Employee Handbooks Must be Carefully Written

Last updated on May 13th, 2019 at 02:35 pm

Non-union employers typically issue employee handbooks, and these policy manuals serve a valuable purpose. However, non-union employers often are not aware that inappropriate or overbroad language in their handbooks can create labor troubles for them. Two recent decisions, one from the Federal Court of Appeals in Chicago and the other from the National Labor Relations Board (which interprets and enforces the National Labor Relations Act), illustrate the dangers in this area.

In Cintas Corp., 344 NLRB No. 118 (2005), the company, which referred to its employees as "partners," issued a Partner Reference Guide, stressing, among other things, the importance of maintaining confidentiality. One portion of the guide stated: "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."

Another provision stated that violating a confidence or releasing confidential information could lead to discipline.

In response to an unfair labor practice charge filed against the company, the NLRB held that the confidentiality provision of the handbook was overbroad, and therefore violated employee rights under the NLRA. In the board’s view, employees could reasonably interpret the confidentiality rule as restricting their right to discuss their own wages and terms of employment.

The rule broadly prohibited the release of "any information" regarding the company’s "partners" and could, therefore, be read to restrict discussions of wages and other terms and conditions of employment, which are protected rights of employees under the NLRA. After incurring the expense of defending an NLRB trial, the company was ordered to republish its handbook without the illegal provision, or provide correcting language to be inserted in existing handbooks.

A similar problem arose in connection with a handbook in Brandeis Machinery & Supply Co. v. NLRB, 412 F.3d 822 (7th Cir. 2005). In that case, the company maintained a handbook, which described its employee relations philosophy as follows:

"We, as a company, prefer to deal with people directly rather than through a third party. This is a non-union organization. It always has been, and it is certainly our desire that it always will be that way… You have a right to join and belong to a union, and you have an equal right NOT to join and belong to a union. If any other employee should interfere or try to coerce you into signing a union authorization card, please report it to your supervisor, and we will see that the harassment is stopped immediately."

After the company faced a union organizing campaign, an unfair labor practice charge was filed against the company, alleging, among other things, that the handbook provision was a violation of the Act. Both the NLRB and the Court of Appeals for the Seventh Circuit agreed. As the Seventh Circuit noted, one of the rights secured to employees under the NLRA is the right to solicit on behalf of a union. The court noted that union proponents may persist in this solicitation even if it annoys or disturbs employees who are being solicited.

In the court’s view, the company’s handbook interfered with employee rights under the Act. It noted that context was important: this particular policy was located in a section reflecting the company’s union-free philosophy, and it was not part of a more general anti-harassment policy.

Second, and perhaps more importantly, the focus of the prohibition against "harassment" was pro-union activity; there was no acknowledgment that opponents of a union might also harass, interfere or coerce fellow employees inappropriately. Therefore, in the court’s view, the company’s handbook policy could lead employees to conclude that engaging in pro-union activity was tantamount to "harassment," which was prohibited under the policy. The court upheld the NLRB’s ruling that simply maintaining the offending language in the handbook constituted a violation of the Act.

These decisions serve to underscore the care that must be taken when drafting employee handbooks in the non-union context. The board has long held that employers cannot interfere with or prohibit employee solicitation during break times and other non-work times on the employer’s premises.

Similarly, employers cannot prohibit employees from discussing their own wage information or information regarding discipline they may have received, and cannot single out union supporters for discipline when similar anti-union behavior is ignored.

The underlying theory of these rules is that to prohibit such discussions and activities could chill employees in their ability to engage in protected concerted activity under the Act. Vague or overbroad handbook clauses can create unintentional violations of these legal principles.

David Kern is a partner in the Milwaukee office of Quarles & Brady LLP and chairs the firm’s national Labor and Employment Section.

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