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Common Employer Work Rules Found Unlawful

Labor & Employment Law Update David B. Kern, Fred Gants, John A. Klages, Otto W. Immel

The National Labor Relations Board (the "NLRB" or the "Board") has struck down some work rules in Costco's handbook that are fairly commonplace, on the grounds that they have a tendency to discourage concerted activity and interest in unions.

The rules found unlawful prohibited employees from:

  1. Electronically posting statements that damage the employer or anyone's reputation;
  2. Unauthorized posting, removal, distribution or alteration of material on company property;
  3. Discussing employee and member private matters, including certain listed terms and conditions of employment;
  4. Sharing "sensitive information," such as payroll data, social security numbers or health information; and
  5. Disclosing "confidential information," including employees' names, addresses, phone numbers and e-addresses.

The NLRB found lawful a rule that prohibited employees from leaving company premises during work without permission.

The Board ordered Costco to rescind or change the rules it found unlawful and communicate the change to employees. The NLRB reasoned that the offensive rules were too broad, and that employees could reasonably construe them as prohibiting activities protected under Section 7 of the National Labor Relations Act.

This is the first Board decision in one of the many cases wherein the Acting NLRB General Counsel has assiduously examined employer handbooks and policy statements and issued related complaints alleging that forms of common work rules tend to chill protected employee activities. Smart employers will again review their policy statements in light of this expansive NLRB approach to enforcement of the NLRA.

The new Board decision is Costco Wholesale Corp. 358 NLRB 106 (Sept. 7, 2012).

Quarles & Brady's National Labor Relations Act Team has extensive experience in assisting employers with these issues. If you have any questions regarding the Board's recent action or your response to it, please contact David B. Kern at (414) 277-5653 /, Fred Gants at (608) 283-2618 /, John Klages at (312) 715-5060 /, Otto Immel at (239) 659-5041 / or your Quarles & Brady LLP attorney.