Say What? NLRB Decisions Regarding Confidentiality, Respectful Workplace, and Non-Disparagement Policies

shari lane headshotBy Shari Lane

First let me say that it’s not as bad as it sounds.  Well, maybe it is.  We told you last year that the National Labor Relations Board (NLRB or “the Board”) continues to hand down decisions that severely restrict employer policies.  (If you missed that issue, you can still find our Fall 2013 newsletter on our website).  One year later, they’re still at it . . . .

You’ve got so many things that call for your attention, so you may be tempted to ignore this article.  Perhaps your workforce isn’t unionized, and you don’t think the National Labor Relations Act applies to you. (Think again).  Or perhaps you have carefully read all the information your lawyer and human resources specialist have provided, and you’re certain you are already on the right track.  (But “the right track” keeps changing!)

Before diving into the details, here’s a refresher course:

  • The National Labor Relations Act (NLRA or “the Act”) protects the right of employees to engage in “concerted activity” for the purpose of improving the terms and conditions of employment;
  • The NLRA applies to almost all private employers, including those whose employees are not currently represented by a union;
  • It is a violation of the NLRA for an employer to have policies that prohibit “concerted activity” or policies that employees might “reasonably construe” as prohibiting “concerted activity” (even if the employer never actually enforces the policy as to any employee); and

(This is where things get really tricky)

  • “Concerted activity” can include publicly dissing one’s boss on Facebook, sharing co-workers’ personal information, and even making a scene in front of customers.

It’s not all bad news.  The NLRB recognizes “the right of employers to maintain discipline in their establishments” and employers’ “legitimate interest in preventing the disparagement of its products or services and, relatedly, in protecting its reputation . . . from defamation.”  But as always, the devil is in the details.

As outlined in this article, confidentiality and respectful workplace policies have come under fire, and policies that have long been accepted as industry best practices may run afoul of the NLRB’s ever-changing rules.

Confidentiality

Common sense suggests that employers may (and should) prohibit employees from disclosing trade secrets, confidential operational and financial information, marketing plans, customer information, and information about co-workers such as their personal contact information, discipline, wages, leave, and medical conditions.  Some of that may legitimately remain confidential, but in the current legal climate, a confidentiality policy must be drafted very carefully to avoid even an implication that employees are prohibited from “concerted activity,” as such disclosures are generally protected by law.

Philips Electronics of North America provides a useful example. An employee named Craft was repeatedly disciplined for harassing and bullying coworkers.  After receiving a final warning for harassing a co-worker, he paraded the write-up around at work and loudly said he was being punished because of the co-worker’s accusations against him.  The co-worker who had filed the complaint against Craft reported to human resources that Craft was publicly accusing her of getting him in trouble and taunting her for having reported him.  Craft was fired, at least in part, for violating an (unwritten) policy that makes employee discipline confidential and prohibits employees from discussing discipline.

On August 14, 2014, the NLRB determined that this policy violated the NLRA.  The Board stated: “It is important that employees be permitted to communicate the circumstances of their discipline . . . so that their colleagues are aware of the nature of discipline being imposed, how they might avoid such discipline, and matters which could be raised in their own defense.”

Of course, a policy that might otherwise violate the NLRA may be permissible if the employer can show “a legitimate and substantial business justification” for the policy.  Many employers encourage internal reporting by promising anonymity, to shield complaining employees from retaliation.  That certainly sounds like “a legitimate and substantial business justification” for a policy that prohibits disclosing the details of a complaint, but at this point we can’t guarantee the NLRB would see it that way.

Philips Electronics followed the general trend of the last few years.  In 2012, the NLRB shot down Costco’s Privacy Policy, which stated:

Costco respects our members’ and employees right to privacy, and it is up to each employee to take every precaution to make sure we respect this right.  In the course of our business, we collect from our members and employees a substantial amount of personal information (such as name, address, phone number, e-mail address, social security number, membership numbers and credit card numbers).  All of this information must be held strictly confidential and cannot be disclosed to any third party for any reason, unless (1) we have the person’s prior consent or (2) a special exception is allowed that has been approved by the legal department.  All Costco employees shall refrain from discussing private matters of member and other employees. This includes topics such as, but not limited to, sick calls, leaves of absence, FMLA call outs, ADA accommodations, workers’ comp injuries, personal health information, etc.

These confidentiality obligations were reiterated in Costco’s Electronic Communications policy, and improper disclosure of confidential information was listed as a basis for discipline.

The NLRB took issue with Costco’s Privacy Policy, pointing out that “sick calls, leaves of absence, FMLA call outs, ADA accommodations, workers’ comp injuries . . . clearly are terms and conditions of employment.”

According to the Administrative Law Judge who heard the initial case, the problem could have been cured by explicitly stating that employees are allowed to “discuss among themselves personnel information” and by expressly stating that employees are not allowed to disclose “information that the employee obtained from the employer’s files or records, obtained in the course of their job duties.” 

The judge’s proposed solution leaves the door wide open for significant problems.  Consider: if Mary voluntarily tells John about her medical condition and her FMLA leave (that is, John learned about the medical leave other than “from the employer’s files”), John is now free to share that information with Sally, even if John received the information from Mary in the course of his job duties and Mary requested confidentiality.  Any attempt to prohibit John from doing so would violate the NLRA, according to the Costco decision.  Of course, not prohibiting John from sharing such personal, confidential information could expose the company to negligent supervision claims, invasion of privacy claims, and/or claims of violation of GINA or even HIPAA (if the employer is also a covered entity).

Hence the title of this article.

The lesson from these cases is that confidentiality policies must expressly carve out an exception for protected disclosures.  The distinction between protected and non-protected disclosures is still somewhat unclear, so stay tuned . . . .

Respectful Workplace and Non-Disparagement Policies

Most employee handbooks include some version of “play nice.”  It is reasonable to expect that your employees will treat each other, their supervisors, and members of the public with respect. Those apparently reasonable policies can run afoul of the NLRA, however.

For example, the Hills and Dales Hospital’s “Values and Standards of Behavior Policy” prohibits employees from making “negative comments about  . . . fellow team members” and engaging in or listening to negativity or gossip.  The policy also requires employees to “represent [the hospital] in a positive and professional manner in every opportunity.”

By now you’ve guessed it: in April, 2014, the NLRB tossed the policy.  While an employer may restrict “how employees communicate with others while carrying out their duties for the employer,” the Board found that the hospital’s policy impermissibly tried to restrict “employees’ activities in the community at large . . . on the employees’ own time.”

In the 2012 Costco case referenced above, the NLRB nixed another policy prohibiting communications that “damage the Company  . . . or damage any person’s reputation.”  Similarly, a policy stating that employees could be disciplined for “inability or unwillingness to work harmoniously with other employees” got the axe in 2011.  (3 Sisters Food Group).

However, the NLRB has reiterated in recent cases that an employer may lawfully prohibit egregious or illegal behavior, even when such behavior occurs after hours, where the behavior implicates the company.  The Board cited with approval policies prohibiting harassment, verbal abuse, the use of “abusive or profane language,” or conduct that is “malicious, abusive, or unlawful,” or “threatening, intimidating, [or] coercive.”

The NLRB also affirmed the validity of a policy requiring “appropriate business decorum” for work-related communications with customers and vendors.  In addition, there is a long-standing rule that an employee’s behavior towards his co-workers and supervisors may be so “opprobrious” that even otherwise protected communication (such as complaining about the terms and conditions of employment) will not have the protection of the Act.

Wait a minute, you may be saying (if you’ve been paying attention to this newsletter and the general media barrage of information on this subject): what about the Starbucks case? What about Triple Play Sports Bar and Grill?

For those of you who haven’t followed the news, here’s the scoop. An off-duty Starbucks employee went to the workplace and swore at his supervisor, in front of customers. It was the second offense, and he was fired for disrupting business and swearing at his boss (both violations of company policy).  Sounds reasonable, right?  But in June, 2014, the NLRB found the termination was unlawful, and a hue and cry went up bemoaning the loss of an employer’s right to prohibit profanity and rude behavior in the workplace.  But here’s “the rest of the story”: the employee was at the store to flaunt Starbucks’ prohibition on wearing union-support pins, and his termination paperwork stated he was ineligible for re-hire in part because he “strongly support[ed] the . . . union.”

In other words, the Starbucks decision does not really restrict respectful workplace policies, or prevent employers from implementing a policy that generally prohibits swearing at your boss.  Rather, the Starbucks decision reaffirms long-standing rules that an employer may not terminate an employee because he or she supports a union, or otherwise engages in protected concerted activity.

The situation in Triple Play Sports Bar and Grille is a little murkier.  A former employer posted (foul-mouthed) outrage on his Facebook page because the restaurant’s mistake meant he owed taxes.  A current employee commented that the employees were going to discuss the problem at an upcoming meeting.  A couple of customers jumped in, and the profanity and insults flowed freely.  Another current employee clicked “Like” on the original post, and a third employee agreed that their boss was “an asshole.”  The employee who clicked “Like” and the employee who used profanity were fired for disloyalty.  The NLRB found both terminations violated the Act.

Say what?

The Board reasoned that the conversation about taxes was a complaint about the terms and conditions of employment, and clicking “Like” and disparaging the manager were concerted activity.  In addressing the long-standing rule that an employer may legitimately prohibit profanity, the Board pointed out that the “use of a single expletive” was not comparable to “a sustained profane ad hominem attack.”

Two lessons emerge from these cases: A “respectful workplace policy” may (1) require on-duty respectful and courteous behavior and communication, and (2) prohibit off-duty communications only if such communications implicate the company and only with regard to extreme behavior (i.e. harassment, discrimination, threats, “sustained” profanity, obscenity, and defamation).  Such policies should clearly state not only the rule but the exceptions to the rule, and should generally provide examples of protected and prohibited activity.

As stated at the beginning of this article, employers should remember that the NLRA applies to most private employers, regardless of whether their workforce is unionized, and should remain aware of the NLRB’s continually developing perspective on workplace policies.  For assistance in reviewing or developing workplace policies, feel free to contact one of our Labor & Employment attorneys at 503.242.0000.