NLRB’s Guidance on Handbook Rules Explains Three Categories of Work Rules

In Memorandum GC 18-04 entitled, “Guidance on Handbook Rules Post-Boeing,” NLRB’s General Counsel issued guidance on interpreting handbook rules in light of The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017).  

Under Boeing, the Board will evaluate facially neutral work rules by balancing the (1) rule’s negative impact on employees’ rights and (2) employers’ legitimate justifications to maintain discipline and productivity at work.  The Board will no longer strike down work rules that merely could be interpreted as covering Section 7 activity and will only prohibit work rules that would be interpreted as such. 

There are three categories for work rules:

• Category 1: Generally Lawful Rules
• Category 2: Rules That Are Not Obviously Lawful or Unlawful
• Category 3: Unlawful Rules

Category 1: Rules that are Generally Lawful to Maintain

Category 1 rules are generally lawful because either:

• The rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the NLRA; or
• The potential adverse impact on protected rights is outweighed by the business justifications.

In the Memo, the General Counsel cautioned that just because the facially neutral rule falls within Category 1, employers are still prohibited from applying the rule against employees engaged in protected concerted activity. 

Examples of generally lawful Category 1 rules are listed in the chart below.

Category 2: Rules Warranting Individualized Scrutiny

Work rules in Category 2 are not obviously lawful or unlawful and must be individually scrutinized to determine whether the employer’s legitimate justifications outweigh the adverse impacts on Section 7 rights.  When evaluating the context of Category 2 rules, the Board should evaluate the rule from the perspective of employees who interpret the work rules as they apply on an everyday basis to their job.  

Considerations when assessing the context of the rule include:

• Place of the rule among other rules;
• The kinds of examples provided;
• Type and character of the workplace;
• Evidence that the rule actually caused employees to refrain from Section 7 activity; and
• The ease which employers could tailor the rule to accommodate both its business interests and employees’ Section 7 rights.

Examples of possible Category 2 rules include:

• Broad conflict-of-interest rules that do not specifically target fraud and self-enrichment.
• Confidentiality rules broadly encompassing “employer business” or “employee information” (as opposed to customer or proprietary information).
• Rules regarding disparagement or criticism of the employer (as opposed to disparagement of employees).
• Rules regulating use of the employer’s name (as opposed to employer’s logo/trademark).
• Rules generally restricting speaking to the media or third parties (as opposed to speaking to the media on the employer’s behalf).
• Rules banning off-duty conduct that might harm the employer (as opposed to insubordinate or disruptive conduct at work).
• Rules against making false or inaccurate statements (as opposed to rules against making defamatory statements).

Category 3: Rules that are Unlawful to Maintain

Rules in Category 3 are generally unlawful.  Examples of prohibited Category 3 rules include:

• Confidentiality rules specifically regarding wages, benefits, or working conditions.
• Rules against joining outside organizations or voting on matters concerning the employer.

Employer Takeaways

In light of this Memo, employers should:

• Evaluate their facially neutral work rules and consider each rule’s adverse impact on employees’ Section 7 rights, as well as employers’ legitimate justifications;
• Exercise caution when relying on rules identified in the Memo as acceptable Category 1 rules since the Memo gives guidance but is not binding precedent;
• Avoid applying Category 1 rules in a manner that forbids employees from engaging in Section 7 activity;
• Support Category 2 rules with business justifications, remaining mindful of the context of the rules (place of the rules, examples provided, type of workplace, chilling effect on protected concerted activity, and how easily the employer could have tailored the rule to balance its business interests and employee rights); and
• Delete or revise Category 3 rules.

[1] Quotations, ellipses and citations are excluded.