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D.C. Circuit Upholds NLRB Position on Illegal Handbook Policies

    Client Alerts
  • August 16, 2016

Over the past several years, the National Labor Relations Board has repeatedly declared standard employee handbook policies illegal because it considered them to violate employees’ rights to engage in protected concerted activity under Section 7 of the NLRA. These decisions have included a range of policies such as confidential business information, videotaping and recording restrictions, rules of conduct and social media policies.

In response to this change in enforcement position, many employers decided to hold off on making wholesale amendments to their policies and procedures until federal appellate courts weighed in on the NLRB’s legal position. Last month, the U.S. Court of Appeals for the D.C. Circuit affirmed the Board’s decision with regard to a corporate confidentiality agreement, signaling that federal courts might not act to temper the Board’s attacks on these employer policies.

In Quicken Loans v. NLRB, the Board challenged two employer policies. First, Quicken required employees to sign a confidentiality agreement that prohibited them from publically disclosing personnel information. Second, the employer maintained a non-disparagement rule that included public criticism of the company or management. The D.C. Circuit agreed that both policies violate Section 7 because they could be interpreted to prevent employees from acting in cooperation with others to complain about terms and conditions of employment.

Importantly, the court rejected Quicken’s argument that the policies did not violate Section 7 because the company had never interpreted or used them to try to stop concerted activity. The mere existence of the policies creates an unfair labor practice because they could deter employees from exercising their NLRA rights. This decision gives the NLRB the go ahead to continue its aggressive policing of employee policies and procedures. Employers should carefully review their handbooks and other policies and agreements to remove or modify requirements that could be interpreted as infringing upon employee Section 7 rights.