Employers, Does Your Employee Handbook Violate the National Labor Relations Act?

A recent National Labor Relations Board decision appears to dramatically expand the interpretation and application of certain provisions of the National Labor Relations Act (“NLRA”) to handbook provisions and actions taken by non-union employers – with significant potential consequences for employers.

On April 7, 2016, U.S. Administrative Law Judge David I. Goldman issued an opinion against Quicken Loans Inc., Fathead LLC, and four other related companies in Quicken Loans Inc. et al. and Hugh MacEachern (Case Number 07-CA-145794). The underlying suit, brought on behalf of a Quicken employee, alleged that certain policies in the employee handbook – called the “Big Book” – violated the NLRA. Like many other employee handbooks, the 200-page Big Book, which was issued to new employees upon hire, included an introduction to the company, statements on the culture, and dozens of policies on topics from social media to appropriate use of company computers.

At issue in the case was Section 8(a)(1) of the NLRA, which makes it an unfair labor practice for an employer to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7 [of the NLRA].” Section 7 of the NLRA provides the following:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities.

The main purpose of Section 7 is to protect the rights of employees to discuss, debate, and communicate with each other regarding their workplace terms and conditions of employment. In an earlier administrative decision, the National Labor Relations Board held that suppressing an employee’s ability to discuss work threatens an employee’s ability to join a union in the first place. 

Viewed in this light, Quicken could be seen as violating the law if any Big Book provision reasonably dissuaded a non-union employee from discussing work conditions. The test to determine whether a work rule violates Section 8(a)(1) is whether the rule would reasonably tend to chill employees in the exercise of their Section 7 rights.

In reaching his decision, Judge Goldman found that 24 different Big Book rules improperly quelled the employees’ ability to discuss work conditions in violation of Section 8(a)(1), including:

• If you use social media to connect with clients, we expect you to represent yourself in a professional manner in both dress and conduct.
• No solicitations. Unauthorized posting and distribution of solicitation literature is prohibited on the Company’s premises.
• Think before you Tweet. Or post, comment or pin. What you share can live forever. If it doesn’t belong on the front page of The New York Times, don’t put it online.
• Company communication and information devices are to be used solely for the Company’s business purposes.
• All media and press inquiries pertaining to the internal business affairs of the Company or any of the Company’s directors, officers, or executives shall be treated as Proprietary/Confidential information and all such inquiries shall be directed to the Company’s Corporate Communications personnel.
• [It is prohibited to use] Company Resources to engage in inappropriate acts that exhibit conduct that is not in the best interest of the Company, its clients, or Team Members.
• Something wrong at QL? Don’t take it online. Resolve work-related concerns by speaking directly with your Team Leader or Team Relations Specialist.
• You shall not photograph or record through any means the Company’s operations, systems, presentations, communications, voicemails, or meetings.
• These Guidelines are considered an internal confidential document.

Provisions similar to these are common and appear in employee handbooks across the U.S.  On their face, they have nothing to do with an employee’s ability to discuss employment terms or efforts to unionize the workforce. It is unlikely that Quicken’s intent was to quell prospective union activity. In fact, testimony from Quicken employees established that the Big Book had little-to-no relevance to the day-to-day operation of the company. Regardless, Judge Goldman found that these provisions had the potential to “chill” an employee’s willingness to engage in such discussions and violated the NLRA.

Employers should consider themselves warned: policies such as those in the Big Book are a potential source of liability, even if never enforced. It is clear that the National Labor Relations Board is advancing union and employee rights by expanding its interpretation and application of the NLRA. Quicken has publicly stated that it will appeal the ruling. In the interim, employers should revisit their employee policies and handbooks and immediately have them reviewed by an attorney.

If we can be of any assistance, or you have any questions regarding how the National Labor Relations Board’s opinion applies to your workplace or other employment issues, please feel free to contact us.