Freedom of Association Provision Does Not Save Overbroad Access Restrictions or Handbook Rules: NLRB | Practical Law

Freedom of Association Provision Does Not Save Overbroad Access Restrictions or Handbook Rules: NLRB | Practical Law

In First Transit, Inc., the National Labor Relations Board (NLRB) held that an employer violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by interfering with its off-duty employees' organizing efforts on the employer's premises and promulgating several unlawfully overbroad employee handbook provisions. The NLRB found that the handbook's "freedom of association" clause failed to save the overbroad provisions, especially since the employer's separate unfair labor practices (ULPs) undermined promises that it made in that clause.

Freedom of Association Provision Does Not Save Overbroad Access Restrictions or Handbook Rules: NLRB

by Practical Law Labor & Employment
Published on 08 Apr 2014 • USA (National/Federal)
In First Transit, Inc., the National Labor Relations Board (NLRB) held that an employer violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by interfering with its off-duty employees' organizing efforts on the employer's premises and promulgating several unlawfully overbroad employee handbook provisions. The NLRB found that the handbook's "freedom of association" clause failed to save the overbroad provisions, especially since the employer's separate unfair labor practices (ULPs) undermined promises that it made in that clause.
On April 2, 2014, in First Transit, Inc., the panel (Board) heading the NLRB's judicial functions held that an employer violated Section 8(a)(1) of the NLRA when it prohibited its off-duty employees from meeting with union representatives at its facility when they were lawfully on the premises. The Board also struck down several provisions in the employer's handbook as unlawfully overbroad and infringing on employees' Section 7 rights under the NLRA. The Board held that the inclusion of a freedom of association clause, as a savings clause informing employees that none of the handbook rules should be interpreted to suggest that the employer will interfere or retaliate against employees for engaging in protected organizing activity, was ineffective in insulating the employer from unfair labor practice (ULP) liability. (360 N.L.R.B. slip op. 72, (Apr. 2, 2014).)

Background

In February 2010, the union that represented the employer's bus drivers, fuelers and cleaners sought to organize the bus mechanics at the employer's Phoenix facility. The employer orally prohibited the mechanics from meeting with union representatives anywhere at the facility at any time, and then terminated a meeting on the premises between off-duty mechanics and three union representatives, one of which was an employee.
The NLRB's General Counsel issued a ULP complaint alleging that the employer infringed on employee's Section 7 rights in violation of Section 8(a)(1) of the NLRA by:
  • Promulgating and enforcing an unlawful access restriction.
  • Maintaining several unlawful rules in its employee handbook.
The provisions at issue include:
  • Disloyalty rule. Employees are prohibited from:
    • making false, vicious or malicious statements concerning the Company or its services, a client or another employee;
    • participation in outside activities that are detrimental to the company's image or reputation, or where a conflict of interest exists; and
    • conducting oneself during non-working hours in such a manner that the conduct would be detrimental to the interest or reputation of the Company.
  • Stealing/theft rule. Employees are prohibited from:
    • conducting activities not related to work during working time; and
    • using company property for activities not related to work anytime.
  • Employee performance rule. Employees are prohibited from poor work habits including:
    • loafing;
    • wasting time;
    • loitering; and
    • excessive visiting.
  • Personal conduct rule. Employees are prohibited from:
    • discourteous or inappropriate attitudes or behaviors to passengers, other employees or members of the public;
    • disorderly conduct during working hours; and
    • profane or abusive language where the language used is uncivil, insulting, contemptuous, vicious or malicious.
An NLRB administrative law judge (ALJ) found that:
  • The employer violated Section 8(a)(1) of the NLRA in February 2010 when it:
    • promulgated an oral rule to prohibit the mechanics from meeting with union representatives at its facility in response to employees' efforts to organize; and
    • terminated the meeting between off-duty mechanics and union representatives.
  • Several employee handbook rules were unlawfully overbroad and infringed on employees' Section 7 rights, including:
    • the disloyalty rule;
    • the stealing/theft rule; and
    • the employee performance rule.
  • The personal conduct rule is lawful because of the rule's specific description of the prohibited behaviors, none of which are protected.
Both parties filed exceptions to the ALJ's order.

Outcome

The Board unanimously held that:
  • The employer's oral rule prohibiting the mechanics from meeting with union representatives at the employer's facility was unlawfully overbroad as it interfered with employees' Section 7 rights to the extent that the union representatives were lawfully on the employer’s premises.
  • The employer's termination of the meeting between the off-duty mechanics and the union representatives:
    • unlawfully infringed on the Section 7 rights of the employees and the union representative that was also an employee; but
    • did not violate the rights of the union representatives who were not employees because the employer can lawfully limit their access to the mechanics at its facility.
  • The stealing/theft rule was lawful. Reading the rule in context, in the section addressing stealing, employees would reasonably construe the rule as banning theft or other misappropriation of property, and not as banning the use of non-work areas of the employer's premises for protected Section 7 activity.
  • The employee performance rule's ban on "poor work habits including loafing, wasting time, loitering, or excessive visiting" was lawful because:
    • reading the rule in context, including the rule's heading, the other listed examples of prohibited activity and the rule's placement between bans on neglecting job duties and incompetence, employees would reasonably construe "poor work habits" to refer to the unprotected failure to perform job duties when the employee is expected to be working productively;
    • the cases the ALJ relied on in finding the rule lawful are distinguishable because they involved no-loitering rules, many of which prohibited loitering during non-work hours; and
    • the General Counsel's separation of the word "loitering" from the rule's context was an ineffective attempt to analogize it to cases involving much broader and more ambiguous rules.
As to the disloyalty rule:
  • The Board's majority (Chairman Pearce and Member Schiffer):
    • held that the second and third bullets of the rule prohibiting participation in outside activities or conducting oneself during non-working hours in a manner that is detrimental to the company's image or reputation were unlawfully overbroad; and
    • distinguished the disloyalty rule from the rules found lawful in Ark Las Vegas Restaurant Corp. (335 N.L.R.B. 1284 (2001)) and Lafayette Park Hotel (326 N.L.R.B. 824 (1998)) because, unlike the disloyalty rule, employees would reasonably construe the Ark and Lafayette rules only to prohibit unprotected conduct when read in context.
  • Member Johnson dissented, finding that:
As to the personal conduct rule:
  • A Board majority (Chairman Pearce and Member Schiffer) held that the first bullet prohibiting "discourteous or inappropriate attitudes or behaviors to passengers, other employees or members of the public" is unlawfully overbroad and is similar to the rule that was struck down in 2 Sisters Food Group, Inc. (357 N.L.R.B. slip op. 168, (Dec. 29, 2011)) for being so imprecise that employees would reasonably construe it to limit their communications concerning employment terms and conditions.
  • A different Board majority (Members Johnson and Schiffer) held that the second bullet's use of the words "uncivil" and "insulting" is not so patently ambiguous as to be unlawfully overbroad and is similar to the rule found lawful in Lutheran Heritage Village-Livonia (343 N.L.R.B 646 (2004). Employees would reasonably construe the personal conduct rule only to require that they act with general notions of civility, and rules requiring employees to use appropriate business decorum when communicating with others do not infringe on Section 7 rights.
  • Member Johnson dissented from the majority's holding as to the first bullet, finding it was not unlawfully overbroad because of its similarity to rules found lawful by the Board in other decisions (Flamingo Hilton-Laughlin; Hyundai Am. Shipping Agency, Inc., 357 N.L.R.B. slip op. 80, (Aug. 26, 2011)).
  • Chairman Pearce dissented from the separate majority's holding as to the second bullet:
    • finding that since the words "uncivil" and "insulting" were undefined in the rule, they were so imprecise that employees could reasonably interpret them to prohibit protected activity; and
    • analogizing this rule to the rule struck down in Flamingo Hilton-Laughlin, which did not define "abusive" and "insulting" language or conduct, and therefore could reasonably be construed to prohibit lawful organizing activity.
As to the handbook's Freedom of Association Policy:
  • The Board unanimously held that the policy, which positively recognized that employees could engage in various Section 7 activities and instructed that none of the handbook rules should be interpreted in a way to suggest that the employer will interfere or retaliate against employees for engaging in Section 7 activity, did not insulate the provisions from being interpreted to infringe on Section 7 rights.
  • The Board's majority (Chairman Pearce and Member Schiffer) held that the policy is ineffective in ensuring that employees would not interpret the contested rules to restrict Section 7 rights because:
    • the policy is too narrow, focusing only on union organizational rights, whereas an effective safe harbor provision should address all of the rights protected by Section 7;
    • the policy is not prominent or located near the contested rules in the handbook;
    • the policy and the contested rules do not expressly reference each other; and
    • the employer has committed unfair labor practices despite the policy's guarantee that the rules will not infringe on Section 7 rights.
  • Member Johnson, in partial dissent, asserted that, in appropriate circumstances, employee handbook savings clauses could protect employers. However, without relying on the narrowness and context analysis used by the majority, he held that the policy was ineffective in protecting the employer here because, by engaging in unlawful activity to thwart employees' organizing efforts (the unlawful implementation and enforcement of a no access restriction), the employer's actions contradicted the stated protections of Section 7 activity.

Practical Implications

In light of this decision, employers should use specific language and consider defining terms when drafting rules prohibiting unprotected employee activity, and note the Board majority's tendency not to find civility codes lawful. Moreover, employers should understand that freedom of association clauses, and savings clauses of different names in employee handbooks, may be helpful in avoiding ULP liability for contested employee handbook provisions if:
  • The clause is:
    • prominently set out in the handbook;
    • near the contested provisions; or
    • referenced in the contested provisions.
  • The employer does not undercut stated intentions not to infringe on Section 7 rights by committing ULPs belying those intentions.