D.C. Circuit Reminds Employers in Hyundai Decision to Steer Clear of Overbroad Work Rules and Policies

Do you want your employees to work during working hours? Do you want your employees to keep confidential information private? Do you have policies that address these issues? If so, the D.C. Circuit just sent you a reminder that such policies need to be tailored in order to avoid running afoul of employees’ rights to engage in concerted activities under Section 7 of the NLRA.

Affirming the NLRB, the D.C. Circuit held that three work rules found in Hyundai America Shipping Agency’s employee handbook were invalid because they could be reasonably be construed to restrict § 7 activity.

The first rule prohibited employees from discussing matters under investigation by Hyundai. Hyundai argued that because federal and state antidiscrimination statutes and guidelines required confidentiality in many investigations—such as sexual harassment investigations—it had a legitimate and substantial business justification for the rule, and therefore the rule should be permissible. The D.C. Circuit disagreed. While it conceded that a confidentiality rule may be permissible in the context of particular investigations or types of investigations, Hyundai had not shown that it had a legitimate reason for banning discussions of all types of investigations. Therefore, the rule was overbroad and violated the NLRA.

The second rule provided that employees should only disclose information from the company’s electronic communications systems to authorized persons. The rule applied to all information, regardless of whether the information was “confidential.” Because employees could reasonably read the rule to prevent the sharing of any information, including information about the terms and conditions of employment, it violated the NLRA.

The third rule stated that employees could be disciplined, up to and including termination, for performing activities other than company work during working hours. As with the two prior rules, the D.C. Circuit concluded that the rule was overbroad because the rule could be read to impermissibly restrict union activity during a work shift but outside of working time.

Although all three rules were undoubtedly implemented in order to meet legitimate objectives, D.C. Circuit’s decision stands as a reminder that employers need to critically examine generally applicable work rules to ensure that they cannot be read in a way that would restrict employees’ § 7 rights. If you have a question about whether your rules and policies are overbroad and how you can revise them to comply with the NLRA, contact a member of Verrill Dana’s Labor & Employment Group.