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MACY’S, INC.: A CAUTIONARY TALE ON EMPLOYEE HANDBOOK PROVISIONS

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A few months ago, my colleague Jana Grimm wrote a blog entry outlining the latest in the NLRB’s ongoing aggressive reviews of employer rules and policies.  In her post, which can be found here, Jana outlined Memorandum GC 15-04, a memorandum from the NLRB’s general counsel providing guidance on the issue of employer handbook policies.  Citing Lutheran Heritage Village – Livonia, 343 NLRB 646 (2004), which states that work rules can violate Section 8(a)(1) of the NLRA if the rule has a chilling effect on activity protected by Section 7, GC 15-04 gives several examples of “dos” and “don’ts” of policies governing topics such as social media, confidentiality, intellectual property, and contact with individuals outside the company.

In an opinion issued on May 12, 2015, NLRB Administrative Law Judge Joel P. Biblowitz ruled that retailer Macy’s, Inc. fell into the “don’ts” with several of their policies – policies which some could consider less significant than others in the employment context (such as discipline, etc.).  Following a union charge of unfair labor practices, the NLRB general counsel (who issued GC 15-04) issued a complaint asserting that the following Macy’s policies chilled Section 7 activity:

  • confidentiality policies, prohibiting employees from disclosing information about the company or other employees, could be reasonably construed as prohibiting discussion of wages and other terms or conditions of employment;
  • personal data policy, which prohibited disclosure of “any personal information about employees, former employees, and customers” could also be reasonably construed as prohibiting the discussions of wages and other terms or conditions of employment;
  • intellectual property policy, which could be reasonably construed as prohibiting use of the Macy’s logo or trademark in leaflets, signs, or photos which would be protected in the Section 7 context; and,
  • government investigations policy, which could be reasonably construed to prohibit employees’ participation in government investigations without notifying the Company’s Human Resources or Law Departments, and was overbroad in that it could be read as to include contact with the NLRB.

The ALJ ruled that the Company’s confidentiality policies “obviously” chill employees’ Section 7 rights in speaking with each other about terms and conditions of employment, as well as notifying each other of union movement because it extended to employees’ personal contact information, including home addresses. The ALJ was especially concerned with “[t]he fact that this restriction was repeated so many times.” ALJ Biblowitz also struck the provision restricting use of “customers and vendors” information as communications with third parties affecting their employment are also protected by Section 7.

Although “not as obvious” as use of information about the company or its employees, the ALJ also struck the Macy’s policies restricting usage of its “logo or other intellectual property.” ALJ Biblowitz agreed with the NLRB general counsel that the policy could be read to extend to information distributed in connection with a union drive. He went further stating that the Company’s “well known and easily recognized” logo could be effective in publicizing a labor dispute. In the end, the ALJ could “see no valid business reason” for the rule.

ALJ Biblowitz also struck the Macy’s investigations policy, finding that it could potentially deter employees from interacting with NLRB agents regarding their wages or other terms and conditions of employment without first consulting with the employer – a practice which violates the NLRA.

Finally, employers should take special note that policies of Macy’s at issue in the case were not rescued by a “savings clause” clearly stating that the Company’s policies were not intended, nor would they be applied, to prohibit employees from exercising Section 7 rights. ALJ Biblowitz found the savings clause to be too “generic” in manner, in contrast to the specific nature of the “unlawful restrictions” of the policies. In the ALJ’s view, the Company’s reliance on the savings clause was further damaged by the fact that it was distributed seven months after the policies he found to be unlawful.

Topics such as confidentiality and intellectual property are often not the first ones that come to mind when drafting or updating an employee handbook. Macy’s, Inc. will proceed to the full Board for further review, but given the NLRB’s stance as outlined in GC 15-04, a significant change in the ruling is not particularly likely. For the time being, Macy’s, Inc. serves as a cautionary tale that employers should carefully review each and every policy, including a “savings clause” (if any), to ensure they have stayed current with the law. This is especially important given the NLRB’s aggressive focus in recent years. It is always a good idea to consult with your legal counsel when preparing or revising rules, policies, or employee handbooks.

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