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Safe Harbor Guidance from the NLRB on Employer Work Conduct Policies?

By Mark D. Nelson

These are difficult times for employers to craft lawful policies regarding employee conduct, behavior and communications. Over the past six years, the National Labor Relations Board (Board) has issued many decisions striking down employer conduct and behavior policies because they could be read by employees to prohibit them from engaging in activities that are protected by the National Labor Relations Act (Act). For example, is it unlawful for an employer to prohibit employees from engaging in conduct that is “offensive” to customers or coworkers? In a recent decision, the Board said the answer to that question is: “It depends.”

In Valley Health System LLC, 363 NLRB No. 178 (May 6, 2016), the following statement in the employee handbook was alleged to be unlawful:

Certain rules and regulations regarding employee behavior are necessary for the efficient operation of the System and the Facility and for the benefit and protection of the rights and safety of all. Conduct that interferes with System or Facility operations, brings discredit on the System or Facility, or is offensive to patients or fellow employees will not be tolerated. 

The issue in this case was whether employees would read the rule to prohibit permissible conduct under the Act, such as discussions of unionization, wages, and working conditions with other employees.

The Administrative Law Judge (ALJ) found that the ban on conduct that “brings discredit on the System or Facility” was overbroad, and the Board agreed. The ALJ ruled that the bar on “offensive” conduct was not unlawful, but the Board disagreed. The Board stated that whether the ban on “offensive” conduct is unlawful requires an evaluation of the context in which the word it used. According to the Board, “the rule’s restriction on conduct that is ‘offensive’…appears in the same sentence as, and immediately follows, the [illegal] prohibition on conduct that ‘brings discredit on the System or Facility,’” and the ‘discredit’ phrase is impermissibly overbroad.

The Board cited its decision in Palms Hotel & Casino, 344 NLRB 1363 (2005) in which it approved the employer’s ban on “offensive” conduct.  In that case, the rule was “clearly directed at egregious and unprotected misconduct—it prohibited conduct that is ‘injurious, offensive, threatening, intimidating, coercing, or interfering with’” employees or patrons. Some could argue that these adjectives individually could be found unlawful as “offensive” was in the instant case. The take-away from Valley Health System may well be that an employer can ban conduct or behavior that is “injurious, offensive, threatening, intimidating, coercing, or interfering with” customers or coworkers, but other limitations in other contexts may violate the Act. Is the Palms Hotel work rule a safe harbor for employers’ conduct and behavior policies? Time will tell.