employee handbook

Two Big Moves By New NLRB

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National Labor Relations Board Building SignThe newly Republican-majority National Labor Relations Board (NLRB) has been busy — just yesterday  overturning two employee-friendly standards.

First, the Board overturned its decision in Browning-Ferris, which said that “indirect control” or the ability to exert such control over another company’s workers is sufficient to make a you a joint employer. With this ruling, the Board returned to its more employer-friendly joint employer standard, which looks to “direct and immediate” control.

Second, the Board reversed its aggressive position on employee handbook policies and provisions. Previously, the Board had held that a policy is illegal if employees could “reasonably construe” it to prohibit them from exercising their rights to come together (or collectively bargain) under the National Labor Relations Act (NLRA). This standard had been used by the board to find many employer policies (such as social media and confidentiality policies) illegal. However, per yesterday’s decision, the Board will instead be focusing on the “nature and extent” of a challenged policy’s “potential impact on NLRA rights” and the “legitimate justifications associated with the rule” — which together make for a far more pro-employer approach.

Employers now find themselves in a far better position when it comes to joint employer claims and handbook policy challenges. We expect to see additional employer-friendly decisions soon, so stay tuned.

What Does The Supreme Court’s Same-Sex Marriage Ruling Mean For You?

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On June 26th, in a ground-breGay_flag_svgaking decision, the Supreme Court ruled that same-sex couples have a constitutional right to marry. Full text of the Court’s decision in Obergefell, et al. v. Hodges, et al. can be found here.

But beyond the general public response, employers need to consider how the ruling will impact employment policies and practices — especially in states that previously have not recognized same-sex marriages.  Following are some of the areas where employers might see Obergefell’s impact:

Employee Benefit Plans

If you offer any employee benefit plans through a separate insurance company, all “spousal” benefits must now be extended equally to same-sex spouses as they are to opposite-sex spouses. You may not be under the same restraints if you are self-insured, but if you deny benefits to same-sex spouses in this instance, you run a high risk of discrimination lawsuits.

It’s a good time to review your employee benefit plans and the costs associated with these plans. You should anticipate that the Court’s ruling may add some new couples — and associated costs — to your plans, especially if you did not previously offer benefits to domestic partners or same-sex spouses.

Equal Employment Opportunity

Marital status is a protected class under many state and local laws. These laws now protect all married people, including those in same-sex marriages.

Family and Medical Leave Act

As we discussed in a previous post, the FMLA has recently been amended to include same-sex spouses in the definition of “spouse.” Given the heightened publicity of the Court’s ruling, be sure to review your FMLA policies and practices to ensure that same-sex spouses are included.

Additional Policies and Practices

We recommend reviewing your employee handbook and any other employment policies to make sure that the policies as written – and in practice – apply equally to employees in same-sex marriages or rely on a qualification other than marriage.

SEC Takes Aim at Confidentiality Agreements

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We – and the SEC – think it’s a good time to review your confidentiality agreements.confidentiality-agreement (2)

It’s no secret that the Securities and Exchange Commission (SEC) has had employee confidentiality agreements on its mind for some time now. In the eyes of the SEC, confidentiality agreements, if overly-broad, may prevent or discourage would-be whistleblowers.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amended the Securities Exchange Act to include protections and incentives for individuals who come forward with allegations of wrongdoing. Rule 21F-17(a) explicitly prohibits employers from taking action that would “impede” an employee from “communicating directly” with the SEC about a “possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement.”

On April 1, 2015, the SEC announced that it had settled its first enforcement action involving an overly-restrictive confidentiality provision under Rule 21F-17(a). The action primarily focused on a confidentiality statement that employees were required to sign in connection with the company’s internal investigation procedures. The statement read:

I understand that in order to protect the integrity of this review, I am prohibited from discussing any particulars regarding this interview and the subject matter discussed during the interview, without prior authorization of the Law Department. I understand that the unauthorized disclosure of information may be grounds for disciplinary action up to and including termination of employment.

The SEC determined that this statement violated the whistleblower protections under Rule 21F-17(a), even though there was no evidence that any employee was prevented or discouraged from communicating with the SEC because of the language. The company agreed to resolve the matter by: (i) paying a penalty; (ii) agreeing to cease and desist from any future violations, (iii) amending the language of the provision; and (iv) agreeing to make reasonable efforts to contact employees who had already signed the agreement to inform them that they did not need to gain permission from anyone to contact governmental agencies. The SEC approved the following amended language:

Nothing in this Confidentiality Statement prohibits me from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. I do not need the prior authorization of the Law Department to make any such reports or disclosures and I am not required to notify the company that I have made such reports or disclosures.

In light of this ruling (and the NLRB’s activity in this area that we discussed in our post yesterday), we recommend that you review all agreements containing confidentiality clauses – including employment agreements, severance agreements, employee handbooks, settlement agreements, nondisclosure agreements and any other similar agreements. If necessary, these clauses should be revised to include an express statement that nothing in the agreement discourages and/or prevents any individual from communicating with any government agency, including the SEC.

“Spring Cleaning” Item: Review Your Employee Handbook

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You may want to include a review of your employee handbook in your “spring cleaning” this year.

National Labor Relations Board Building Sign

Employee handbooks and work policies have been at the forefront of the National Labor Relations Board’s mind recently. The Board has held that a work rule may violate Section 8(a)(1) of the National Labor Relations Act if the rule has a “chilling effect” on employees’ Section 7 activity – whether it be union activity or simply discussing the terms and conditions of employment with one another. According to the Board, a work rule not only violates the Act if it explicitly restricts this protected activity, but also if it: (1) can be reasonably construed by its language to prohibit protected activity; (2) was promulgated in response to union or other protected activity; or (3) was actually applied to restrict the exercise of the protected rights.

Earlier this spring, the Board’s General Counsel issued a detailed report providing examples of unlawful policies as well as their lawful counterparts. The report discusses:

  • Confidentiality Rules
  • Rules Regarding Employee Conduct toward the Company and Supervisors
  • Rules Regulating Conduct Towards Fellow Employees
  • Rules Regarding Employee Interactions with Third Parties
  • Rules Restricting Use of Company Logos, Copyrights, and Trademarks
  • Rules Restricting Photography and Recording
  • Rules Restricting Employees from Leaving Work
  • Conflict-of-Interest Rules

The full text of the report can be found at: http://www.nlrb.gov/reports-guidance/general-counsel-memos.

In light of this report, we recommend that you carefully review all of your policies, with particular emphasis on the ones listed above.

Company Handbook Items Draw NLRB Scrutiny

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EmployeeHandbookThe National Labor Relations Board is drawing a lot attention from the media for its recent crackdowns on companies’ social media policies, but the NLRB has increasingly been scrutinizing other common policies in non-union companies’ employee handbooks.  Guidelines on keeping information confidential, being courteous in the workplace, not disparaging the company or supervisors, and resolving disputes are all under the NLRB’s microscope. The key, in the NLRB’s eyes, is whether the policy would limit employees’ right to “engage in concerted activity” (which includes everything from two employees discussing the workplace to a group of employees forming a union) or suggests that employees can’t engage in collective bargaining.  So, for instance, the NLRB has taken issue with confidentiality policies that prohibit the sharing of information regarding other employees because sharing employee information is a key step in organizing.  Similarly, the NLRB has taken action against non-union companies that prohibit employees from disparaging co-workers or the company, because employees have a right to share their grievances about the workplace.  There is no question that the NLRB is continuing to assert itself in non-union workplaces. Employers can look forward to more NLRB cases claiming that standard handbook policies violate the National Labor Relations Act.  If you haven’t recently reviewed your employee handbook and policies with an eye toward these issues, it makes sense to do so before you find yourself in the NLRB’s crosshairs.