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No Parade for Employers: NLRB Judge Invalidates Several Policies in Macy’s Handbook

The NLRB continued its assault on employee handbooks and policies, as an administrative law judge recently found several provisions in the Macy’s handbook, including the confidential information policy, to be unlawful, as employees would reasonably read them to restrict protected concerted activity.  Specifically, the judge ruled: “The Respondent violated Section 8(a)(1) of the Act by unlawfully restricting its employees’ use of information regarding their fellow employees and the Respondent’s customers, the use of the Respondent’s logo, and requiring the employees to notify Respondent’s Human Resources representative prior to providing information for a government investigation.”

The policies in question may look very similar to those of many employers.  The Macy’s confidential information policy provides:

 We are all obligated to protect the assets of the Company and use them appropriately … our Company’s assets include Company information, the personal information of the Company’s employees and customers. … Confidential Information about our Company, its business, associates, customers and business partners should be protected. … What is confidential information?  It could be … information about employees. … Confidential information should: … Be shared only with those who need to see it for Company business purposes … Not be discussed where others may hear.

The Macy’s privacy policy provides:

The Company has certain personal data of its present and former associates, customers and vendors.  It respects the privacy of this personal data and is committed to handling this data responsibly and using it only as authorized for legitimate business purposes.  What is considered personal data?  It is information such as names, home and office contact information … and other similar data. … We have a strict obligation to use such personal data in a manner that: … Respects the privacy of our co-workers and our Company’s customers and vendors.

The Macy’s use of company systems policy provides:

Any information that is not generally available to the public that relates to the Company or the Company’s customers, employees, vendors, contractors, service providers, Systems, etc., that you receive or to which you are given access during your employment or while you are performing services for the Company is classified as “Confidential” or “Internal Use Only” under the Macy’s Information Security Policy. … Company maintains certain information regarding its present and former associates, customers and vendors.  Company respects the privacy of this data where it includes personally-identifiable information (“Personal Data”).  Personal Data includes names, home and office contact information, social security numbers, driver's license numbers, account numbers and other similar data.

The judge found that the handbooks’ restrictions on the release of personal information of the Macy’s employees, including their names and home and office contacts, “obviously restricts employees in their Section 7 rights to discuss their terms and conditions of employment with fellow employees, as well as their ability to notify a union of other employees of the Respondent who might be interested in participating in the union movement.”  The judge continued: “The fact that this restriction was repeated so many times in the Handbook further enforces the belief that employees could reasonably believe that it interferes with their Section 7 rights.”

In addition, the judge found overbroad the handbook’s restrictions on the use of information regarding customers and vendors.  Moreover, the judge invalidated a handbook provision prohibiting the use of the Macy’s “logo or other intellectual property” by others, finding: “[T]his prohibition could also be reasonably understood to limit its employees, or a union, from publicizing a dispute with the Respondent by employing its logo in its distributed information.  This could be an effective means of publicizing a dispute as the Respondent’s logo is well known and easily recognized.”  The judge also found that the Macy’s handbook violated the NLRA by requiring employees to notify Respondent’s representatives prior to participating in a governmental investigation.

Finally, the judge found the handbook’s savings clause too “generic” to rescue the above provisions.  That savings clause provided: “Nothing in the Code or the policies it incorporates, is intended or will be applied, to prohibit employees from exercising their rights protected under federal labor law, including concerted discussion of wages, hours or other terms and conditions of employment.  This Code is intended to comply with all federal, state, and local laws, including but not limited to … the National Labor Relations Act, and will not be applied or enforced in a manner that violates such law[].”

Accordingly, as a remedy, the judge ordered Macy’s to rescind these provisions, notify all of its employees nationwide that it has done so and that these provisions are no longer in effect, and post a notice to its employees to this effect.

This administrative law judge ruling could potentially be amended or even overruled by the NLRB.  However, it should still concern employers, as the provisions attacked here are likely quite similar to other employers’ policies.  Employers should be mindful of the Board’s recent crusade against overbroad handbook provisions, and should review their policies—including those not typically associated with NLRB scrutiny (such as confidentiality and privacy policies)—with an eye towards the Board’s recent rulings.

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David Katz