As sophisticated employers know, an employer must track and comply with developments not only in federal law, but also state and local law. This blog post details key changes in employment laws in the Commonwealth of Virginia in 2019, as well as upcoming changes in 2020, including new personnel records disclosure and paystub requirements.

Employers Must Provide Employment Records Upon Employee Request

As of July 1, 2019, all employers in Virginia must turn over employment records upon the written request of a current or former employee, or that employee’s attorney. The records must show (i) the employee’s dates of employment; (ii) the employee’s wages or salary during employment; (iii) the employee’s job title and job description during employment; and (iv) any injuries sustained by the employee during employment (if applicable). See Va. Code §8.01-413(B). Upon written request, employers have 30 days to comply or provide written notice of delay in responding. That notice buys the employer another thirty days and must specify the reason for the delay. Should the employer fail to comply with the written request for a personnel file, the employee can issue and enforce a subpoena, and willful noncompliance may result in the employer being ordered to pay fees associated with enforcement. For further information, please see our blog post on this law.

#MeToo Animates Legislature: NDAs That Operate to Conceal Details of Sexual Assault Claims Void

As of July 1, 2019, employers are forbidden from requiring employees or prospective employees to execute or renew provisions in non-disclosure agreements that have the purpose or effect of concealing details of claims or rape, forcible sodomy, aggravated sexual battery, or sexual battery as a condition of employment. Va. Code § 40.1-28.01. Any existing provisions executed by employees or prospective employees are void and unenforceable as contrary to public policy. As a result, no employer can enforce the terms of any NDA executed by an employee or prospective employee where doing so would prohibit the employee from disclosing the sexual assault offenses mentioned above. Arguably, this provision does not apply to a separation agreement or other agreement executed in connection with a separation from employment (since such agreement would not be entered into “as a condition of employment”), however, this view has not yet been tested in the courts.

Virginia Enacts New Paystub Law

Effective January 1, 2020, Virginia requires employers to provide employees with a detailed paystub every pay period. The paystub, which can be in paper or electronic form, must contain (i) the name and address of the employer; (ii) the number of hours worked by the employee in the pay period; (iii) the employee’s rate of pay for those hours; (iv) the gross wages earned by the employee during the pay period; and (v) the amount of, and reason for, any payroll deductions. See Va. Code § 40.1-29(C). Before this new law went into effect, Virginia employers only needed to provide gross wages and deductions on a paystub, and only had to provide such a paystub upon employee request.

Several Exemptions Under the Virginia Minimum Wage Law Repealed

As of July 1, 2019, certain classes of employees are no longer exempt from Virginia’s minimum wage law, including theater cashiers, ushers, and concession attendants. Va. Code § 40.1-28.9(A).  Going forward, these employees must be paid the Virginia minimum wage (which is the same as the Federal Minimum Wage: $7.25 per hour) or the employer is subject to penalties including 8% annual interest on wages owed but not paid, plus any attorneys’ fees incurred in connection with the enforcement of the statute. Va. Code § 40.1-28.12.

Expected Future Developments

Due to the recent Democratic control of the Virginia General Assembly and Governor’s mansion, we expect the General Assembly may enact more employee-friendly laws in 2020. For instance, legislators have already introduced a bill that would increase the Virginia minimum wage to $15.00 per hour by 2025, with additional increases thereafter to account for inflation.. If other nationwide trends offer any insight, Virginia may also contemplate bills relating to paid sick leave, ban-the-box, additional protections for LGBTQ workers, and prohibiting the enforcement of non-competes against low-wage workers.

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For more details about these legal developments or other employment law questions, ask one of the authors of this blog post or the Hogan Lovells lawyer with whom you work.

As sophisticated employers know, an employer must track and comply with developments not only in federal law, but also state and local law. This blog post details key changes in employment laws in the District of Columbia in 2019, as well as upcoming changes in 2020, including changes to paid family leave and minimum wages.

D.C.’s Universal Paid Leave Act Approaches Full Implementation on July 1, 2020

As discussed in our prior blog post, D.C. employers began paying payroll taxes in July 2019 to fund paid family and medical leave benefits, which will become available to eligible employees under D.C.’s Universal Paid Leave Act (“UPLA”) starting July 1, 2020. See D.C. Code § 32-541.  UPLA benefits, which will be administered by the D.C. Government, include up to 8 weeks of paid leave benefits for new child bonding, 6 weeks to care for a family member with a serious health condition, and 2 weeks for the employee’s own serious health condition. In total, employees can receive up to 8 weeks of paid leave benefits under the UPLA per year.  Additional information about the new program, including a required Paid Family Leave Employee Notice that employers must provide to employees about UPLA benefits by February 1, 2020, can be found in our blog posts here and here.

Victims of Domestic and Sexual Violence are Now Covered under the D.C. Human Rights Act

Effective February 8, 2019, the District of Columbia’s Human Rights Act (“DCHRA”) prohibits discrimination against employees on the basis that they or their family members are victims of domestic violence, sexual offenses, or stalking.  See D.C. Code § 2-1402.11.  Additionally, employers must make reasonable accommodations for such employees when accommodation is necessary to ensure the employee’s (or the employee’s family member’s) security and safety, as long as the accommodation would not cause the employer undue hardship.  With certain exceptions, employers must maintain as confidential any information provided from such employees that is related to an employee’s or employee’s family member’s status as a victim of domestic violence, a sexual offense, or stalking.

D.C.’s Minimum Wage Will Increase to $15.00 per Hour

On July 1, 2019, the D.C. minimum wage rose to $14.00 per hour, and on July 1, 2020, it will increase to $15.00 per hour. See D.C. Code § 32-1003. Thereafter, it will be adjusted each year based on changes in the cost of living.  The upcoming increase to the minimum wage is part of a series of increases originating from the District’s “Fair Shot Minimum Wage Amendment Act of 2016.”  Additionally, tipped workers must be paid $5.00 per hour beginning July 1, 2020.  For information on last year’s minimum wage increase, please see our blog post on the topic.

D.C.’s Wage Garnishment Fairness Amendment Act Exempts Many Lower-Wage Workers from Garnishment

On April 11, 2019, the protections provided under the Wage Garnishment Fairness Amendment Act of 2018 went into effect.  Employees whose disposable wages in a given week do not exceed 40 times the District of Columbia minimum wage (40 times the current minimum wage of $14.00 per hour equals $560) are exempt from garnishment for that week altogether.  The Act also requires notice to debtors when a writ of attachment is served on their employer and allows debtors to file a motion in Superior Court to exempt certain wages from garnishment due to financial hardship.  See D.C. Law 22-296; D.C. Code § 16-572 to -573.

New Sexual Harassment Training and Payroll Reporting Requirements for Employers of Tipped Workers

The Tipped Wage Workers Fairness Act of 2018, which went into effect December 13, 2018, among other things, imposes sexual harassment training requirements on employers of tipped workers and requires certain such employers to submit payroll data through a third-party payroll provider.  Specifically, employees of such employers must receive sexual harassment training from the D.C. Office of Human Rights (“OHR”) or an OHR-certified provider every two years.  Managers, owners, and operators must also be trained every two years, and training for managers must be in-person.  New employees must be trained within 90 days of hire.  Employers have until December 12, 2020 to complete the training for employees hired before the Act’s effective date.  Additionally, as of January 1, 2020, employers of tipped employees (except for hotel employers) must use a third-party payroll provider that submits quarterly reports through the Department of Employment Services (“DOES”) self-service portal, no later than 30 days after the end of each quarter, certifying that each employee was paid at least the required minimum wage, including gratuities.  See D.C. Law 22-196.

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For more details about these legal developments or other employment law questions, ask one of the authors of this blog post or the Hogan Lovells lawyer with whom you work.

The District of Columbia Department of Employment Services (“DOES”) recently released a Paid Family Leave Employee Notice (“PFL Notice”) that D.C. employers must provide to employees by February 1, 2020.   The PFL Notice, which is available here, contains information about the paid leave benefits that will be available under D.C.’s Universal Paid Leave Amendment Act of 2016 (“ULPA”) starting July 1, 2020

As we explained in a prior post, the UPLA establishes a program funded by employer tax contributions that will provide employees with partial wage replacement benefits for (1) parental leave for new child bonding (up to 8 weeks per year); (2) family leave to care for a family member with a serious health condition (up to 6 weeks a year); and (3) medical leave for the employee’s own serious health condition (up to 2 weeks a year), with a cap on total paid leave benefits provided to an employee at 8 weeks annually.

Beyond posting the PFL Notice by February 1, 2020, employers have an ongoing duty to provide the PFL Notice, either physically or electronically, to employees in three situations after February 1, 2020:

  1. to all employees at least once between February 1, 2020 and February 1, 2021, and at least once a year thereafter;
  2. to all new employees at the time of hire; and
  3. to any individual employee when the employer receives direct notice of the employee’s need for leave for an event that could qualify for PFL benefits.

In addition to complying with these notice requirements, employers should be reviewing their current leave policies to determine whether revisions are needed before UPLA benefits become available in July. The PFL Notice does not address coordination of PFL and employer-provided leave benefits. For currently available information about how PFL benefits may intersect with employers’ own leave policies, see our prior post here. DOES is expected to publish final benefits regulations soon, which may provide additional guidance on how to coordinate existing leave policies with the new law.

As part of an ongoing project to update its guidance and technical assistance documents, the Equal Employment Opportunity Commission (“EEOC”) last week issued a statement rescinding its 1997 Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment (the “Policy Statement”)EEOC policy statements do not have the force of law, but they are often relied on as guidance by both EEOC investigators and courts.  Last week’s announcement brings the EEOC’s policies in line with recent Supreme Court decisions recognizing the enforceability of employment-related arbitration agreements under federal law; however, the enactment of several state statutes restricting the use of such agreements in the #MeToo era leaves the terrain unsettled.     

The EEOC rescinded the 1997 Policy Statement—which had deemed mandatory arbitration of employment-related disputes inconsistent with the purposes of Title VII and other federal civil rights laws—because the Policy Statement conflicted with subsequent Supreme Court decisions holding that employment-related arbitration agreements are generally enforceable under the Federal Arbitration Act (“FAA”).  The EEOC’s rescission announcement referenced numerous Supreme Court cases, including Epic Systems Corp. v. Lewis, 138 S. Ct.  1612 (2018), which held that arbitration agreements waiving class or collective claims are enforceable (see our prior post here ), and Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (2019), which held that class arbitration of employment disputes is not required when an arbitration agreement is ambiguous as to the arbitrability of class claims (prior post here).   

The EEOC’s announcement also emphasized the Supreme Court’s holding in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991), that employees subject to arbitration agreements can still file EEOC charges and states that “[n]othing in this rescission should be construed to limit the ability of the Commission or any other party to challenge the enforceability of a particular arbitration agreement.”  In 2014, the EEOC sued an employer whose arbitration agreements allegedly required employees to give up their right to file charges with the EEOC or state and local fair employment practices agencies.  The employer ultimately prevailed before a federal district court, but the case remains pending before the U.S. Court of Appeals for the Eleventh Circuit.  It remains unclear how vigorously the EEOC will  challenge what it perceives to be overbroad arbitration agreements going forward.

The EEOC’s rescission announcement did not address recently enacted state laws restricting mandatory arbitration of sexual harassment and/or other discrimination claims in the wake of #MeToo—including, for example,  California AB 51, which goes into effect January 1, 2020 (see our post here), and similar laws in Maryland, New Jersey, and New York (prior posts here, here, and here).  As explained in our previous posts, it is uncertain whether these laws will be considered preempted by the FAA, and at least one federal district court has already compelled arbitration pursuant to the FAA notwithstanding New York’s law prohibiting mandatory arbitration of discrimination claims.

Employers should continue to monitor developments with the assistance of counsel in this rapidly changing area of law.

On December 17, 2019, the National Labor Relations Board (“NLRB”) held that confidentiality mandates during pending workplace investigations are lawful.  This ruling overruled the NLRB’s recent precedent that such mandates infringe on the rights of employees (union or non-union) under the National Labor Relations Act (“NLRA”) to engage in “concerted protected activity”, which includes the right to discuss discipline or ongoing disciplinary investigations involving them or their coworkers.

This decision, Apogee Retail LLC d/b/a Unique Thrift Store v. Kathy Johnson, case number 27-CA-191574 and 27-CA -198058, relieves employers of the existing burden to establish, on a case-by-case basis, that its interest in conducting a specific confidential investigation outweighed the employees’ interest in exercising “concerted activity” rights. It further resolves conflict on this issue between the NLRB and the Equal Employment Opportunity Commission (“EEOC”) which advocates for employers to maintain the confidentiality of discrimination investigations to the extent possible in order to encourage bias victims to come forward, particularly in sexual harassment cases.

A recap of the changing precedent:

A 2015 NLRB decision known as Banner Health Systems found that employer instructions not to discuss ongoing workplace investigations were unlawful unless an employer could demonstrate that for any investigation where confidentiality was required, the integrity of the investigation would be compromised without it.  The Banner Health dissent protested that the Board was not balancing competing employer/employee interests in workplace rules as required, but had instead put a thumb on the scale on the employee side.  A subsequent development in a 2017 NLRB decision involving Boeing announced a new test for analyzing business interests in a workplace rule with workers’ rights by designating the rule into one of three categories : Category 1 where a rule is presumptively legal because there is no infringement on workers’ rights or the employer’s interest outweighed the employee’s  interests; Category 2 which requires greater individual scrutiny as to a rule’s adverse impact on NLRA-protected conduct; and Category 3 rules which are presumptively unlawful as the adverse impact on NLRA rights is not outweighed by the employers interest in the rule.

In Apogee, the Board applied the Boeing analysis and found that open investigation confidentiality rules fit squarely in Category 1. The majority held that Banner Health had failed to recognize the importance of confidentiality assurances to both employers and employees during an ongoing investigation–in terms of ensuring the integrity of the investigation, obtaining and preserving evidence, encouraging prompt reporting of unsafe or discriminatory behavior without fear of retaliation and protecting employee sensitive personal information.

Apogee is a 3 to 1 decision with a strong dissent by the NLRB’s outgoing and last Obama administration appointee. In responding to the dissent, the majority reiterated that the current standard requires workplace rules to be viewed from the “perspective of an objectively reasonable employee who is aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job” – a practical standard that incorporates the realities of today’s workplace.

Practical implications for employers:

Apogee provides a welcome bright line rule for employers who have a strong interest in maintaining the integrity of its internal investigations. Confidentiality rules that narrowly bar only disclosure of what is discussed in the course of an open investigation are intended to prevent witness coaching, aligning of stories, retaliation, privacy violations and the chilling of cooperation – all formidable barriers to getting to the truth. The #Me-too movement revealed that fear of retaliation is one of the top reasons that victims of sexual harassment do not come forward.  And while 100% confidentiality in discrimination and other misconduct investigations can never be guaranteed, nor should it ever be promised, requiring parties and witnesses to not disclose on-going investigative information keeps a check on the rumor mill and advances the interest of employers and employees.

On December 16, 2019, the National Labor Relations Board (the “Board”) issued a new decision that strengthens employers’ right to restrict employees from using company email for non-work reasons. Caesars Entertainment, No. 28-CA-60841 (NLRB Dec. 16, 2019). In so doing, the Board overruled its controversial 2014 decision in Purple Communications, which held that employee use of an employer’s email systems for statutorily protected communications under Section 7 of the National Labor Relations Act (“NLRA”) (e.g., discussing terms and conditions of employment and/or union organizing) on nonworking time must presumptively be permitted by employers who give employees access to their email systems, even if all other nonwork use of such systems is prohibited.

Specifically, in Caesars Entertainment, the Board held that an employer does not violate the NLRA by establishing or enforcing restrictions on the nonbusiness use of its IT resources—including email—unless either:

(1) “there is proof that employees would otherwise be deprived of any reasonable means of communicating with each other”; or

(2) there is “proof of discrimination” in the establishment or enforcement of the restrictions.

The Board explained that the first exception would apply in “rare” circumstances where the email system “furnishes the only reasonable means for employees to communicate with one another.” The Board underscored the difficulty of proving this exception applies by referencing the fact that “in modern workplaces employees also have access to smartphones, personal email accounts, and social media, which provide additional avenues of communication” other than employer-provided email.

As for the second exception, in determining whether email restrictions are lawful and not discriminatory, employers should consider the Board’s 2007 decision in Register Guard (which had itself been overruled by Purple Communications). In Register Guard, the Board gave examples of when discrimination in access to Company email might exist, including when an employer “permitted employees to use e-mail to solicit for one union but not another, or if it permitted solicitation by antiunion employees but not by prounion employees.” On the other hand, the Board explained that “nothing in the [NLRA] prohibits an employer from drawing lines on a non-Section 7 basis,” such as “between charitable solicitations and noncharitable solicitations, between solicitations of a personal nature (e.g., a car for sale) and solicitations for the commercial sale of a product (e.g., Avon products), between invitations for an organization and invitations of a personal nature, between solicitations and mere talk, and between business-related use and non-business-related use.” The Register Guard Board also noted that if the evidence proved that the employer’s motive for line-drawing was antiunion, that too could violate the NLRA.

As a result of the Caesars Entertainment decision, employers should review their employee handbooks and other policies and procedures to determine whether it is sensible to make any changes to reflect this change in the law. For more information on this development or other labor and employment questions, please contact one of the authors of this article or the Hogan Lovells lawyer with whom you work.

New York employers – New York State has gifted you an early holiday present – a requirement to update your handbook, comply with a new law immediately or potentially face steep consequences.

On November 8, 2019, Governor Cuomo signed into law a bill prohibiting employment discrimination based on an employee’s or a dependent’s “reproductive health decision making,” “including, but not limited to, the decision to use or access a particular drug, device or medical service.” Colloquially known as the “Boss Law” this State law joins New York City in making reproductive health decisions a protected category. Notably, while these new laws protect employees from discrimination on the basis of reproductive health decisions, they do not specifically require employers to provide particular reproductive health benefits to employees.

Before January 7, 2020 all New York employers are required to update their employee handbooks to include a notice of employees’ rights and remedies under this law.  Although many employee handbooks already include “catch-all” provisions within their equal employment, anti-discrimination and/or sexual harassment policies, we recommend that this change be explicitly spelled out in an employee handbook, as New York went through the unusual step of inserting this handbook requirement into the law.

Specifically, under Section 203-e of the New York State Labor Law employers are prohibited from:

  1. Accessing an employee’s personal information regarding the employee’s or the employee’s dependent’s reproductive health decision making without the employee’s prior informed affirmative written consent;
  2. Discriminating against or taking any retaliatory personnel action against an employee with respect to “compensation, terms, conditions, or privileges of employment” because of or on the basis of the employee’s or dependent’s reproductive health decision making; or
  3. Requiring an employee “to sign a waiver or other document” that denies the employee the “right to make their own reproductive health care decisions.”

Consequences for violating the law could be severe.  Employees have a private right of action and can seek remedies including back pay, benefits, and reasonable attorney’s fees and costs, as well as injunctive relief and/or reinstatement against any employer that “commits or proposes to commit” a violation of the law.  Moreover, the law permits liquidated damages “equal to one-hundred percent of the award for damages…unless the employer proves a good faith basis to believe that its actions…were in compliance with the law.”

If an employer retaliates against the employee (defined as “discharging, suspending, demoting, or otherwise penalizing an employee for: (a) making or threatening to make, a complaint to an employer, co-worker, or public body, that rights under the section have been violated; (b) causing to be instituted any proceeding under or related to this section; or (c) providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry into a violation of a law, rule or regulation”) an employee may be entitled to a separate award of civil penalties.

Further guidance is expected from the Department of Labor with respect to the requisite notice, but in the meantime employers should be sure to update their handbooks and consider adding this protected category to any existing materials.

Employers beware: New Jersey’s salary history ban, signed this past summer, takes effect on January 1, 2020.  On that date, New Jersey will join several other states (including New York and California) by prohibiting private employers from inquiring about an applicant’s compensation history, including salary, wages, commissions, benefits and other compensation.

The law provides for a private right of action as well as civil penalties.  Employers who violate the law can be fined up to $1,000 for a first offense, $5,000 for a second offense, and $10,000 for each subsequent violation and face additional risk under the New Jersey Law Against Discrimination.

Although the prohibition is broad, employers are permitted to consider and/or request salary history in certain limited circumstances:

  • If the applicant, without employer prompting or coercion, voluntarily reveals their salary history;
  • If the applicant is applying for an internal transfer or promotion;
  • If the employer knows an applicant’s compensation history through the applicant’s prior employment with the employer;
  • Pursuant to any federal law or regulation requiring the disclosure or verification of salary history for employment purposes, or requiring knowledge of salary history to determine an employee’s compensation;
  • If the applicant gives written consent to a headhunting agency to share salary history with prospective employers.

In addition, the law does not prohibit employers from:

  • Asking about an applicant’s previous experience with incentive and commission plans and the terms and conditions of those plans, provided (i) the employer does not seek or require the applicant to report information about the amount of earnings in connection with the plans and (ii) the employment opening includes an incentive or commission component as part of the total compensation package;
  • Asking applicants about their salary expectations;
  • Attempting to verify disclosure of non-salary related information when conducting a background check provided that the employer specifies that salary history information should not be disclosed (and if that information is disclosed, the employer may not consider it);
  • Requesting written confirmation of an applicant’s salary history after making an offer to the applicant that includes an overall compensation package. The employer cannot then alter the compensation package once it learns of the applicant’s salary history.

To prepare for Jan. 1, New Jersey employers should train all individuals involved in the hiring process on the new salary history prohibitions.  Employers should also review their employment applications to ensure there are no questions about compensation history, or that common applications for multi-locational employers clearly instruct New Jersey applicants not to answer questions about salary history.

 

The filing of class actions against California employers for meal and rest break violations remain as prevalent as ever, but the California Courts of Appeal have recently issued two rulings that may help employer-defendants.

Under California law, employers are required, under most circumstances, to provide employees duty-free meal periods of at least 30 minutes and rest breaks of at least 10 minutes at prescribed intervals.  If they fail to do so, they must pay employees for one additional hour at their “regular rate of compensation.”  See Cal. Labor Code section 226.7.

But in two recent separate decisions, the Courts of Appeal narrowed the scope of damages available against employers for these types of claims.

In Ferra v. Loews Hollywood Hotel, LLC (App. Case No. B283218), the Court addressed the definition of “regular rate of compensation.”  The definition matters because prior holdings by California courts defining “regular rate of pay” in the overtime context held that employers must include nondiscretionary payments (e.g., shift differentials and nondiscretionary bonuses) in addition to the regular hourly wages in calculating overtime.

The plaintiffs in Ferra argued that the “regular rate of compensation” owed for missed meal breaks was the same as the “regular rate of pay,” and as a result, the company’s payment of one hour of regular hourly wages (which did not include nondiscretionary quarterly bonuses) was insufficient.  The Court of Appeal disagreed, holding that meal premiums need only consist of an hour of regular pay.  The employer was not required to include the nondiscretionary bonus amount in the premium.

Moreover, in a separate opinion, Naranjo v. Spectrum Security Services, Inc. (App. Case No. B256232), the Court of Appeal found that failure to pay break premiums cannot be used to trigger waiting time penalties under Labor Code section 203 or wage statement penalties under Labor Code section 226.  The Naranjo plaintiffs contended that the owed meal premiums were “wages” and should entitle them to collect on derivative claims.  The Court disagreed, holding that break premiums are not “wages” and accordingly, plaintiffs could not collect derivative wage statement or waiting time penalties.

The finding is significant because potential exposure for derivative penalties under sections 203 and 226 often dwarf those owed for the missed breaks themselves.  Section 203 imposes penalties of up to 30 days’ wages for failure to pay “any wage” upon separation of employment.  Similarly, Section 226 imposes a penalty of up to $4,000 per employee for wage statements that omit gross and net “wages earned.”

Both the Ferra and Naranjo rulings provide some much welcomed respite to employers facing meal and rest break violation claims in a jurisdiction often known for its derivative and stacking penalties.

Consistent with its intent to relax scrutiny regarding the legality of employment policies (see here and here), the National Labor Relations Board (“NLRB” or “Board”) recently upheld, in LA Specialty Produce Co., two workplace rules: A confidentiality policy and a rule prohibiting employees from responding to media inquiries. Applying its existing two-part balancing test, the Board proceeded to evaluate the lawfulness of the policies in question from the perspective of a “reasonable employee.” Under this approach, the Board will consider “the perspective of an objectively reasonable employee who is ‘aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job.’” As such, if a reasonable employee would interpret a policy as not interfering with his or her rights under Section 7 of the National Labor Relations Act (“NLRA”), then it will be found lawful.

The first policy at issue in LA Specialty Produce was a confidentiality policy, which read: “Every employee is responsible for protecting any and all information that is used, acquired or added to regarding matters that are confidential and proprietary of [the employer] including but not limited to client/vendor lists.” The union challenged the policy, arguing that the confidentiality provision can be reasonably construed to restrict employees’ right to contact third parties, including customers of their employer, for support in labor disputes. However, the Board upheld the confidentiality policy on the grounds that it was instead intended to protect confidential and proprietary records, such as customer lists, which “target the protection of business information a company has developed over time” and “do[es] not target information central to the exercise of Section 7 rights, such as employee salary or wage information. Nor do they prohibit employees from appealing to customers or vendors for support in a labor dispute, or from disclosing the names and locations of customers or vendors derived from sources other than the employer’s own confidential records.”

The second policy in LA Specialty Produce was a media contact rule stating: “Employees approached for interview and/or comments by the news media cannot provide them with any information. Our President . . . is the only person authorized and designated to comment on Company policies.” The union challenged the policy on the premise that it precluded employees from speaking with the media about working conditions, labor disputes, and other terms and conditions of employment. The Board upheld the rule because, it stated, a “reasonable employee” would understand that the rule does not infringe on his or her NLRA rights—while the rule prohibits employees from speaking when “approached” by the media, it does not restrict employees from taking concerns to the press.

LA Specialty Produce Co. contributes to a growing body of NLRB decisions upholding workplace rules. Nevertheless, employers should continue to review their employee handbooks and any other policies in effect to ensure that they do not infringe upon their employees’ Section 7 rights. Though the current NLRB will not reverse course, it continues to scrutinize the business justifications for rules that restrict employee rights on their face, or which may restrict such rights through their breadth. Employers must also keep in mind the various other state and federal requirements that pertain to workplace policies. For more information on these topics, or any other legal issues affecting the workplace, contact the authors of this article or the Hogan Lovells lawyer with whom you work.