Good News for Employers! NLRB Upholds Employee Handbook Policies Tailored to Legitimate Business Purposes

Section 7 of the National Labor Relations Act (“NLRA”) guarantees employees the right to organize and collectively bargain through representatives and applies to a wide range of employer conduct including the contents of employee handbooks. Until recently, the National Labor Relations Board’s (“NLRB”) standard for determining whether employee handbooks violated the NLRA was relatively employee friendly and found handbook policies to be unlawful if they could merely be “reasonably construe[d]” as prohibiting activity protected by the NLRA.

However, in 2017, the NLRB’s decision in The Boeing Co., 365 NLRB No. 154 (Dec. 14, 2017) created a new standard under which an employee handbook policy will be deemed unlawful only if “the nature and extent of the potential impact on NLRA rights” outweighs the “legitimate justifications associated with the rule.”

Despite the new standard, some Administrative Law Judges (“ALJ”) have continued to find even seemingly innocuous handbook policies to infringe on employees’ rights under the NLRA. For example, a recent ALJ decision went so far as to find an employer’s handbook unlawful for including a policy that simply prohibited employees from using the employer’s email system for personal use. See Argos USA LLC d/b/a Argos Ready Mix, LLC, 369 NLRB No. 26 (Feb. 5, 2020).  However, to the relief of employers across the nation, the NLRB made it clear that, pursuant to Boeing, the ALJ in Argos went too far. Thus, the NLRB overturned the ALJ’s decision on the ground that the employer was a “typical workplace” and did not prevent its employees from communicating verbally or prohibit the physical distribution of literature concerning their rights protected by the NLRA.

The NLRB also applied Boeing to overturn the ALJ in two other respects:

1. The Handbook’s Confidentiality Agreement

Applying Boeing, the ALJ determined that employees would reasonably interpret the Confidentiality Agreement to cover the employees’ own wages and personal information. Alternatively, in overturning the ALJ’s decision, the NLRB found it dispositive that the agreement “clearly appl[ied]” only to the employer’s own proprietary business information. In making this determination, the NLRB focused on language in the agreement that stated that employees may not disclose “confidential company information.” Moreover, the NLRB found that nothing in the confidentiality agreement suggested it applied to employees’ wages, contact information, or other terms and conditions of employment protected by the NLRA.

2.The Handbook’s Cell Phone Policy

The ALJ had also found the employer’s cell phone policy, which prohibited its drivers from possessing cell phones while operating the employer’s commercial vehicles, to violate the NLRA because it could “potentially” interfere with their rights protected by the NLRA. Alternatively, in upholding the employer’s policy, the NLRB looked primarily to the policy’s legitimate purpose to protect its drivers and the general public. Moreover, as with the employer’s electronic communications policy, the policy was limited in scope and did not prevent employees from utilizing other modes of communication to discuss their NLRA protected rights.

In sum, this recent decision from the NLRB brings much needed reassurance to employers that they will not be penalized for drafting reasonable workplace policies that are narrowly directed towards furthering their legitimate business interests such as employee safety, efficient utilization of company resources, and protection of confidential information.