbook to unauthorized parties is prohibited. Making an unauthorized disclosure of this handbook is a serious breach of Wendy's standards of conduct and ethics and shall expose the disclosing party to disciplinary action and other liabilities as permitted under law."

The General Counsel noted that:

The Wendy's Handbook included employment terms and conditions.
This provision unlawfully precluded employees from disclosing Wendy's Handbook (including those terms and conditions) with third parties, such as:
- co-workers;
- union representatives; and
- government agencies, including the NLRB.

NLRB-Approved Handbook Disclosure Provision

"This Crew Orientation Handbook. . . is the property of Wendy's International LLC. No part of this handbook may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or information storage and retrieval system or otherwise, for any business/commercial venture without the express written permission of Wendy's International, LLC. The information contained in this handbook is strictly limited to use by Wendy's and its employees. The disclosure of this handbook to competitors is prohibited. Making an unauthorized disclosure of this handbook is a serious breach of Wendy's standards of conduct and ethics and shall expose the disclosing party to disciplinary action and other liabilities as permitted under law."

Wendy's Social Media Handbook Provision

Unlawful Social Media Policy

"Refrain from commenting on the company's business, financial performance, strategies, clients, policies, employees or competitors in any - 21 - social media, without the advance approval of your supervisor, Human Resources and Communications Departments. Anything you say or post may be construed as representing the Company's opinion or point of view (when it does not), or it may reflect negatively on the Company. If you wish to make a complaint or report a complaint or troubling behavior, please follow the complaint procedure in the applicable Company policy (e.g., Speak Out)".

This rule:

Was unlawfully overbroad because it:
- was not limited to lawfully ensuring that employee communications did not misrepresent the employer's official position; and
- prevented employees from speaking about the company's business, policies and employees, and not merely speaking on behalf of Wendy's.
Unlawfully chilled employees' Section 7 rights to make employment-related complaints to persons and entities outside of Wendy's.

"Respect copyrights and similar laws. Do not use any copyrighted or otherwise protected information or property without the owner's written consent."

This rule was unlawful because:

The provision was overbroad in prohibiting "any" employee use of protected or copyrighted information (see Use of Employer Logos, Copyrights and Trademarks Rules).
Employees would reasonably construe it as prohibiting Section 7 communications, for example, referring to Wendy's copyrighted Handbook or using Wendy's trademark and name and another company's trademark when setting out a protected wage comparison.

"[You may not post] photographs taken at Company events or on Company premises without the advance consent of your supervisor, Human Resources and Communications Departments. [You may not post] photographs of Company employees without their advance consent. Do not attribute or disseminate comments or statements purportedly made by employees or others without their explicit permission."

This rule was unlawful because, without examples of unprotected conduct or other clarifying or restricting language, it would tend to chill employees from engaging in Section 7 activities, including:

Posting photos of employees carrying picket signs.
Documenting health or safety concerns.
Making complaints about statements made by Wendy's.

"[You may not u]se the Company's (or any of its affiliated entities) logos, marks or other protected information or property without the Legal Department's express written authorization."

This rule was unlawful because:

Wendy's had no legitimate basis to blanketly prohibit employees' use of its trademarks and logos.
Employees would reasonably construe the rule as restricting uses protected by Section 7.

(See Use of Employer Logos, Copyrights and Trademarks Rules.)

"[You may not e]mail, post, comment or blog anonymously. You may think it is anonymous, but it is most likely traceable to you and the Company."

This rule was unlawfully overbroad because:

Posting might be concerted protected activity.
Employees would view it as requiring them to publicly identify themselves in any postings including protected postings.
Requiring employees to publicly identify themselves in all postings would tend to restrict employees from exercising rights protected by Section 7.

"[You may not m]ake false or misleading representations about your credentials or your work."

This rule was unlawfully overbroad because:

The NLRA may protect employees who make false statements when engaging in concerted activity, as long as the statements are not maliciously false (made with knowledge that they are false or with a reckless disregard for the truth).
This provision:
- prohibits protected false or misleading statements, much more than unprotected maliciously false statements; and
- would tend to chill employees exercise of their Section 7 rights for fear that they might be disciplined under the rule for making protected complaints about working conditions that later are found to be false or misleading.

"[You may not c]reate a blog or online group related to your job without the advance approval of Legal and Communications."

This rule was unlawful because:

Employees have a Section 7 right to discuss their employment terms and conditions with co-workers and third parties.
Pre-authorization requirements for employees discussing those terms and conditions tend to chill Section 7 activity.

"Do Not Disparage: Be thoughtful and respectful in all your communications and dealings with others, including email and social media. Do not harass, threaten, libel, malign, defame, or disparage fellow professionals, employees, clients, competitors or anyone else. Do not make personal insults, use obscenities or engage in any conduct that would be unacceptable in a professional environment."

This rule was unlawful because:

Its second and third sentences contain broad, sweeping prohibitions against "malign[ing], defam[ing], or disparag[ing]" that employees would reasonably read as:
- prohibiting more than unprotected defamation (maliciously false statements); and
- including concerted communications protesting or criticizing Wendy's treatment of employees, among other Section 7 activities.
The rule or the Handbook as a whole did not contain any language to reassure employees that this rule did not prohibit Section 7 communications.

"Do Not Retaliate: If you discover negative statements, emails or posts about you or the Company, do not respond. First seek help from the Legal and Communications Departments, who will guide any response."

This rule was unlawfully overbroad because:

Section 7 activity may include making negative statements about the employer's labor practices.
Employees would reasonably construe prohibitions against "negative statements . . . about the Company" as including Section 7 activity.
Employees would reasonably construe the rule as requiring them to get permission before engaging in Section 7 activity, which tends to chill employees' Section 7 activity.

NLRB-Approved Social Media Provision

• Do not comment on trade secrets and proprietary Company information (business, financial and marketing strategies) without the advance approval of your supervisor, Human Resources and Communications Departments.

• Do not make negative comments about our customers in any social media.

• Use of social media on Company equipment during working time is permitted, if your use is for legitimate, preapproved Company business. Please discuss the nature of your anticipated business use and the content of your message with your supervisor and Human Resources. Obtain their approval prior to such use.

• Respect copyright, trademark and similar laws and use such protected information in compliance with applicable legal standards.

Restrictions:

YOU MAY NOT do any of the following:

• Due to the potential for issues such as invasion of privacy (employee and customer), sexual or other harassment (as defined by our harassment /discrimination policy), protection of proprietary recipes and preparation techniques, Crew Members may not take, distribute, or post pictures, videos, or audio recordings while on working time. Crew Members also may not take pictures or make recordings of work areas. An exception to the rule concerning pictures and recordings of work areas would be to engage in activity protected by the National Labor Relations Act including, for example, taking pictures of health, safety and/or working condition concerns or of strike, protest and work-related issues and/or other protected concerted activities.

• Use the Company's (or any of its affiliated entities) logos, marks or other protected information or property for any business/commercial venture without the Legal Department's express written authorization.

• Make knowingly false representations about your credentials or your work.

• Create a blog or online group related to Wendy's (not including blogs or discussions involving wages, benefits, or other terms and conditions of employment, or protected concerted activity) without the advance approval of the Legal and Communications Departments. If a blog or online group is approved, it must contain a disclaimer approved by the Legal Department.

- Do Not Violate the Law and Related Company Policies:

Be thoughtful in all your communications and dealings with others, including email and social media. Never harass (as defined by our antiharassment policy), threaten, libel or defame fellow professionals, employees, clients, competitors or anyone else. In general, it is always wise to remember that what you say in social media can often be seen by anyone. Accordingly, harassing comments, obscenities or similar conduct that would violate Company policies is discouraged in general and is never allowed while using Wendy's equipment or during your working time.

Discipline: All employees are expected to know and follow this policy. Nothing in this policy is, however, intended to prevent employees from engaging in concerted activity protected by law. If you have any questions regarding this policy, please ask your supervisor and Human Resources before acting. Any violations of this policy are grounds for disciplinary action, up to and including immediate termination of employment.

Wendy's Conflict-of-Interest Handbook Provision

Conflict-of-Interest Provision

"Because you are now working in one of Wendy's restaurants, it is important to realize that you have an up close and personal look at our business every day. With this in mind, you should recognize your responsibility to avoid any conflict between your personal interests and those of the Company. A conflict of interest occurs when our personal interests interfere—or appear to interfere—with our ability to make sound business decisions on behalf of Wendy's."

This rule was unlawful because:

Employees would reasonably construe the phrase "any conflict between your personal interests and those of the Company" as including Section 7 activity like union organizing and demanding higher wages.
The rule did not include language that:
- confined its scope to legitimate business concerns; and
- clarified that it was not intended to limit Section 7 activity.
When read with the below separate Handbook provision on third-party representation suggesting that unions would not benefit Wendy's or its employees, employees would reasonably construe this clause as prohibiting union support as against company interests:

"[b]ecause Wendy's desires to maintain open and direct communications with all of our employees, we do not believe that third party/union involvement in our relationship would benefit our employees or Wendy's."

NLRB-Approved Conflict-of-Interest Provision

"Because you are now working in one of Wendy's restaurants, it is important to realize that you have an up close and personal look at our business every day. With this in mind, you should recognize your responsibility to avoid any conflict between your personal interests and those of the Company. A conflict of interest occurs when our personal interests interfere — or appear to interfere — with your ability to make sound business decisions on behalf of Wendy's. There are some common relationships or circumstances that can create, or give the appearance of, a conflict of interest. The situations generally involve gifts and business or financial dealings or investments. Gifts, favors, tickets, entertainment and other such inducements may be attempts to "purchase" favorable treatment. Accepting such inducements could raise doubts about an employee's ability to make independent business judgments and the Company's commitment to treating people fairly. In addition, a conflict of interest exists when employees have a financial or ownership interest in a business or financial venture that may be at variance with the interests of Wendy's. Likewise, when an employee engages in business transactions that benefit family members, it may give an appearance of impropriety."

Wendy's Employer Confidential Information Handbook Provision

Unlawful Employer Confidential Information Provision

"During the course of your employment, you may become aware of confidential information about Wendy's business. You must not disclose any confidential information relating to Wendy's business to anyone outside of the Company. Your employee PIN and other personal information should be kept confidential. Please don't share this information with any other employee."

This rule was unlawful because:

Employees have a Section 7 right to discuss with co-workers and third parties their:
- wages;
- hours; and
- other employment terms and conditions.
Employees would reasonably read "personal information" as prohibiting Section 7-protected discussions of those terms.

NLRB-approved Employer Confidential Information Provision

"During the course of your employment, you may become aware of trade secrets and similarly protected proprietary and confidential information about Wendy's business (e.g. recipes, preparation techniques, marketing plans and strategies, financial records). You must not disclose any such information to anyone outside of the Company. Your employee PIN and other similar personal identification information should be kept confidential. Please don't share this information with any other employee."

Wendy's Employee Conduct Handbook Provisions

Unlawful Employee Conduct Provisions

The Wendy's Handbook included a two-page section listing various examples of misconduct and gross misconduct. The General Counsel highlighted noted these items as unlawful.

"Soliciting, collecting funds, distributing literature on Company premises without proper approvals or outside the guidelines established in the 'No Solicitation/No Distribution' Policy."

This rule was unlawfully overbroad because:

Under the NLRA, employees may:
- solicit during non-working time; and
- distribute literature in non-work areas (during non-working time).
This rule contains a blanket prohibition of solicitation and distribution on the employer's premises.

"Walking off the job without authorization."

This rule was unlawfully overbroad because employees would reasonably construe it as prohibiting activity protected under Section 7 such as concerted walkouts and other strike activity (see Leaving Work Rules).

"Threatening, intimidating, foul or inappropriate language."

This rule was unlawful because employees would reasonably construe "inappropriate language" as prohibiting protected communications, including:

criticizing management;
labor policies; or
working conditions.

"False accusations against the Company and/or against another employee or customer."

This rule was unlawfully overbroad because:

The NLRA may protect false accusations in the course of concerted activity if they are not maliciously false.
The rule would tend to chill protected accusations that might later be determined to be false.

NLRB-Approved Employee Conduct Provisions

• Soliciting, collecting funds, distributing literature on Company premises outside the guidelines established in the "No Solicitation/No Distribution" Policy.

• Leaving Company premises during working shift without permission of management.

• Threatening, harassing (as defined by our harassment/discrimination policy), intimidating, profane, obscene or similar inappropriate language in violation of Company policy.

• Making knowingly false accusations against the Company and/or against another employee, customer or vendor.

Wendy's No Distribution and No Solicitation Handbook Provision

Unlawful No Distribution and No Solicitation Provision

"[I]t is our policy to prohibit the distribution of literature in work areas and to prohibit solicitation during employees' working time. "Working time" is the time an employee is engaged, or should be engaged, in performing his/her work tasks for Wendy's. These guidelines also apply to solicitation and/or distribution by electronic means."

This rule was unlawful because:

An employer's legitimate justifications for prohibiting distribution of paper literature in working areas (preventing litter and related production hazards) do not extend to prohibiting electronic literature distribution, for example, by e-mail during non-working time.
Only working time restrictions on electronic distribution of literature are generally permitted.

NLRB-Approved No Distribution and No Solicitation Provision

"Providing the most ideal work environment possible is very important to Wendy's. We hope you feel very comfortable and at ease when you're here at work. Therefore, to protect you and our customers from unnecessary interruptions and annoyances, it is our policy to prohibit the distribution of literature in work areas and to prohibit solicitation and distribution of literature during employees' working time. "Working Time" is the time an employee is engaged or should be engaged in performing his/her work tasks for Wendy's. These guidelines also apply to solicitation by electronic means. Solicitation or distribution of any kind by non-employees on Company premises is prohibited at all times. Nothing in this section prohibits employees from discussing terms and conditions of employment."

Wendy's Telephone, Cell Phone, Camera Phone and Recording Devices Handbook Provision

Unlawful Telephone, Cell Phone, Camera Phone and Recording Devices Provision

"Due to the potential for issues such as invasion of privacy, sexual harassment, and loss of productivity, no Crew Member may operate a camera phone on Company property or while performing work for the Company. The use of tape recorders, Dictaphones, or other types of voice recording devices anywhere on Company property, including to record conversations or activities of other employees or management, or while performing work for the Company, is also strictly prohibited, unless the device was provided to you by the Company and is used solely for legitimate business purposes."

This rule was unlawful because:

A blanket prohibition on employees using a camera or video recorder "on Company property" at any time impinged on employees' Section 7 activity rights to, among other things, document health and safety violations.
Wendy's concerns about privacy, sexual harassment and loss of productivity did not justify a rule banning all use of a camera phone or recording device, at any time on the employer's property.

NLRB-Approved Telephone, Cell Phone, Camera Phone and Recording Devices Provision

"Due to the potential for issues such as invasion of privacy (employee and customer), sexual or other harassment (as defined by our harassment /discrimination policy), protection of proprietary recipes and preparation techniques, Crew Members may not take, distribute, or post pictures, videos, or audio recordings while on working time. Crew Members also may not take pictures or make recordings of work areas. An exception to the rule concerning pictures and recordings of work areas would be to engage in activity protected by the National Labor Relations Act including, for example, taking pictures of health, safety and/or working condition concerns or of strike, protest and work-related issues and/or other protected concerted activities."

Update

NLRB Gen. Counsel Mem. 15-04 was rescinded by recently appointed NLRB General Counsel Peter Robb on December 1, 2017 (NLRB Gen. Counsel Mem. 18-02, Mandatory Submissions to Advice, (Dec. 1, 2017)). Although it was rescinded, the memorandum may remain useful because it:

Collects relevant NLRB precedent on employment policies.
Provides examples of policy language that passed the high level of scrutiny applied by the NLRB under its former General Counsel.

NLRB General Counsel Red Flags Common Terms in Employment Rules | Practical Law