NLRB’s View on Employers Protecting Customer Information

Employers can prohibit the use by employees of the names, social security numbers, and credit card numbers of customers in furtherance of organizational activities. This ruling came after the NLRB scrutinized the employer’s definition of confidential information and policies covering “Use of Personal Data” and “Confidentiality and Acceptable Use of Company Systems.”

The company defined confidential information as: It could be business or marketing plans, pricing strategies, financial performance before public disclosures, pending negotiations with business partners, information about employees, documents that show social security numbers or credit card numbers – in short any information, which if known outside the Company could harm the Company or its business partners customers or employees or allow someone to benefit from having this information before it is publicly known. Just as our Company requires that its own confidential information be protected, our Company also requires that the confidential information and proprietary information of others be respected… We are all trusted to maintain the confidentiality of such information and to ensure that the confidential information, whether verbal, written, or electronic, is not disclosed except as specifically authorized. Additionally, it must be used only for the legitimate business of the Company.

The Company’s Use of Personal Data policy states: The Company has certain personal data of its present and former associates, customers, and vendors. It respects the privacy of this data and is committed to handling this data responsibly and using it only as authorized for legitimate business purposes. What is considered personal data? It is information such as names, home and office contact information, social security numbers, driver’s license numbers, account numbers, and other similar data.

The Company’s Confidentiality and Acceptable Use of Company Systems policy states: Any information that is not generally available to the public that relates to the Company or the Company’s customers, employees, vendors, contractors, service providers, Systems, etc. that you receive or which you are given access during your employment or while you are performing services for the Company is classified as “Confidential” or “Internal Use Only.”

The union challenged these polices as unlawful, asserting they would lead a “reasonable employee” to interpret them as prohibiting contact with customers during a labor dispute, something that is protected by the National Labor Relations Act.

A two-person majority of Miscimarra and the usually pro-union McFerran concluded the polices related to use of customer information were lawful because the policy “specifically defines” confidential information and the “only information covered by that rule that arguably relates to customers is social security numbers or credit card numbers.” Further, both the Use of Personal Data and Acceptable Use of Company Systems policies “limit the use or disclosure of customer names and contact information” which is information that could arguably be used in a labor dispute but that “only apply to customer names and contact information obtained from the employer’s own confidential records.” [Not shockingly, Member Pearce dissented, implicitly authorizing employees to steal credit card and social security numbers from unsuspecting customers.]

For support, the Board cited many cases holding that employees who use information taken from employer systems are outside the protection of the Act, including where the employee had forwarded hundreds of company emails, some of which included confidential data, to a personal email account.

The takeaway – tailor policies to achieve your business objectives. In this case, the definition of confidential information was very specific and narrow. The types of information under the Use of Personal Data and Use of Company Systems policies were restricted, appropriately, to information that the employer collects as part of its business.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 285-5342 or emailing him at Matt@MattAustinLaborLaw.com.

A Positively Positive Court Ruling Overruling a Positively Awful NLRB Ruling

T-Mobile had a handbook that asked employees to be professional and maintain a “positive work environment.” The NLRB found that phrase unlawful because “employees would reasonably construe the rule to restrict potentially controversial or contentious communication and discussions, including those protected by Section 7 of the [NLRA], out of fear that the [employer] would deem them to be inconsistent with a ‘positive work environment.’”

 

Thankfully, the Fifth Circuit declared that the NLRB’s ruling on the policy was “unreasonable” because any reasonable employee would understand that the rule did not prevent the employee from engaging in protected activity.

 

Of course, this is the same Fifth Circuit that invalidated the NLRB’s position that mandatory arbitration agreements are unlawful, but the NLRB continues to thumb its nose at the Court and find them unlawful. I sure hope the NLRB’s attack on handbooks policies that have nothing to do with an employee’s Section 7 rights stops once President Trump’s Board is fully seated.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 285-5342 or emailing him at Matt@MattAustinLaborLaw.com.

Difference between Employee and Non-Employee Off-Duty Access Policies

The NLRB and courts recognize that off-duty employees have greater rights than non-employees when it comes to accessing the employer’s property to engage in protected activity.

The NLRB applies a three-part test to determine if an employer’s off-duty access policy is valid under the National Labor Relations Act. An off-duty access policy is valid only if it: 1) limits access solely to the interior of the facility and other working areas; 2) is clearly disseminated to all employees; and 3) applies to off-duty employees seeking access to the facility for any purpose and not just to those engaging in union activity. In essence, employers may not maintain a rule or prohibit off-duty employees from accessing the exterior areas or other non-working areas of the employer’s premises.

The current NLRB will find that simply maintaining an overly broad off-duty access rule is unlawful. For example, off-duty employees distributed union pamphlets advocating for pay raises to other employees and customers just outside the main entrance of a store. The manager told the employees to leave, they did not leave nor were they disciplined for not leaving. The company had a long-standing policy prohibiting employees from loitering or “hanging out” around the company’s premises when off-duty. This policy prohibiting off-duty employees from hanging out in all areas of the employer’s premises was unlawful.

NLRB Chairman Miscimarra argued in his dissent that in evaluating work rules, the NLRB should place more emphasis on how a rule is actually applied compared to the more amorphous standard of how employees may “reasonably construe” a rule. Miscimarra is currently in the minority of the Board. As new Board members are appointed, the NLRB’s position on access rules and many other controversial issues may change.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 285-5342 or emailing him at Matt@MattAustinLaborLaw.com. 

“No Loitering” Policy: Unlawful says NLRB

Loiter (verb): to stand or wait around idly or without apparent purpose.

Many workplaces prohibit off-duty workers from loitering at the worksite. These policies make great sense. They decrease the likelihood of wage and hour violations by providing off-duty employees the opportunity to claim they were working, but not being paid for their work. They also decrease the risk of an off-duty employee being injured at work and thus file workers compensation claims. Most of the handbooks I have reviewed have “no loitering” policies, and my clients strictly enforce them.

Well, the NLRB recently determined that a no loitering policy at a restaurant violated the National Labor Relations Act because it prevented employees from engaging in concerted activities for the purpose of collective bargaining or other mutual aid or protection, i.e. the right to handbill.

The NLRB held that “an employer’s rule denying access to off-duty employees to all areas of its premises violates the Act unless there are legitimate business concerns to justify the rule or policy.” The Board further found that the rule was overly broad and ambiguous because it did not define “loiter” or “hang around,” and could reasonably be interpreted to prohibit employees from engaging in protected activities, such as handbilling. Also, the rule contained no exception for protected activities like handbilling (despite the Board previously ruling several times that such disclaimers do not turn an unlawful policy into a lawful policy).

To all the employers who have a similar policy in their handbook, I have included the definition of loitering at the top of this post. Copy and paste it into your handbook. Then add a (useless?) disclaimer that the policy does not cover protected activity. Time for my disclaimer: What I just said is not legal advice; your no loitering policy may still violate the NLRA even after doing what I said.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

Latest Handbook Provisions to be Invalidated by the NLRB

Union and Non-Union employers – consider this your monthly reminder to have competent labor counsel review your handbooks for compliance with the NLRB’s recent rulings about common provisions that violate the National Labor Relations Act. And for the companies that believe that the NLRB will be reined in under President Trump, well, Trump’s nominations have not yet been confirmed and even then it will take years before we see a shift in labor law back to its traditional meaning.

Real Estate firm Newmark Grubb Knight Frank’s employee handbook violated a lot of the NLRB’s newfangled definitions of labor law. Some of the violations, which were lawful for decades but now unlawful, include:

  • Getting corporate permission before posting anything about the company on social media
  • Requiring employees to “avoid activities…inconsistent with the best interests of the company and our clients.”
  • No video, audio, or images of the workplace without company permission
  • The company’s conflict of interest policy was unlawful since (as of 2015) employees could perceive union activity as conflicting with their employer’s interest
  • Preventing clothing with printed slogans / promotions
  • Prohibition on distributing written material at work
  • Not allowing employees to use certain company technology for personal use

In all, 17 policies were invalidated. While that number is staggering, it is also common for employers who have not updated their handbooks for compliance with the “new labor laws.”

Worth noting, the Company argued that the ULP was invalid because it was filed by a supervisor. Unfortunately for companies, the Judge ruled that anyone, and he meant anyone could file charges under the National Labor Relations Act.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

Will the Second Circuit Overturn the NLRB’s Surreptitious Workplace Recordings Ruling by Giving Employers a Road Map to Compliance?

Remember last year when the NLRB ruled that Whole Foods’ policy that prohibited recordings without proper authorization or the consent of the parties being recorded, was unlawful? As a reminder, Whole Foods said the purpose of the policy was to encourage open communication and to eliminate the “chilling effect” on the expression of views that may exists when an employee is concerned that his or her conversation is being secretly recorded. Conversely, the NLRB ruled that such policies have a “chilling effect” on an employee’s exercise of Section 7 rights. The Board went on to characterize covert (surreptitious) recordings as an essential element in vindicating Section 7 rights, thereby condoning and protecting that type of behavior.

Whole Foods appealed the decision to the Second Circuit. During oral argument, the judicial panel recommended adding a disclaimer to the policy that would alert employees that the policies were not intended to prohibit the recording of activities or conversations that fall within the ambit of Section 7 of the Act. Ironically, this is the precise language that management has proposed to add to several handbook policies that the Board has found unlawful. The Board has rejected the proposal every time. Could the Second Circuit finally give employers what they want by finding that disclaimer language would make an otherwise (NLRB interpreted) unlawful handbook policy lawful? Whatever the decision holds, it could have a tremendous impact on all employers, good or bad.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

President Trump’s Anticipated Effect on Workplace Policies

In 2016 the National Labor Relations Board maintained its generally pro-union, anti-employer stance in ways that affect both unionized and non-unionized employers. The Board currently has two openings, which, once President Trump fills, will result in a pro-business NLRB. However, due to the Board’s rules, employers might not see immediate improvement. After all it wasn’t until years 7 and 8 of Obama’s presidency that major pro-union initiatives were implemented. Therefore, employers in 2017 (and likely beyond) will be forced to deal with the extreme pro-union rulings from 2015 and 2016. But once the pro-business Board can start unraveling current anti-business rulings, here is what I expect will happen to workplace policies that have been in the crosshairs of the pro-union NLRB.

All employers, regardless of union status, should remain (or become) aware of the NLRB’s General Counsel’s position that many handbooks and other employer policies are unlawful. For reference, see his March, 2015 GC Memorandum 15-04. This guidance gives examples of good and bad language for policies on keeping employer information confidential (broad policies are deemed unlawful, because employees must be allowed to discuss wages and other issues of mutual interest), professionalism, media contact (employees have the right to talk to the media on their own behalf or on behalf of others), use of company logos (employees are allowed to use logos and marks for their own, non-commercial purposes), conflicts of interest, and recording and photography at work, which the General Counsel says must be permitted on non-work time when employees are engaged in protected activity. I do not expect changes to these to occur for a long time since many of the General Counsel’s theories are now supported by recent NLRB decisions.

Similarly, an employer rule prohibiting “non-approved individuals’ access to information or information resources, or any information transmitted by, received from, printed from, or stored in these resources” without prior written approval was unlawful because it would prevent employees from sharing, with their union representatives or their co-workers, information relating to work conditions stored on the information systems. See, T-Mobile USA, Inc. The Board also struck down bans on employees using information or communication resources in ways that were “disruptive, offensive, or harmful” or to “advocate, disparage, or solicit for political causes or non-company related outside organizations.”

Employers everywhere should take 2017 to audit all written policies and procedures in light of this and other recent decisions centering on language the Board finds to impose impermissible restrictions on employee sue and access to email and information systems.

Matt Austin who owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.