The NLRB Sets its Sights on Hooters

By: Jennifer Ward and Behnam Salehi

Over the past two years, The National Labor Relations Board ("NLRB") has shown an ever increasing interest in employer handbooks and workplace policies. In doing so, the NLRB has heavy-handedly struck down the employee handbooks and policies of the biggest employers in the country, including Boeing, General Motors, and Target. Most recently, the NLRB set its sights on an imaginable culprit - Hooters.

By way of background, the NLRB has power to enforce the National Labor Relations Act ("Act"). Under Section 7 of the Act, employees have a right to organize and engage in "concerted activity," which applies to both union and nonunion workplaces. This includes employee discussions about workplace conditions, safety, and compensation. Any employer policy which explicitly prohibits "concerted activity" will be found unlawful. Recently, the NLRB has aggressively prosecuted employers with policies which an employee could reasonably construe as prohibiting their Section 7 rights. The NLRB has found that language which is either ambiguous or overbroad violates the Act if a reasonable reading of it chills exercise of Section 7 rights.

Last month, the NLRB ruled that a Hooters franchise located in California had unlawful and overbroad language in its employee handbook. The NLRB found nine of its employee policies violated the Act, including policies that generally prohibited "insubordination by employees," "disrespect to guests," "negative comments or actions," "unauthorized dispersal of sensitive Company materials," and "off-duty conduct which negatives affects ... the employee's ability to perform his or her job." In these examples, the NLRB found that the way these policies were articulated could encompass a variety of conduct, which could include rights protected under Section 7.

So how can an employer balance the need for protective policies against employees' rights under Section 7? Employers need to proceed with caution and draft policies that specify the restrictions on the employee's conduct. The NLRB's analysis on the "insubordination by employees" policy is particularly instructive. Hooters' policy prohibited:

"Insubordination to a manager or lack of respect and cooperation with fellow employees or guests [might result in discipline up to, and including immediate termination.]"

The NLRB found that the above policy was overly broad because it prohibited all disrespectful conduct and did not define "insubordination" or "cooperation." This ambiguity as well as the overly broad nature of the terminology, the NLRB held, could have a chilling effect on employees in their exercise of Section 7 rights. However, the NLRB also provided a contrasting example (from a prior ruling in Lafayette Park Hotel) of a lawful policy which prohibited employees from:

"[b]eing uncooperative with supervisors, employees, guest[s] and/or regulatory agencies or otherwise engaging in conduct that does not support the Lafayette Park Hotel's goals and objectives."

What is the difference between the two policies? The NLRB found that the above policy was not ambiguous or overly broad because it limited prohibited conduct that did not support the company's "goals and objectives." The Court found the Hooters policy contained no such limiting terms and was therefore unlawful. Still not clear? You're not alone.

Despite the NLRB occasional attempt at clarifying its guidance on maintaining lawful employee policies, many employers continue to struggle with articulating the proper language. We will continue to monitor the NLRB's rulings on this issue and provide more specific guidance as this area evolves. For now, it is important to avoid overly broad or ambiguous language. Instead employers must provide clearly articulated policies with specific examples of prohibited conduct that do not restrict or chill employee's exercise of Section 7 rights.


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