NLRB Advice Memoranda, Coastal Industries, Inc. d/b/a Coastal Shower Doors, National Labor Relations Board, (Aug 30, 2018)

The Region submitted this Section 8(a)(1) case for advice as to whether various Employer rules and policies are lawful under The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017) (“Boeing”).

We conclude that one of the Employer's confidentiality rules, parts of its social media policy, and its cell phone rule are unlawful Category 2 rules, but that the rest of the rules are lawful.

Coastal Industries, Inc. d/b/a Coastal Shower Doors (the “Employer”) is a shower door manufacturer based in Jacksonville, Florida. On June 1, 2014, the Employer promulgated, and still currently maintains, an employee handbook with several rules that the Charging Party alleges are unlawfully overbroad. [1] Specifically, the Employer maintains rules regulating Conduct and Behavior that require employees to refrain from certain inappropriate behavior, including “un-businesslike conduct,” “creating discord,” “obtaining unauthorized confidential information,” and soliciting not “in good taste.” In addition, the Employer maintains a confidentiality policy that states that all information “retained or generated” by the Employer is confidential, and an electronic assets policy that forbids “disparaging” language. The Employer also maintains a social media policy that bans connecting to social media on the Employer's electronics, bans posting “derogatory information,” and bans handing out the Employer's telephone number. Finally, the Employer maintains a cell phone policy that bans all use of cell phones during “working hours.”

We conclude that the conduct, solicitation, electronic assets, and email policies are lawful Category 1 rules. We further conclude that the Employer's confidentiality and cell phone policies are unlawful Category 2 rules. Finally, we conclude that the Employer's social media policy is partially lawful and unlawful.

I. The Boeing Standard for Determining Whether a Work Rule is Facially Lawful

In cases where a facially neutral work rule, if reasonably interpreted, would potentially interfere with Section 7 rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on Section 7 rights, and (ii) legitimate business justifications associated with the requirement(s). [2] The Board will conduct this evaluation “consistent with the Board's ‘duty to strike the proper balance between … asserted business justifications and the invasion of employee rights in light of the Act and its policy,’ focusing on the perspective of employees.” [3] In so doing, “the Board may differentiate among different types of NLRA-protected activities (some of which might be deemed central to the Act and others more peripheral),” and make “reasonable distinctions between or among different industries and work settings.” [4] The Board will also account for particular events that might shed light on the purpose served by the rule or the impact of its maintenance on Section 7 rights. [5]

The Board also indicated that its balancing test will ultimately result in its ability to classify the various types of employer rules into three categories, thereby eliminating the need to conduct case-specific balancing as to certain types of rules so as to provide employers, employees, and unions with greater certainty in the future. The Board described the following categories:

• Category 1 will include rules that the Board designates as lawful to maintain, either because: (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of Section 7 rights and thus no balancing of rights and justifications is required; or (ii) even though the rule has a reasonable tendency to interfere with Section 7 rights, the potential adverse impact on those protected rights is outweighed by employer justifications associated with the rule. The Board included in this category rules requiring “harmonious relationships” in the workplace, rules requiring employees to uphold basic standards of “civility,” and rules prohibiting cameras in the workplace.

• Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule, when reasonably interpreted, would prohibit or interfere with the exercise of Section 7 rights, and if so, whether any adverse impact on protected conduct is outweighed by legitimate business justifications.

• Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit Section 7 conduct, and the adverse impact on Section 7 rights is not outweighed by justifications associated with the rule. The Board included as an example of a Category 3 rule one that prohibits employees from discussing wages and benefits with each other. [6]

The Board specified that these categories represent the results of the new balancing test, but are not part of the test itself. [7]

II. The Lawfulness of Various Provisions of the Employer's Employee Handbook Under the Boeing Standard

The Employer's handbook includes various rules in the category of “Conduct and Behavior.” The introduction to this category states that “The Company views the following as inappropriate behavior:”

A. “Obtaining unauthorized confidential information pertaining to clients or employees.”

We conclude that this is a lawful rule. Rules prohibiting disclosure of customer information should be considered Category 1 rules. [8] Thus, the first part of this rule raises no issues. As for the ban on obtaining information regarding “employees,” confidentiality rules that encompass employee information should be considered Category 2 rules, [9] and such rules should be found unlawful where the impact on Section 7 rights outweighs the employer's legitimate business justification for the rule. However, context is important in determining where a rule would reasonably be read as prohibiting protected activities. We conclude that the general prohibition in this rule regarding “obtaining unauthorized confidential information pertaining to … employees” is lawful.

Employees would not reasonably read this confidentiality rule as prohibiting them from disclosing information about their wages and working conditions to their co-workers or a union. The rule does not define “unauthorized confidential information” in a way that would suggest the inclusion of terms and conditions of employment, and employees are unlikely to interpret “obtaining unauthorized confidential information” as asking coworkers about their wages. In context, a more reasonable understanding of the rule is as a ban on unauthorized access of confidential information held by the Employer, that is, of records and files. Employees do not have a right under the Act to disclose employee information obtained from unauthorized access or use of confidential records, or to remove records from the employer's premises. [10] Accordingly, where a rule, as here, is about accessing or obtaining confidential employee records, the rule will not affect Section 7 rights.

B. “Rude, discourteous or unbusinesslike behavior; creating a disturbance on Company premises or creating discord with clients or fellow employees.”

We conclude that the first part of this rule is a lawful civility policy, and that the second part of this rule is a lawful disruptive behavior policy, both of which should fall under Category 1. As for the first part of the rule, the Board made clear in Boeing that employers may maintain rules requiring “harmonious relationships” in the workplace and requiring employees to uphold basic standards of “civility.” [11] In so holding, the Board noted that any adverse effect on Section 7 rights would be comparatively slight since a broad range of activities protected by the NLRA are consistent with basic standards of harmony and civility. [12] The Board incorporated by reference the civility rules at issue in William Beaumont Hospital and Member Miscimarra's dissent arguing for their legality, in which he reasoned that the vast majority of conduct covered by such rules does not implicate Section 7 at all. [13] While protected concerted activity may involve criticism of fellow employees or supervisors, the requirement that such criticism remain civil does not unduly burden the core right to criticize. Instead, it burdens the peripheral Section 7 right of criticizing other employees in a demeaning or inappropriate manner.

In contrast to the minimal impact that these types of civility rules have on Section 7 rights, employers have significant business interests in maintaining such rules. These interests include an employer's legal responsibility to maintain a workplace free of unlawful harassment, its substantial interest in preventing violence, and its interest in avoiding unnecessary conflict or a toxic work environment that could interfere with productivity. [14] Thus the civility portion of the rule is a lawful Category 1 rule.

As for the second part of the rule, as explained in GC Memorandum 18-04, disruptive behavior rules are usually lawful. [15] The majority of conduct covered by this rule is unprotected roughhousing, fighting, dangerous activities, or other bad behavior, and employees would correctly interpret the rule as covering such issues. Thus, employees will usually not interpret such rules as applying to Section 7 activity, and the rule should fall under Category 1. [16] To the extent that employees might view this rule as applying to protected concerted activity, any chill created would be marginal at best; the kinds of “disruptive” protected activities that an employee might conceivably believe are covered by the rule are activities that employees know are counter to the Employer's interests and are willing to do anyway, e.g., protests and strikes. Moreover, any marginal chill created by a no disruption rule is outweighed by the Employer's substantial interest in safety and productivity. Thus, the rule is lawful.

C. “Soliciting, collecting money, or distributing bills or pamphlets on Company property by employees during non-working time, including rest and meal periods, is not restricted so long as such activity is in good taste.”

We conclude that this is a lawful solicitation/distribution policy. The policy's limitation of solicitation and distribution to non-working time is clearly lawful. However, as the Region notes, “good taste” is an undefined content-based restriction on employee solicitation and distribution that might chill protected concerted solicitation and distribution, given that only the Employer knows what is in “good taste.”

We find that Boeing is the appropriate standard to assess this potentially chilling rule, even though the rule is encompassed within a solicitation/distribution policy. Traditional solicitation/distribution cases usually deal with rules that restrict the place, timing, means, and method of solicitation and distribution. [17] Such rules are treated as explicit restrictions on Section 7 activity, [18] where ambiguity in the rule is construed against the drafter. [19] The Boeing decision did not alter the balance between employee rights and employer business interests in determining the extent an employer may explicitly restrict solicitation and distribution. [20] Rather, the Board in Boeing instated a new standard for assessing when facially neutral rules are unlawful, that is, rules that do not explicitly address Section 7 activity. Ambiguity in such rules is not construed against the drafter, but rather is examined to determine whether employees reasonably would interpret the rule as forbidding protected conduct, regardless of whether there is a second, less-reasonable meaning. [21]

While prior to Lutheran Heritage the Board treated ambiguous content-based restrictions on solicitation/distribution similarly to place and time restrictions, [22] after Lutheran Heritage issued, the Board applied that standard to potentially chilling rules, even if those rules related to a solicitation/distribution policy. In Target Corp., e.g., the Board applied Lutheran Heritage to find that a policy that banned solicitation and distribution for “personal profit” or “commercial purposes” was unlawfully overbroad. [23] In Conagra Foods, Inc., the Board applied Lutheran Heritage to a notice that “discussions about unions” were governed by the employer's solicitation policy, which lawfully banned solicitation during working time. The Board held the notice was unlawfully overbroad, since employees could reasonably understand the notice as banning discussions about unions during working time, not just solicitation. [24] Essentially, the Board treated such provisions as facially neutral aspects of rules that explicitly dealt with Section 7 activity.

We conclude that the Board in Boeing similarly intended the new standard to apply to all cases where the lawfulness of a no-solicitation rule depends on its “chilling” impact rather than on the extent of its place/time/method restrictions. Indeed, it would be inconsistent to apply Boeing to a rule requiring emails or behavior be in “good taste” but apply a different standard simply because such a good taste requirement is included in a solicitation/distribution rule.

We next conclude that requiring that solicitation and distribution be in “good taste” is not unlawful under Boeing. Merriam-Webster defines “good taste” as “proper and acceptable.” [25] The Collins English Dictionary states that “if you say that something is in good taste, you mean that it is not offensive and that it is appropriate for the situation.” [26] The Oxford English Dictionary defines “good taste” as having “[g]ood or discerning judgment, especially with regard to what is aesthetically pleasing, fashionable, polite, or socially appropriate.” [27] This rule is thus similar to the civility rules considered in William Beaumont Hospital that were incorporated by reference in Boeing. [28] Those rules banned “inappropriate” or “socially unacceptable” behavior, and there is little reason to distinguish those rules from one demanding good taste. Much like civility rules, the “good taste” requirement here only burdens the peripheral Section 7 right to solicit or distribute in bad taste. Given that an employer's duty to prevent harassment or a toxic work environment applies to all employee conduct at work, including at-work solicitation and distribution, the Employer's legitimate business interest outweighs the peripheral Section 7 rights affected. Accordingly, we conclude that the “good taste” requirement in the Employer's solicitation/distribution policy is lawful.

D. “Un-business-like conduct, on or off Company premises, which adversely affects the Company services, property, reputation or goodwill in the community, or interferes with work.”

We conclude that this rule is lawful. The policy comprises two different rules, an on-duty conduct policy and an off-duty (off-premises) conduct policy. The General Counsel has concluded that on-duty conduct policies generally fall in Category 1. The vast majority of activity covered by such a rule is unprotected, and employees would not reasonably interpret the rule to cover protected concerted activity. Thus, the rule would have little, if any, impact on Section 7 rights. [29] And, even if there were some ambiguity about what on-duty conduct might fall within the meaning of “adversely affects” in this policy, on balance, the Employer's interests in maintaining discipline and production outweigh any chilling effect of this part of the provision. Employers have a significant interest in maintaining productivity and ensuring that an employee's conduct does not affect his or her job performance or others' job performance. [30]

However, the General Counsel has placed rules regarding off-duty conduct that may adversely affect the employer in Category 2. [31] That is because such rules, depending on how they are phrased and their surrounding context, can be read either as forbidding unlawful or immoral off-duty behavior or as forbidding protected concerted activity, such as a protest or strike, that is contrary to the employer's interests. Parsing the difference depends on what kinds of conduct are forbidden by the rule. If all conduct that may be detrimental to the employer is forbidden, such a rule might reasonably be read as including much core protected concerted activity. [32] Conversely, even prior to Boeing, the Board generally found off-duty conduct rules lawful where they specified they were directed not at all conduct adverse to the employer, but only at unlawful behavior or “misconduct.” [33]

Here, the rule would not reasonably be interpreted as covering Section 7 activity, and even if it did, the balance of interests weighs in the rule's favor. The Employer's rule specifies that only “un-business-like” off-duty conduct is encompassed by the policy. Merriam-Webster defines “unbusinesslike” as “lacking the qualities (such as polite seriousness and professionalism) considered appropriate for business or a businessperson.” [34] The Oxford English Dictionary says it means not “carrying out tasks efficiently without wasting time or being distracted by personal or other concerns; [not] systematic and practical.” [35] While “un-business-like conduct” is arguably less serious than “misconduct,” they are on the same spectrum of behavior, along with “inappropriate” or “offensive” conduct. [36] Accordingly, the General Counsel placed civility rules that ban “unbusinesslike behavior” into Category 1. [37] There is no reason to believe that employees are any more likely to interpret “un-business-like” as encompassing Section 7 activity in an off-duty conduct rule than they would in an on-duty conduct rule. Most activity covered by the term is unprotected, and most employees would understand the purpose of the rule as to prevent off-duty bad behavior from affecting the employer's business reputation or workplace. They are especially likely to do so here, where elsewhere in the Code of Conduct the Employer's policy groups “unbusinesslike” behavior with “rude” and “discourteous” behavior. [38] And while an employer's legitimate business interest in regulating its employees' off-duty conduct is less significant than its interest in regulating on-duty conduct, employers do have a significant interest in ensuring that off-duty employee conduct neither harms the company's reputation nor creates problems that continue once employees are back on duty. Firms are often judged by the conduct of their employees, and when an employee engages in unlawful or inappropriate activity off duty, it can cause damage to a company's reputation and brand. Employers also have an interest in ensuring that off-duty social dynamics and off-duty recreation do not cause trouble in the workplace or render employees unfit to work. Thus, we conclude that the off-duty conduct rule here is a lawful Category 2 rule.

E. “… all information gathered by, retained or generated by the Company is confidential. There shall be no disclosure of any confidential information to anyone outside the Company without the appropriate authorization…. nothing in this policy is intended to infringe upon employee rights under Section Seven (7) of the National Labor Relations Act (NLRA).”

We conclude that this rule is unlawfully overbroad under Boeing. While the rule does not explicitly target wages and working conditions, the rule's definition of confidential information is so broad as to easily be interpreted to include such information. [39] Employee wage rates, employment policies, handbook rules, and virtually all other terms and conditions of employment are information that is “generated” and “retained” by the Employer. Moreover, a confidentiality rule encompassing such information strikes at core Section 7 rights. Discussions and coordination among employees, or between employees and unions, regarding terms and conditions of employment and employment-related disputes is a central aspect of protected concerted activity under the NLRA. This includes discussing the names and contact information of other employees with coworkers or union representatives. [40] As Chairman Miscimarra noted about a slightly different rule in Schwan's Home Service, it is hard to fathom how any Section 7 activity could be conducted without employees disclosing or discussing “company business” in some manner. [41]

While the rule includes a “savings clause,” it is not sufficient to render the rule lawful. Although the Board has stated that an express notice to employees advising them of their NLRA rights “may, in certain circumstances, clarify the scope of an otherwise ambiguous and unlawful rule,” [42] the savings clause included here does not in any way indicate that employees have the right to discuss wages or working conditions. Employees do not necessarily know what their rights are under the NLRA, and the only contextual clue provided by this rule is that their NLRA rights may have something to do with confidential information. Thus, the Employer's confidentiality rule is an unlawful Category 2 rule.

F. “Disparaging, abusive, profane, or offensive language (materials that would adversely or negatively reflect upon the Company or be contrary to the Company best interests) and any illegal activities—including piracy, cracking, extortion, blackmail, copyright infringement, and unauthorized access to any computers on the Internet or email—are forbidden.”

We conclude that this rule is a combination of civility policies and on-duty misconduct policies, and is thus a lawful Category 1 rule, as discussed supra.

The following rules are encompassed by the Employer's Social Media policy. The policy also includes a disclaimer that “[N]othing in this policy is intended to infringe upon employee rights under Section Seven (7) of the National Labor Relations Act.” The rules are:

G. “Company electronic assets may not be used to access these [social media] accounts.”

We conclude that this rule is not unlawful under Purple Communications. [43] In that case, the Board held only that employees who have rightful access to their employer's email system in the course of their work have a right to use that system to engage in Section 7-protected communications during nonworking time. Purple Communications did not deal with social media accounts. The General Counsel does not agree with extending the Board's holding in Purple Communications regarding email to other electronic communications systems. Accordingly, the Region should not allege this rule as unlawful.

H. “Employees should refrain from posting derogatory information about the Company on any such sites and proceed with any grievances or complaints through the normal channels.”

We conclude that this rule is unlawfully overbroad under Boeing. A rule prohibiting disparagement of the employer has a significant impact on NLRA rights. Concerted criticism of an employer's employment and compensation practices is central to rights guaranteed by the NLRA. [44] A general rule against disparaging the company on social media, absent limiting context or language, would cause employees to refrain from publicly criticizing employment problems on social media. [45] Such criticism is often the seed that becomes protected concerted activity for improving working conditions, the core of Section 7.

Although an employer may be understandably wary of reputational damage that can occur when criticized by its own employees, such an interest does not outweigh the core NLRA rights undermined by a broad ban on criticism or disparagement of the employer. [46] And, rules against disparaging the employer do not implicate the same civility and anti-harassment interests involved in rules against disparaging coworkers. [47]

Since this rule is an absolute ban on employees making any comments on social media disparaging the Employer, and is not limited to prohibiting disparagement of the Employer's products or services, the provision would have a significant impact on online protected concerted activity that is not outweighed by any legitimate interests of the Employer. [48] Therefore, this rule should be treated as an unlawful Category 2 rule. [49]

In addition, the requirement that employees take their grievances to the Employer is an independent violation of the Act. The Board has found that requiring employees to first take work-related complaints to management “tends to inhibit employees from banding tougher …. Faced with such a requirement, some employees may never invoke the right to act in concert with other employees or to seek the assistance of a union, because they are unwilling first to run the risk of confronting the [employer] on an individual basis.” [50] There is no legitimate business interest in preventing employees from discussing grievances among themselves, or with a union or other third parties, before going to management.

Moreover, the Social Media Policy's NLRA disclaimer does not save this rule. There is little ambiguity in the requirements to not disparage the Employer and to bring any grievances to the Employer, and the disclaimer does nothing to change either of their meanings. Accordingly, the Region should issue complaint, absent settlement, alleging this provision is unlawful.

I. “Employees may not post any statements, photographs, video, or audio that reasonably could be viewed as disparaging to employees.”

We conclude that this rule is a lawful Category 1 civility rule. As discussed supra, the Board made clear that an employer may maintain rules demanding civility from its employees. [51] This includes not disparaging fellow employees. [52] There is thus a distinction between rules restricting what employees can say about their coworkers (i.e., disparaging other employees), which has little impact on Section 7 activity, and rules restricting what employees can say about their employer (i.e. disparaging the owners). [53] Accordingly, the Region should not include this allegation in its complaint.

J. “Employees may not post to any on-line forums … providing any Company telephone number or extension. Do not create a link from any personal blog, website or other social networking site to a Company website without identifying oneself as an employee of the Company.”

There are two aspects of this rule, one lawful and one unlawful. We conclude that the ban on providing the Employer's telephone number is unlawful. Employees have a right under Section 7 to concertedly communicate their workplace complaints to the public, customers, and others. [54] By forbidding employees from using the Employer's telephone number, the Employer is effectively banning employees from soliciting customers and/or the public to call the Employer to express support for the Employer's Section 7 activities. Moreover, given that the Employer's telephone number is publicly available on its website, the Employer has failed to provide a legitimate business interest supported by such a rule. Accordingly, we conclude that this portion of the rule is unlawful.

However, we conclude that the self-identification requirement is lawful. Employers have a significant interest in requiring that only authorized individuals speak for the company. [55] Therefore, employers may have rules ensuring that employees do not, intentionally or unintentionally, make statements that can be interpreted as coming from the company. The rule here appears to be in support of a similar goal – it is aimed at employees linking to the company website in a way that would make people think the employee was a disinterested third party. The Employer is not requiring that employees use specific words for the disclaimer, only that they make it clear when linking to the Employer's website that they work for the Employer. Therefore, any burden that the disclaimer requirement may have on Section 7 activity is minimal and is outweighed by the Employer's business interests.

Finally, the Employer's handbook includes the following Personal Cell Phones or Other Mobile Devices policy:

K. “The use of personal cell phones or other mobile devices is prohibited during working hours for personal use, including phone calls, texting and downloading of web content.”

We conclude that this is an unlawful Category 2 rule. The Board in Boeing held that cell phone bans belong in Category 1 (although the Board there was focused on the camera aspect of cell phones and not the communication aspect). However, this rule does not completely ban cell phones, as in Boeing, but only bans cell phone use during “working hours.” Also, the rule appears to be directed at only the communication aspect of cell phones; it prohibits “phone calls, texting and downloading of web content” and says nothing about use of the phone for photography or recording. In these circumstances, we conclude that this is a Category 2 rule. We also conclude that this rule should be found unlawful. Employees have a right to engage in Section 7 communications during non-work times, e.g., break times and lunch, and they would reasonably read this rule to prohibit cell phone use during those times. [56] Therefore, absent an employer business justification that outweighs the interference with Section 7 rights, the rule should be found unlawful. The Employer has not provided any business justification for this rule.

Based on the foregoing, the Region should proceed as directed.

/s/

J.L.S.

ADV.12-CA-194162.Response.CoastalIndus.