Most employers are aware that carelessly drafted employee handbook language may create problems.  The most typical problems arise from policy language which fails to maintain “at will” employment status, and verbiage which creates entitlement to particular disciplinary procedures or to benefits.  Three recent cases highlight an issue that is not always recognized—language in employment policies or handbooks may violate federal labor law.

The first case to look at is Cintas Corporation, 344 NLRB No. 118 (2005).

Cintas maintained an employee handbook called the “Cintas Corporation Partner Reference Guide” which contained the following provisions:

1. Our business is highly competitive.Fortunately, we have an advantage over our competition.That advantage is our people—“partners,” as we call ourselves.
   
2. We honor confidentiality.We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners, new business efforts, customers, accounting and financial matters.
   
3. Examples of behavior that could result in disciplinary action are: 
   
   …violating a confidence or unauthorized release of confidential information.

A union was attempting to organize Cintas employees, and the union alleged the employer committed several unfair labor practices.  One unfair labor practice charge alleged that by maintaining the handbook provisions set forth above, Cintas limited its employees’ right to discuss their terms and conditions of employment, in violation of Section 8(a)(1) of the Labor Management Relations Act (“Act”). 

Cintas asserted that the handbook provisions should not be read as broadly as the NLRB General Counsel wanted them to be read and argued that there was no evidence that the policies had any chilling effect upon the employees’ Section 7 rights. 

Section 7 of the Act protects the right of employees 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.”

Brenda Abramovich, Cintas’s director of human resources for the rental division, identified numerous flyers issued by the union in 2003 and 2004 which were distributed to Cintas employees.  These flyers contained pictures and names of a number of Cintas employees together with their wage rates and other terms and conditions of employment.  For example, one flyer entitled “Uniform Justice” contained a picture of an employee with a copy of her earning statement showing her hourly pay rate.  Another showed a map of the United States, listing 12 of Cintas’s employees at 11 of its facilities, together with the hourly pay rate of each of these employees.  Abramovich testified that she received all of these flyers.  She checked with the general manager of each plant where an identified employee was listed in a union flyer, and asked if any of these employees had been disciplined for her or his appearance in the flyer, and the answer for all the listed employees was “no.”

The ultimate question in a case like Cintas Corporation is whether employees would reasonably construe the rules as precluding them from discussing their terms and conditions of employment with other employees or a union, or, alternatively, whether they would understand that the rule was designed to protect their employer’s legitimate business interests.  Any ambiguity in the rules will be resolved against the employer.

The Administrative Law Judge (“ALJ”) found that even though none of the employees pictured or referred to in the union’s flyers were disciplined for the release of the information contained in the flyers, the law was clear that the mere existence of such a rule, even if not enforced, constituted an unlawful interference with employees’ Section 7 rights.  In Franklin Iron & Metal Corp., 315 NLRB 819, 820 (1994), the ALJ, as affirmed by the Board, stated:

It makes no difference whether the employees were “asked” not to discuss their wage rate or ordered not to do so.  Nor does it matter if the rule was unenforced or unheeded.  In the absence of any business justification for the rule, it was an unlawful restraint on the rights protected by Section 7 of the Act and violated Section 8(a)(1).

The ALJ found that Cintas employees would reasonably understand the confidentiality provisions in the manual to restrict their right to discuss their wages and terms and conditions of employment with their fellow employees and the union.  Cintas failed to present a legitimate business purpose for the prohibitions contained in the rule. 

On review, the NLRB panel adopted the ALJ’s finding that Cintas violated Section 8(a)(1) of the Act by maintaining the confidentiality rule.

Since the rule did not explicitly restrict Section 7 activity, it would only violate Section 8(a)(1) upon a showing of one of the following:  (1)  employees would reasonably construe the language to prohibit Section 7 activity; (2)  the rule was promulgated in response to union activity; or (3)  the rule was applied to restrict the exercise of Section 7 rights.  The panel agreed with the ALJ that the rule’s unqualified prohibition of the release of “any information” regarding “its partners” could be reasonably construed by employees to restrict discussion of wages and other terms and conditions of employment with their fellow employees and with the union.  Therefore, the rule was unlawful.

In another recent case, Fiesta Hotel Corp., Case 28-CA-17853 (2005), there was another union organizing campaign.  An employee who was a union supporter was ultimately discharged.  The ALJ found the employer committed a number of unfair labor practices, including the maintenance of two work rules.  On review, the NLRB panel agreed with the ALJ as to one rule and reversed as to another. 

The company’s “Team Member Guide” contained standards of conduct rules.  One rule—Rule 10—prohibited employees from engaging in “any type of conduct, which is or has the effect of being injurious, offensive, threatening, intimidating, coercing, or interfering with fellow team members or patrons.”  The ALJ found this rule to be unlawful on its face.  The NLRB panel disagreed.  The panel found this rule did not explicitly restrict activities protected by Section 7 of the Act.  Nor did the employer promulgate Rule 10 in response to union activity and it did not apply the rule to restrict the exercise of Section 7 rights.  Moreover, the underlying complaint failed to claim that the employer unlawfully enforced this rule.  The NLRB panel found that the General Counsel failed to prove that a reasonable employee reading this rule would believe it to prohibit conduct protected by Section 7.  This is because rules must be given a reasonable reading, phrases should not be read in isolation, and improper interference with employees’ rights should not be presumed.  The Board panel found that employees would understand that they were expected to comport themselves with general notions of civility and decorum in the workplace.  

Another rule—Rule 46—prohibited employees from “loitering in company premises before and after working hours.”  The General Counsel argued this rule could be read to prohibit all activity, including union and other protected concerted activities, before and after working hours on all company property and was therefore unlawful.  The ALJ noted that a rule which denies off-duty employees entry to parking lots, gates and other outside nonworking areas is normally unlawful.  In this case, the rule could be read as prohibiting, loitering in the employer’s entire property and therefore could be understood by employees to prohibit them from engaging in protected concerted activities.  The NLRB panel agreed this rule violated the Act.

In an earlier case, Lutheran Heritage Village-Livonia, 343 NLRB No. 75 (2004), another union was undertaking an organization drive.  The union filed an unfair labor practice challenging several work rules published by the employer.  The NLRB, in a 3-2 decision determined that the following rules were unlawful:

1. A prohibition against selling or soliciting anything on company property, whether the employee is on duty or off duty, unless the employee has been given written permission by the administrator.
2. A prohibition against loitering on company property without permission from the administrator.
3. A prohibition against engaging in unlawful strikes, work stoppages, slow downs or other interference with production at any facility.

On the other hand, the NLRB found the following rules did not violate the Act: 

1. A prohibition against using abusive or profane language in the presence of, or directed toward, a supervisor, an other employee, a resident, a doctor, a visitor, a member of a resident’s family or any other person on company property.
   
2. A prohibition against harassment of other employees, supervisors and any other individuals in any way.
   
3. A prohibition against verbally, mentally, or physically abusing a resident, a member of a resident’s family, a fellow employee or a supervisor under any circumstances.

The NLRB did note that in some work places the use of profane language may be commonplace. If the employer generally tolerates profanity but applies the rule when employees are engaging in protected concerted activity, disparate treatment may make the rule unlawful.

What’s the lesson of these cases?  Several large unions have recently left the AFL-CIO because they see the need to obtain new members and organize more workers. Employers should be vigilant about organizing activity in the workplace. When reviewing or updating employment policies, it is important to compare the employer’s work rules to rules which have been found lawful—or unlawful—in the labor law context, in addition to analyzing the rules under state law.

Michael Lied is a member of the Labor & Employment Group at Howard & Howard. He represents employers in a wide variety of employment, labor and immigration matters. For more information, please contact Michael Lied at (309) 672-1483 or     mrl@h2law.com.  

Copyright 2005 Howard & Howard Attorneys, P.C. This publication is intended to provide information only and does not constitute legal advice.