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Camera Ban and Confidentiality Rule Are Unlawfully Overbroad: NLRB
Practical Law Legal Update 7-618-5428 (Approx. 8 pages)
Camera Ban and Confidentiality Rule Are Unlawfully Overbroad: NLRB
by Practical Law Labor & Employment
| Law stated as of 16 Dec 2019 • USA (National/Federal) |
In Caesars Entertainment, the National Labor Relations Board (NLRB) held that a casino's confidentiality rule and its rule banning employees from using cameras, camera phones and other audio and video recording equipment on the employer's property without permission were unlawfully overbroad and violated Section 8(a)(1) of the National Labor Relations Act (NLRA). The Board remanded the case in part to reconsider the validity of computer use rules under Purple Communications.
On August 27, 2015, in Caesars Entertainment, the panel (Board) heading the NLRB's judicial functions held that a casino's confidentiality rule and its rule banning employees from using cameras, camera phones and audio-visual equipment on the employer's property were unlawfully overbroad. The Board found that employees would reasonably construe both rules as prohibiting Section 7 activity. The Board remanded the case in part to reconsider the validity of computer use restrictions under Purple Communications. (362 N.L.R.B. No. 190 (Aug. 27, 2015).)
Background
Caesars, a casino operator in Las Vegas, maintained an employee handbook with the following confidentiality rule:
"All employees are prohibited from disclosing to anyone outside the Company, indirectly or directly, any information about the Company which has not been shared by the Company with the general public. This type of disclosure includes participation in internet chat rooms or message boards. Exceptions to the rule include disclosures which are authorized by the Company or required or authorized by the law. This information includes, but is not limited to: Company financial data; Plans and strategies (development, marketing, business); Organizational charts, salary structures, policy and procedures manuals; Research or analyses; Customer or supplier lists or related information."
Caesars's employee handbook also contained the following workplace rules addressing use of cameras and audio-visual equipment:
"Camera phones may not be used to take photos on property without permission from a Director or above."
"Cameras, any type of audio visual recording equipment and/or recording devices may not be used unless specifically authorized for business purposes (e.g. events)."
Caesars's employee handbook contained the following policies addressing employees' computer use:
"Do not disclose or distribute outside of [the casino] any information that is marked or considered confidential or proprietary unless you have received a signed non-disclosure agreement through the Law Department."
"Computer resources may not be used to: Share confidential information with the general public, including discussing the company, its financial results or prospects, or the performance or value of company stock by using an internet message board to post any message, in whole or in part, or by engaging in an internet or online chatroom; Convey or display anything fraudulent, pornographic, abusive, profane, offensive, libelous or slanderous; Send chain letters or other forms of non-business information; Solicit for personal gain or advancement of personal views; Violate rules or policies of the Company."
Outcome
The majority (Chairman Pearce and Member McFerran):
- Found that employees would reasonably construe the confidentiality rule and both rules about employees' workplace camera use as prohibiting Section 7 protected activity.
- Held that the policies violated Section 8(a)(1) of the NLRA as they were unlawfully overbroad.
Confidentiality Rule
The Board majority found that the confidentiality rule:
- Was extremely broad because it prohibited employees from disclosing any non-public information about Caesars.
- Encompassed protected employment terms and conditions (Flamingo Hilton-Laughlin, 330 N.L.R.B. 287, 291-92 (1999).
- Listed specific types of information Caesars prohibited employees from disclosing that, according to the Board, "go to the very core of protected concerted activity," including:
- salary structures (which the Board viewed as an unlawful ban on disclosing wage-related information); and
- policy and procedures manuals (which the Board viewed as an unlawful ban on disclosing the company's employee Handbook).
- Was not clearly related to Caesars's legitimate business interests, in contrast with rules found lawful by the Board that prohibited disclosures of a company's proprietary business information and intellectual property (Mediaone of Greater Florida, 340 N.L.R.B. 277 (2003)).
Member Johnson dissented, noting that the confidentiality rule should be found lawful because employees would reasonably understand that the rule:
- Prohibited disclosing proprietary information and was comparable to the rule that the Board upheld in Mediaone.
- Did not prohibit them from discussing wages and other employment terms and conditions.
Camera/AV Equipment Use Rules
The Board majority found that the rules prohibiting all use of cameras, camera phones and audio-visual equipment in the workplace without Caesars's authorization were unlawfully broad because:
- Employees have a Section 7 right to photograph and videotape when acting together for their own protection or safety, including to document:
- unsafe or hazardous working conditions;
- discussions about employment terms and conditions; and
- an employer's failure to consistently apply workplace rules.
- The rules were not tied to a legitimate business interest such as maintaining casino guests' privacy. Although Caesars had a rule requiring employees not to share information about guests' gaming habits, the prohibitions in the camera and audio-visual rules were not linked to the guest-related rule, leaving employees to reasonably believe that they were prohibited from using cameras and audio-visual equipment for protected concerted activities.
Member Johnson dissented, noting that the rules should be found lawful because:
- Employees do not have inherent Section 7 rights to possess or use cameras and other recording devices in the workplace.
- Employees would reasonably understand that the rules were intended to protect casino guests' privacy as well as protect guests and the casino itself from illegal gambling activities (Flagstaff Med. Ctr., 357 N.L.R.B. No. 65 (Aug. 26, 2011)).
- There was no need for Caesars to expressly tie the camera and audio-visual prohibitions to its guest privacy role because it would be obvious to employees that the prohibitions were intended to maintain guest privacy.
Computer Usage Rules
The Board majority remanded the case in part, ordering the NLRB administrative law judge (ALJ) to review Caesars's computer use restrictions under the Board's test articulated in Purple Communications, Inc. (361 N.L.R.B. No. 126 (Dec. 11, 2014); see Legal Update, Business-only Email Rules are Presumptively Unlawful, Restrain Employees' New Rights to Use Company Email for Section 7 Activity: NLRB). Member Johnson disagreed with the decision to remand based on his dissent in Purple Communications, noting that the computer usage restrictions should be lawful because employees would not reasonably construe the rules as prohibiting Section 7 activity.
Practical Implications
The Board's decision in Caesars reflects its continued close scrutiny of confidentiality rules and of rules that restrict employees' ability to engage in activities within the workplace that could be used to further protected concerted activities. In light of the Board's decision, employers should expect the NLRB to pan:
- Confidentiality rules that could, in any way, limit Section 7 activity without expressly specifying how the rules protect legitimate business interests, such as protecting customer's privacy or maintaining production or discipline if the policy:
- could be read to impliedly prohibit disclosures of wages and the contents of employee manuals and other information about employment terms and conditions;
- fail to include contextual language referencing trade secrets and intellectual property that can more effectively tie the confidentiality restriction to the employer's legitimate business interests and help insulate the rule from a finding that it is intended to deter protected concerted activity.
- Restrictions on employees' use of cameras, camera phones and other audio-visual recording devices in the workplace, unless the restriction:
- is expressly tied to particularized employer interests such as maintaining privacy for the employer's customers or clients; and
- prohibits picture-taking and recording only in specific, limited situations or circumstances.
Although the NLRB will not find it determinative of policies' lawfulness, employers should consider including qualifying language in employment policies indicating that employees' confidentiality obligations or camera use restrictions are not intended to preclude employees from discussing employment terms and conditions or otherwise exercising their Section 7 rights.
As the dissent noted, the sweeping language in the majority's decision could have the effect of creating affirmative Section 7 rights for employees to photograph and otherwise record information and events on the employer's property. Prior Board decisions on rules limiting employees' use of cameras and other recording equipment affirmed employers' rights to protect business interests without suggesting employees had a Section 7 right to engage in recording activities on the employer's premises during non-working time.
The majority will likely use the decision on partial remand about the employer's computer use restrictions as a springboard for extending the principles of Purple Communications to equipment and media beyond e-mail.
UPDATE:
On December 14, 2017, in Boeing Co., the Board overruled Caesars Entertainment d/b/a Rio All-Suites Hotel & Casino (365 N.L.R.B. No 154 (Dec. 14, 2017); see Legal Update, NLRB Establishes New Standard Governing Workplace Policies and Upholds No-Camera Policy).
UPDATE:
On December 16, 2019, in Caesars Entertainment d/b/a Rio All-Suites Hotel & Casino, the Board overruled Purple Communications, Inc. (368 N.L.R.B. No. 143 (Dec. 16, 2019); see Legal Update, NLRB Restores Employers' Right to Restrict Use of Email).