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The Bargaining Table

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During the Obama administration, the National Labor Relations Board (NLRB or the Board) stringently reviewed employee handbooks of nonunionized employers to determine whether particular policies infringed on employees’ rights to engage in concerted activity protected by Section 7 of the National Labor Relations Act (NLRA or the Act). While the Trump Board relaxed such scrutiny, the Biden Board has returned to the approach taken Obama era with a vengeance. A recent decision from an administrative law judge (ALJ) for the Board highlights the NLRB’s aggressive stance of invalidating employers’ workplace rules if they result in any potential infringement on an employee’s concerted activity.

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Starbucks Corp. v. Workers United, Case 28-CA-289622, slip op. (ALJ June 7, 2024), arises out of a union’s attempt to organize Starbucks employees and the company’s termination of several employees and other alleged unfair labor practices occurring at several Phoenix-area stores in order to curb union activity. Specifically, Starbucks was alleged to have violated Section 8(a)(1) of the Act through its maintenance of 33 overly broad rules. In finding against Starbucks, the ALJ focused heavily on Starbucks’ Partner Guide (the employee handbook), Store Operations Manual, Mutual Arbitration Agreement and other workplace rules.

Analysis of Workplace Rules

The ALJ analyzed the Partner Guide and found that 13 of its provisions violated Section 8(a)(1) of the NLRA. For example, the ALJ found that the Partner Guide’s “Respectful Workplace” provision violated the Act in light of the language mandating employees to “[r]efrain from any conduct that could be construed as discrimination, harassment, bullying or retaliation.” The provision also urged employees to “[d]raw early attention to unwelcome or offensive conduct by informing the offending person to stop, if comfortable doing so.” The ALJ concluded that a reasonable employee could interpret these rules as infringing on Section 7 rights because terms like “harassment,” “unwelcome” and “offensive” were not defined. To emphasize these concerns, the ALJ stated that “[a]n employee who has strong personal antiunion sentiment may very well view attempts to organize as offensive to their views.” The ALJ also stated that the requirement to report violations of this provision to management, and the provision’s distinct placement within the handbook, contributed to its invalidity.

The ALJ made similar holdings invalidating other handbook provisions. For example, the language in Starbucks’ shirt provision was found to be overly broad because it prohibited all logos other than a small manufacturer’s logo, which consequently prohibited union insignia. The ALJ also found that the personal telephone calls provision could have been drawn more narrowly “to prohibit personal calls only in work areas.” And the social media policy provision could have been drawn more narrowly “to separate out personal protected activities . . . from corporate speech.” Ultimately, the ALJ found that in addition to the 13 provisions of the Partner Guide, five other workplace rules violated Section 8(a)(1).

Individual Store Violations

The ALJ proceeded to discuss how certain stores in the Phoenix area violated the NLRA by suppressing concerted activities. The ALJ found that the Scottsdale &amp; Mayo Store reacted with animus to union activities and only started disciplining employees for infractions after finding out about their union activities. The ALJ claimed that many of the infractions the Scottsdale &amp; Mayo Store used as a basis for termination or discipline were of rules that, previously, were rarely enforced, or never enforced to this extent. Furthermore, the ALJ found that the Indian School &amp; 107th Store manager extensively questioned her employees’ motivations for seeking union representation and expressed that she felt hurt by their requests for union representation. The ALJ determined these actions would chill the concerted activity of a reasonable employee and consequently violated the NLRA. The ALJ also held that the Indian School &amp; 107th Store violated the NLRA by terminating an employee involved in union activities based on infractions of rules that were normally not enforced.

The ALJ ordered Starbucks, among other things, to cease and desist from enforcing the unlawful policies, to post a notice at all of Starbucks’ U.S. corporate-owned stores for one year and to electronically distribute these documents to all employees.

This case serves as an example of the application of NLRB’s decision in Stericycle, Inc.,372 NLRB No. 113 (Aug. 2, 2023), in which the Board held that if an employee could reasonably interpret the rule to restrict protected activity, the rule is presumptively unlawful. The ALJ abided by the language in Stericycle and resolved nearly every doubt about a workplace rule’s validity against the employer. The ALJ’s findings relied heavily on what was classified as broad language and a lack of narrow tailoring on Starbucks’ part. The ALJ’s finding of individual store violations centered on the timing and abnormality of the discipline for employees involved in union activities.

Employers should be aware of any ambiguity in their company policies that might implicate concerted activity, as such ambiguity could serve as grounds for an NLRA violation. Employers should continue to review and update their handbooks and policies to resolve ambiguities and ensure that the language is narrowly tailored. Employers should also be cognizant of their disciplinary procedures and avoid enforcing dormant policies against employees engaged in union activity.

Should you need to discuss this decision and its effect on your organization in greater detail, the BakerHostetler Labor and Employment Practice Group is available to assist.

Employee Handbooks Remain Under Board Attack