Commentary: Is the personnel manual a legal time bomb?
Posted: 12:56 am Tue, October 23, 2012
Nearly all companies issue employee handbooks or personnel manuals to their employees. There is no legal obligation to do so, but employees have come to expect them and companies find them useful tools for communicating expectations, policies and practices.
However, while employee handbooks have obvious advantages, they also can create unintended and unexpected legal liabilities. Many employers have learned this the hard way.
Some of the most recent unwelcome surprises have come from the National Labor Relations Board, a federal agency responsible for enforcing the National Labor Relations Act. In the past year, the NLRB has attacked policies and procedures found in virtually all company handbooks. It is a safe bet that all manuals contain one or more of the policies targeted by the NLRB.
Acknowledgment of at-will employment
Most handbooks contain policies that explain that employees’ employment is at will, unless that status is changed by the company’s top executive in writing. These clauses are designed to prevent a claim that some casual remark by a supervisor or manager created an expectation of long-term or permanent employment.
Frequently, the handbooks request that employees acknowledge that they understand these at-will employment policies.
Despite at-will employment policies being among the most common for employers, the NLRB’s acting general counsel has targeted them. Earlier this year, the NLRB’s Phoenix regional office issued a complaint against an employer, alleging that the following unremarkable employee acknowledgment provisions were illegal:
• “I understand my employment is ‘at-will.’”
• “I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me” and a designated company executive.
The rationale for the complaint was that employees who signed the at-will disclaimer acknowledgment would “reasonably” believe they had agreed not to take any action that could result in union representation and a collective bargaining agreement that could in turn alter the at-will relationship.
The employer in that case settled by agreeing not to maintain the acknowledgment form, and also agreed to rescind acknowledgment forms that had already been executed. But this will not be an isolated case. The NLRB has made it clear that broad at-will acknowledgments are priority targets.
Contact with the media
Many handbooks contain limits on contact with the media. The NLRB’s general counsel takes the position that employees may seek help from the press and the public through blogs, speeches and other means of communication. A blanket prohibition on contact with the media will almost certainly draw an unfair labor practice charge.
Many of the policies found unlawful by the NLRB have included provisions about communicating “confidential information.”
One policy that prohibited online discussion of “confidential guest, team member or company information” was found to violate employees’ rights, as was another policy that banned posting “confidential or proprietary” or “non-public” information.
Most employers have created an outlet for employees to express their concerns and complaints. A company’s policy that: “encouraged” employees to address concerns directly with co-workers or managers involved and not via online posts, and that expressed a preference for the use of “internal resources” was found by the NLRB to violate the National Labor Relations Act. According to the NLRB, this language is overbroad and could deter employees from seeking redress elsewhere — for example, from the NLRB or a union.
A recent NLRB decision held that a California hospital committed an unfair labor practice by maintaining and enforcing a rule that restricted off-duty employee access to the hospital, but left discretion to allow access for “hospital-related business.”
The NLRB ruled that the discretion violated the National Labor Relations Act. It held that a valid off-duty access rule must apply to all purposes, and that an employer may not pick and choose permissible reasons for off-duty access.
“No off-duty access” has to mean absolutely that, according to the NLRB.
From dress codes to bullying
Handbook sections that deal with dress codes and uniforms haven’t escaped scrutiny. The National Labor Relations Board presumes that employees may wear union insignia at work. The presumption can be overcome by showing “special circumstances,” such as maintaining a certain employee image. Any “special circumstances,” however, must be tightly defined. Blanket bans on unapproved badges, buttons and other insignia are certain to be attacked as unlawful.
On a final note, a policy requiring that employees “treat everyone with respect” and that “offensive, demeaning, abusive or inappropriate remarks are as out of place online as they are offline” was held to violate the National Labor Relations Act.
So, how can a company or firm protect itself? Be proactive rather than reactive. Review handbooks and policy manuals now for any “hot buttons.” Consider making appropriate adjustments before the NLRB — or a union — comes knocking.
Simply maintaining overbroad or discriminatory rules in a handbook, even without enforcing them, can result in unfair labor practice charges and years of costly litigation.
Wayne Landsverk is a partner of the law firm of Miller Nash LLP. His practice focuses on employment and labor relations law. Contact him at firstname.lastname@example.org. A version of this column originally appeared in Daily Journal of Commerce (Ore.), sister publication to The Daily Record.