Labor Board Continues Its Focus on Handbooks and Work Rules

Two recent cases in the hospitality industry serve to emphasize the National Labor Relations Board’s continuing focus on employer handbook policies and work rules. In Remington Lodging & Hospitality LLC, 359 NLRB No. 95 (Apr. 24, 2013), the Board held that five separate rules found in the employer’s handbook violated the National Labor Relations Act as applied to employees who presented a petition to the hotel manager in the hotel lobby, in the presence of guests, and who later distributed leaflets on hotel property. The five rules in question stated that employees: (1) were to stay in their working areas while on duty, and not enter “other parts of the hotel, parking lots, or outside facilities without the permission of the immediate Department Head;” (2) were prohibited from distributing literature in “guest areas or work areas,” and were prohibited from “solicitation of guests;” (3) were to avoid having any “conflict of interest with the hotel;” (4) were to avoid “behavior that violates common decency or morality or publicly embarrasses the hotel;” and (5) were prohibited from engaging in “insubordination.” The Board held that it was unnecessary to determine whether any of these work rules were also invalid on their face because the employer applied them to penalize employees for engaging in legally protected behavior. Chairman Pearce added that he would find the first, third, and fourth rules identified above invalid on their face.

The Board found three additional rules in the employer’s handbook invalid on their face. The first of these prohibited employees from returning to the hotel before or after working hours without permission. The Board noted that this type of “employee access” rule is valid only if it is limited to the interior of an employer’s facility and restricts access for all purposes, rather than allowing limited access for business-related purposes or at the discretion of management. The second rule prohibited the disclosure of “confidential information.” The Board concluded this rule was overbroad because it defined confidential information to include “personnel file information” and “labor relations information.” As the Board has noted many times, employees must be allowed to discuss wages and other terms and conditions of employment freely among themselves, with non-employees, and with union representatives. Finally, the third rule prohibited employees from giving “any information to the news media regarding the Hotel, its guests, or associates [i.e., employees], without prior authorization.” The Board noted that the Act protects the right of employees to seek public support for their grievances through appeals to the general public, including through the media.

Remington serves as a reminder that the Board will invalidate handbook provisions if they: (1) can reasonably be construed to prohibit protected activity (i.e., are unlawful on their face or are impermissibly ambiguous); (2) are promulgated in response to union activity; or (3) are applied to restrict or penalize protected activity. At least some of the handbook provisions addressed in Remington would likely have survived analysis under the first two tests, but were invalidated because the employer used them to penalize protected conduct. Other rules were invalid both as written and as applied. In today’s legal environment, with the Board ever more aggressively scrutinizing handbook provisions, employers need to draft rules with an eye toward avoiding language that would prevent employees from engaging in protected activity, while still setting employee performance and conduct expectations in a manner that fully meets the employer’s legitimate business interests. Then, the employer must take care to avoid applying lawful rules in a way that penalizes protected conduct. Much of the activity protected under Section 7 has the potential to annoy or offend managers, or to disrupt business. Nevertheless, even lawful personnel policies cannot be used to deter protected conduct.

Fortunately, not all of the Board’s recent pronouncements on handbooks and work rules have been adverse to employers. In Flamingo Las Vegas Operating Company, 359 NLRB No. 98 (Apr. 25, 2013), the NLRB General Counsel asserted that an employer promulgated an unlawful work rule when a supervisor scolded an employee who had begun a union organizing drive for failing to follow the “chain of command,” and for failing to take his concerns to the employer’s human resources department before involving an outside entity. The Board rejected this argument, holding that a verbal comment by an individual supervisor does not constitute the promulgation of a company rule, particularly where there is no evidence that the comment was communicated to the workforce as a whole. Although the Board agreed that the supervisor’s comments violated the Act, the company was not faced with an order requiring it to “rescind” an allegedly unlawful rule, because no rule existed. Employers can thus take some small comfort from the fact that, although it is becoming increasingly difficult to draft handbook provisions and work rules that will satisfy Board scrutiny, they will not be expected to defend every stray comment by a supervisor as if it were a company-promulgated work rule.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.