Most workers stash away their employee handbooks in desk drawers or lockers without giving them even a cursory reading. Employers often are equally indifferent, drawing handbook policy language from standard forms and failing to update the contents on a regular basis.

But two recent cases decided by the D.C. Circuit demonstrate the legal landmines hidden in seemingly innocuous handbook policies. In both cases, the court ruled against the employers, saying the language in the policies could be interpreted as limiting the rights of employees to organize and engage in collective bargaining under Section 7 of the National Labor Relations Act (NLRA). The unions won even though neither company used the rules to hamper protected activities.

While union challenges to work rules and other employment policies aren't new, these cases–Guardsmark LLC v. NLRB and Cintas Corp. v. NLRB–attracted attention because the court found language that is commonly used in employee handbooks to be unlawful. In Guardsmark, the company included a no fraternization rule in its handbook; in Cintas, the company included a confidentiality clause.

With increasingly aggressive union organizing activity in many industries, employers can expect challenges of such handbook language to accompany an organizing effort. Unions often try to stir up employee unrest by claiming that the employer's policies illegally stifle their rights to form a union. In a worst-case scenario, the NLRB can overturn the results of an unsuccessful union election if it finds employment policies violated Section 7.

“These rules can be sitting in handbooks for extended periods of time with nobody ever making complaints about them,” says Patrick Stanton, partner in Ogletree, Deakins, Nash, Smoak & Stewart. “Where the rubber really hits the road is when the union organizing drive starts.”

Defining 'Fraternization'

Guardsmark resulted from a 2003 attempt by the Service Employees International Union (SEIU) to organize security guards who worked for Guardsmark in San Francisco. When it failed, SEIU filed an unfair labor practices case challenging three policies in Guardsmark's employee handbook.

The key court decision involved the policy that warned security guards not to “fraternize on duty or off duty, date or become overly friendly with the client's employees or with co-employees.”

The NLRB upheld the fraternization rule, but the D.C. Circuit reversed that ruling in February after consulting several dictionaries. While “fraternize” is commonly used in employee handbooks to mean dating, the court found the dictionaries all cited fraternal or brotherly relationships as the primary definition.

As a result, the court said, “We agree ?? 1/2 that employees would reasonably interpret the rule to prevent them from discussing terms and conditions of employment.” It rejected the NLRB's conclusion that employees would understand that the rule applied only to “personal entanglements.”

“Probably if Guardsmark had said what they meant about fraternization they would have been OK,” Stanton says.

The court agreed with the NLRB that two other Guardsmark policies violated Section 7. The company's “chain of command rule,” which prohibited employees from registering complaints with clients, unlawfully prevented them from discussing their working conditions, the court said. The court also found that a rule prohibiting solicitation and distribution of literature “at all times while on duty or in uniform” violated the employees' right to engage in solicitation and distribution activities while off duty. The court upheld the NLRB order requiring Guardsmark to post notices in all company locations rescinding the policy language.

“The biggest point these cases make is that employers must be vigilant that policies that seem innocuous comply with the NLRA,” says Richard Greenberg, partner in Jackson Lewis.

Confidentiality Conflicts

Another seemingly innocuous policy was at issue in Cintas. The employee handbook of Cintas, a uniform company, stated: “We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners, new business efforts, customers, accounting and financial matters.” As part of an effort to unionize Cintas workers, UNITE HERE challenged that policy.

Because “partners” is the company's term for employees, the NLRB held that the rule violated the workers' protected right to discuss the terms and conditions of their employment with each other. It ordered Cintas to either distribute handbook inserts or new handbooks to all employees with revised policy wording.

The D.C. Circuit upheld NLRB's decision in March, even though the company never used the policy to prevent activities outlined in Section 7.

“Mere maintenance of a rule likely to chill Section 7 activity” can amount to an unfair labor practice “even absent evidence of enforcement,” the court said. The company could protect confidential information without interfering with protected activity by rewording its policy, the court concluded. In fact, simply removing one word–partners–would have changed the result, Stanton says.

Alan Model, shareholder in Littler Mendelson, recalled an earlier case in which the NLRB found the wording of an employee handbook policy prohibiting employees from talking to the media about company business to be similarly overbroad and unlawful.

“The common thread running through these cases is that if there is a policy prohibiting employees from freely discussing the terms and conditions of their employment, that's when it becomes problematic,” Model says.

Proactive Review

In addition to the issues addressed in Guardsmark and Cintas, handbook policies that can trip up an employer include barring employees from the company premises before and after a shift, banning negative statements about the employer and any prohibitions against talking about salary. Currently the NLRB is considering whether restrictions on employee use of a company's e-mail system violate Section 7 rights.

A proactive review of handbook wording before a challenge is lodged can save a company the expense of defending a union challenge and the cost of posting remedial notices or distributing new handbooks.

To avoid an unfair labor practice charge, Model recommends inserting the statement, “This rule is not intended to prohibit employees from speaking with others about their terms and conditions of employment” at the end of every work rule that possibly could be interpreted as chilling employee speech or organizing efforts.

Model also says that Guardsmark demonstrates the value of using plain language when writing work rules. A policy against dating, he says, should be called what it is–”Policy Against Dating”–instead of “Fraternization Policy.”

“If you don't know what a word means, don't use it,” he says.