NLRB Invalidates Employer’s Courtesy Rule as Violating Employee Right to Be Disrespectful, But Upholds Termination for Mocking Customer Test Drive

On Friday, a divided NLRB (i.e., 2 Democrats vs. 1 Republican) affirmed an Administrative Law Judge decision that an automobile dealership violated its employee's rights by utilizing an employee handbook which required employees to behave courteously. Karl Knauz Motors, Inc.,
Case 13–CA–046452. The NLRB unanimously, however, affirmed the ALJ finding that the employer lawfully terminated the employee for mocking a customer test driving accident on his Facebook page because he was not engaging in any concerted activity arguably related to the terms and conditions of his employment or on behalf of co-workers.   Interestingly, in light of the lawful termination grounds, the NLRB refused to address the employee's argument that he was actually terminated for a different Facebook post where he mocked the employer's cheap refreshments for customers of its expensive cars. In contrast to mocking the poor driving skills of a customer's child (and the sales rep apparently sitting in the passenger seat), mocking the employer's cheap refreshments was arguably related to the lower sales commissions the employee anticipated would flow from the minimal investment in food. The employer did not object to the ALJ's finding that the handbook also violated the NLRA with its provisions on "unauthorized interviews" and "outside inquiries concerning employees" and had rescinded those rules (as well as the Courtesy rule) before the evidentiary hearing. The NRLB General Counsel also did not object to ALJ's approval of the employee handbook's "Bad Attitude" rule.  

The NLRB's discussion may be enlightening for employers:

The judge found that the Respondent, which owned and operated a BMW dealership, violated Section 8(a)(1) of the Act by maintaining a rule in its employee handbook stating:

(b) Courtesy: Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

For the following reasons, we agree with the judge's finding.

An employer violates Section 8(a)(1) when it maintains a work rule that reasonably tends to chill employees in the exercise of their Section 7 rights. . . . If it does not, the violation is dependent upon a showing of one of the following: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. Id. at 647. (citations omitted).

We find the "Courtesy" rule unlawful because employees would reasonably construe its broad prohibition against "disrespectful" conduct and "language which injures the image or reputation of the Dealership" as encompassing Section 7 activity, such as employees' protected statements—whether to coworkers, supervisors, managers, or third parties who deal with the Respondent— that object to their working conditions and seek the support of others in improving them. First, there is nothing in the rule, or anywhere else in the employee handbook, that would reasonably suggest to employees that employee communications protected by Section 7 of the Act are excluded from the rule's broad reach. See generally Costco Wholesale Corp., 358 NLRB No. 106 (2012) (finding unlawful the maintenance of a rule prohibiting statements posted electronically that "damage the Company . . . or damage any person's reputation"). Second, an employee reading this rule would reasonably assume that the Respondent would regard statements of protest or criticism as "disrespectful" or "injur[ious] [to] the image or reputation of the Dealership." Cf. NLRB v. Gissel Packing Co., 395 U.S. 575 (1969) (in evaluating employer statements alleged to violate Sec. 8(a)(1), "assessment of the precise scope of employer expression . . . must be made in the context of its labor relations setting" and "must take into account the economic dependence of the employees on their employers"). As we recently observed:

Board law is settled that ambiguous employer rules – rules that reasonably could be read to have a coercive meaning – are construed against the employer. This principle follows from the Act's goal of preventing employees from being chilled in the exercise of their Section 7 rights[,] whether or not that is the intent of the employer . . . .

Flex Frac Logistics, LLC, 358 NLRB No. 127, slip op. at 2 (2012).

. . . .

In other words, compliance with the first sentence of the rule is no assurance against sanctions under the second sentence of the rule. Reasonable employees would believe that even "courteous, polite, and friendly" expressions of disagreement with the Respondent's employment practices or terms and conditions of employment risk being deemed "disrespectful" or damaging to the Respondent's image or reputation. Thus, contrary to the dissent's contention, the second sentence of the rule proscribes not a manner of speaking, but the content of employee speech—content that would damage the Respondent's reputation. For example, here we find that the Respondent unlawfully coerced its employees by promulgating two other rules that restrict employees' ability to communicate about their terms and conditions of employment. Presumably, even if employees shared with third parties information about our findings of the Respondent's unlawful conduct in the most genteel manner, such sharing would be injurious to the Respondent's image or reputation. A reasonable employee, consequently, would believe that such a communication would expose him or her to sanctions under the Respondent's rule.

The dissent argued that the majority's interpretation of past precedent was unreasonable as applied to the facts of this case. In any event, the employer was ordered to rescind the "Courtesy" rule in its employee handbook "that prohibits employees from being disrespectful or using profanity or any other language which injures the image or reputation of the Dealership," notify the employees of the rescission and post a copy of the Appendix summarizing the NLRB requirements. It was not, however, required to reinstate the fired employee.

As mentioned, the ALJ did not find any problem with the employer's Bad Attitude rule, which the employer also rescinded before the hearing and which provided:

Bad Attitude: Employees should display a positive attitude toward their job. A bad attitude creates a difficult working environment and prevents the Dealership from providing quality service to our customers.

The ALJ found that "the one sentence prohibition would reasonably be read to protect the relationship between the Respondent dealer and its customers, rather than to restrict the employees' Section 7 rights. As was frequently mentioned during the hearing, BMW is a top of the line automobile with, I imagine, an appropriate sticker cost. A dealer in that situation, I believe, has the right to demand that its employees not display a bad attitude toward its customers."

In publicizing the decision, the NLRB explains:

The National Labor Relations Act protects the group actions of employees who are discussing or trying to improve their terms and conditions of employment. An individual's actions can be protected if they are undertaken on behalf of a group, but the judge found, and the Board agreed, that was not the case here.

As Judge Biblowitz wrote, "It was posted solely by [the employee], apparently as a lark, without any discussion with any other employee of the Respondent, and had no connection to any of the employees' terms and conditions of employment. It is so obviously unprotected that it is unnecessary to discuss whether the mocking tone of the posting further affects the nature of the posting." Because the posts about the marketing event did not cause the discharge, the Board found it unnecessary to pass on whether they were protected.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.