Franchisors, Franchisees Take Note! NLRB: Beware Positive Attitudes in the Workplace…

Over the past several years the National Labor Relations Board (NLRB or Board) has taken an increasingly aggressive position against company employee handbook rules that the Board thinks may be seen by employees as restricting their union organizing and labor dispute rights under Section 7 of the National Labor Act (NLRA or Act).

Under the NLRB’s 2015 Browning-Ferris¹ ruling, franchisors may be held liable as “joint employers” for their franchisees’ NLRA violations. One of the determining factors is the degree of franchisors’ control (by conduct as well as formal agreement) over franchisees employee handbooks and personnel policies.

T-Mobile USA, Inc.

The concern about such potential joint-employer liability has been heightened by the Board’s decision in T-Mobile USA, Inc., April 29, 2016².

The Board invalidated several provisions of T-Mobile’s and its affiliate MetroPCs’ employee handbooks as violating Section 8(a)(1) of the NLRA.

The Board upheld an administrative law judge’s (ALJ) decision that a T-Mobile rule prohibiting employees from arguing with coworkers, subordinates and supervisors. The Board also held that: (i) a rule requiring employees to “treat each other with respect” violated Section 8 of the NLRA; and (ii) a policy requiring employees to “maintain a positive work environment by communicating in a manner that is conducive to effective working relationships” was vague and might discourage employees from exercising their right to organize (engage in legally protected “concerted activity”), and dispute employer labor practices under Section 7 of the Act.

T-Mobile’s argument that it’s rule was meant to promote “efficiency, productivity and cooperation” was rejected because in the Board’s view the rule was “ambiguous” – it gave no standard employees could use to determine what communications would detract from a “positive work environment”.

A T-Mobile blanket rule barring employees from making video and audio recordings was also found to violate the NLRA because the rule did not distinguish between recording discussions involving Section 7-protected matters (organizing, disputes), and did not exclude recordings made off the clock in non-work areas. T-Mobile’s arguments that prohibiting recordings was meant to protect employee privacy, confidential information, promote communication and prevent harassment were all rejected. The Board noted that the no-recordings rule was not tailored narrowly enough to protect these legitimate employer interests, and did not exclude protected Section 7 union organizing activity.

Takeaways

• Pending court challenges of NLRB employee handbook rule decisions or a change in Board membership, it is advisable for handbooks to avoid making broad statements promoting “positive” employee workplace behavior; i.e., avoid policies referring to attitude or frame of mind. Rather, unacceptable conduct should be specifically described.
• With regard to recordings, employees must be allowed to record discussions of wages and benefits under federal law.
• However, employers can for example, include handbook prohibitions against employees’ recording trade secrets in violation of state laws requiring the consent of both parties to recording.