Blogs

Portfolio Companies Beware: Even Non-Unionized Companies Must Comply with the National Labor Relations Act

06.16.14

It comes as news to a majority of non-union employers that the National Labor Relations Act (“NLRA”) applies to them even without the barest hint of union activity. The National Labor Relations Board (“NLRB”) is targeting non-union employers and their employee handbook. Every PE firm should have its portfolio companies review their employee handbooks to eliminate any of the standard handbook provisions that the NLRB has recently challenged as violating employees’ protected rights under Section 7 of the NLRA.

To give employers a sense of the policies that the NLRB finds problematic and the concerns that they raise, below are the types of employee handbook provisions that have come under recent attack by the NLRB, along with practical tips on what employers should do to review and amend their policies to avoid NLRB scrutiny.

  1. Prohibition against discussing wage, benefits and related information. An “inappropriate conduct” provision that prevented disclosure of confidential company, customers and employee information, including confidential information maintained in an employee’s personnel files was deemed problematic because it could lead employees to believe that they could not discuss wages, benefits and other personnel information with co-workers or union representatives.
  2. Social Media. A broad provision prohibiting employees from posting certain types of information and comments on the Internet without the company’s prior approval was deemed broad enough that it could prevent employees from exercising their protected statutory rights online. Similar reasoning was applied to a communications policy that required employees, whenever they published work-related information online, to identify themselves as an employee of the company and to include a disclaimer stating, “the postings from this site are my own and do not necessarily represent the postings, strategies or opinions of [the company].” This provision was deemed overbroad in that it applied to all manner of online communications in which work-related information was discussed, including Facebook postings, and imposed a burden on employees that could prevent them from exercising protected statutory rights online.
  3. At-Will Provisions. After some consternation, at-will provisions have been deemed lawful, as long as they don’t require employees to acknowledge their at-will status as unchangeable, and consequently, that efforts to unionize would be futile. In a February 2014 memorandum to regional directors, however, the General Counsel’s Office mandated that all cases involving at-will provisions in employee handbooks must be submitted to the Division of Advice for approval unless they are otherwise resolved through advice memoranda, signaling that heightened scrutiny of such provisions may continue.
  4. Standards of Behavior Policies. A policy prohibiting “negative comments about our fellow team members” and engaging in “negativity or gossip” along with requiring employees to “represent [the employer] in the community in a positive professional manner in every opportunity” was deemed unlawful on its face.

Based on the NLRB’s recent scrutiny of previously unchallenged boilerplate employee handbook provisions, and the inconsistency in some of the various decisions in recent years, the following are practical tips to avoid NLRB scrutiny:

  • The Employee Handbook, as well as any confidentiality and non-disclosure agreements and/or company policy and memos, be reviewed for compliance.
  • If a provision is found to be problematic, be aware that the NLRB expects employers to be crystal clear when rescinding the policy. It is recommended that the employer disclaim the non-compliant language in a clear and conspicuous manner and notify the employees that the provision is being amended and why.
  • Consider drafting a savings clause that makes it clear to employees that the company has no intention of interfering with their Section 7 rights. The provision will have to be carefully drafted to address all rights protected by Section 7.
  • Social media provisions that require employees to request permission before posting online communications constitute unlawful interference, and any language that can be read to chill an employee’s discussion of wage, benefits and other work-related communications should also be carefully avoided.

The publications contained in this site do not constitute legal advice. Legal advice can only be given with knowledge of the client's specific facts. By putting these publications on our website we do not intend to create a lawyer-client relationship with the user. Materials may not reflect the most current legal developments, verdicts or settlements. This information should in no way be taken as an indication of future results.

Search Tips:

You may use the wildcard symbol (*) as a root expander.  A search for "anti*" will find not only "anti", but also "anti-trust", "antique", etc.

Entering two terms together in a search field will behave as though an "OR" is being used.  For example, entering "Antique Motorcars" as a Client Name search will find results with either word in the Client Name.

Operators

AND and OR may be used in a search.  Note: they must be capitalized, e.g., "Project AND Finance." 

The + and - sign operators may be used.  The + sign indicates that the term immediately following is required, while the - sign indicates to omit results that contain that term. E.g., "+real -estate" says results must have "real" but not "estate".

To perform an exact phrase search, surround your search phrase with quotation marks.  For example, "Project Finance".

Searches are not case sensitive.

back to top