How does a presidential election impact a company’s employee handbook?
The link between the White House and an employee handbook is more direct than one might imagine: First, the National Labor Relations Act (NLRA or Act) regulates employee handbooks; second, the National Labor Relations Board (NLRB or Board) interprets the Act; and third, Board members are appointed by the President.
Even though the NLRA and the rights it protects have existed since 1935, the interpretation of that law changes with each new presidential administration. As Board members appointed by a Republican president tend to be more employer-oriented and Board members appointed by a Democratic president tend to be more union-oriented, a change in the White House can bring changes to how the NLRB evaluates a company’s employee handbook. Because the law staggers the Board members’ terms, it is expected that Democratic appointees will hold a majority on the Board sometime after Labor Day 2021. Most recently, President Biden nominated Gwynne Wilcox, a union-side labor attorney, to fill a vacant seat on the Board. The President will have another opportunity to fill a seat with a Democratic appointee in September, when the term of one of the three Republican-appointed members expires.
For private-sector employers, the NLRA regulates employee handbooks because it both governs relations between employers and their union employees and it ensures that employers aren’t acting in a manner that chills or otherwise unlawfully suppresses an employee’s federal right to act together with other employees for their mutual aid and protection. In other words, the NLRA protects non-union employees who act together with respect to their terms and conditions of employment, whether or not they do so with a union. Employee policies that interfere with that right violate the Act.
So, the upcoming shift in control likely will shift how the Board views facially neutral handbook policies–which do not explicitly prevent employees from engaging in protected activity but could violate the Act if they “would reasonably tend to chill employees in the exercise of their Section 7 rights.” The NLRB currently evaluates these policies using the standard set forth in Boeing, a 2017 Republican-era NLRB decision. The Boeing standard balances the workers’ rights under the NLRA against the employers’ legitimate justifications for regulating conduct in the workplace.
This standard has allowed employers more flexibility in drafting policies. Prior to Boeing, the NLRB used the more stringent Lutheran Heritage standard, which found neutral policies unlawful if employees would reasonably construe the policy’s language to prohibit protected concerted activity; it’s expected that the Lutheran Heritage standard (or a similarly restrictive standard) will return once the NLRB returns to a Democratic majority later this year.
As this shift in control unfolds, employers may want to evaluate their current policies under the Lutheran Heritage standard. The following are types of policies–and general principles for revising those policies–to consider. Much of this guidance comes from information disseminated by the NLRB’s General Counsel shortly after the Board adopted the Lutheran Heritage standard:
Workplace conduct: Policies regarding workplace conduct are likely to be found unlawful if they restrict employees from criticizing the employer’s labor practices and working conditions or if they restrict protected discussions with co-workers. For example, policies that generally ban “offensive” comments or “inappropriate” discussions will typically be deemed unlawful. While employers may generally prohibit insubordination, employers should be cautious when prohibiting particular conduct that does not amount to insubordination. Policies that merely require employees to be respectful to clients, customers and competitors (rather than the employer) or cooperative with co-workers and the employer are more likely to be found lawful.
Media contact: As noted by the General Counsel, employees enjoy the right to communicate with third parties, including the media, regarding wages, benefits and other terms and conditions of employment. Policies regarding employee media contact are more likely to be found lawful if they make clear that they restrict employees from speaking “on behalf of the employer,” rather than restricting the employees from speaking to outsiders on their own behalf or on behalf of other employees.
Confidentiality: Policies that restrict disclosure of employee information, or terms and conditions of employment, are likely to be found unlawful. Specifically, policies with bans on disclosing information, where “information” reasonably includes employee information or personnel information, will likely be deemed unlawful. Instead, these policies should more narrowly define confidential information in prohibiting its disclosure and should not reference information regarding employees or anything that would reasonably be considered a term or condition of employment.
Conflict of interest: A conflict of interest may arise where, for example, an employee holds ownership interest in a competitor of the employer or maintains a board position with a client of the employer. This is problematic because an employee’s personal interest may differ from the employer’s own interest in a way that could hurt the employer’s business due to the opposing interests. Employers may draft these policies to require disclosure of potential conflicts or prevent such actions in order to avoid even the appearance of a conflict. However, these policies are likely to be unlawful where they serve to prohibit employee participation in concerted activity to improve their terms and conditions of employment, such as where a policy broadly prohibits any action that is not in the employer’s best interest. To avoid language that could be reasonably construed to prohibit such activities, conflict-of-interest policies should include context and examples or otherwise clarify that a prohibition is limited to legitimate business interests.
Use of intellectual property: Employees may engage in fair protected use of the employer’s intellectual property. Therefore, policies with broad bans on employees’ noncommercial use of the employer’s logos, copyrights and trademarks that would prohibit their fair use in the course of protected concerted activity are likely to be found unlawful. However, policies that simply require employees to respect laws permitting fair use will typically be found lawful.
Photography and recording: Policies that contain total bans on photography and recording will typically be found overbroad and unlawful because they would prevent employees from documenting unfair trade practices and from taking pictures or recordings on non-work time. Policies instead should be narrowly tailored to address specific issues or circumstances, such as if the policy is created in response to a breach of patient privacy.
Leaving work: Policies may not be drafted in a way that would reasonably be construed to disallow employees from going on strike or participating in a walkout. These policies are thus likely to be found lawful so long as they do not reference “strikes,” “walkouts,” “disruptions” or the like.
Employers may want to begin reviewing their employee policies to ensure that they would be deemed lawful under the Lutheran Heritage or similar standard, paying particular attention to the types of policies described above. Employers may also wish to consult with competent legal counsel about how to revise these policies in light of the changes to come.