Management Memo

Management’s inside guide to labor relations

NLRB Looks to Make It Harder for Employees to Decertify Unions

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Steven M. Swirsky

Steven M. Swirsky

National Labor Relations Board (NLRB) General Counsel Richard F. Griffin, Jr., has announced in a newly issued Memorandum Regional Directors in the agency’s offices across the country that he is seeking a change in law that would make it much more difficult for employees who no longer wish to be represented by a union to do so.  Under long standing case law, an employer has had the right to unilaterally withdraw recognition from a union when there is objective evidence that a majority of the employees in a bargaining unit no longer want the union to represent them.

The General Counsel Wants the Board to Change the Law

If the General Counsel’s position is agreed to by a majority of the members of the Board, it would be an unfair labor practice for an employer to withdraw recognition from a union, no matter how strong the evidence is that employees do not want to be represented unless and until the employees or the employer petition for a decertification election, a majority of the employees vote against continued representation and the results of the vote are certified.  This would mean that the employer would be required to continue to recognize the union and bargain with it for a new contract even where it knows that a majority of the employees do not want the union to continue to represent them.

Levitz Furniture Allows Employers to Withdraw Recognition Based on Objective Evidence That a Majority Of Employees No Longer Want the Union to Represent Them

Fifteen years ago, in Levitz Furniture Co. of the Pacific, the Board’s then General Counsel made a similar argument to the Board, which it rejected.  While the Board in Levitz held that an employer needed more than an objective good faith belief that a union was no longer supported by the majority, and in essence set a rule that an employer would act at its peril when withdrawing recognition, it rejected the notion that employees who no longer wanted to be represented by a union could only make such a decision in an NLRB election.

The General Counsel Directs Regions to Ignore Existing Law Under Levitz Furniture

In GC Memo 16-03, the General Counsel has directed the Regional Offices to issue an unfair labor practice (ULP) complaint any time a union files a charge in response to an employer’s decision to act in accordance with existing law and withdraw recognition of a union that is no longer supported by the majority of the employees in a unit.  As the Memo states, the Regional Directors are instructed to unilaterally withdraw recognition “under extant law.”  In other words, complaints will be issued in those cases where employers are taking action that the existing law allows, in the hope that the Board will change the law and find the employer guilty of a ULP for taking action that the law allows it to, and respecting the wishes of its employees.

What Happens Next?

An employer faced with evidence that a majority of its employees no longer want to be represented at the end of a contract, has until now had several options.  It could file an RM petition, asking the Board to hold a secret ballot vote to allow the employees to vote on continued representation or it could, if it concluded the evidence that the union had lost majority support was clear, it could inform the union of that fact and therefore that it was withdrawing recognition and would not bargain for a new contract.  Often, such employer action was met with ULP charges by the union and a union effort to convince the employees to stick with it.  If the employer, or for that matter an employee, filed a petition for a decertification election, a common union response has been to fight on and do whatever it could to delay the election and if possible deny the employees of their right to make the decision.  Unions can easily accomplish this desired delay by filing any garden variety unfair labor practice charge which, under NLRB procedures, act to “block” the election until they are fully investigate, litigated and resolved.  Union’s often file multiple and successive blocking charges” to continually delay employees’ ability to exercise their right to become union free.

If the General Counsel is able to convince the Board to overturn Levitz Furniture the result will likely be a serious impairment of the right of employees to decide whether or not they want to continue to be represented.  The General Counsel’s decision to seek to overturn Levitz Furniture should not come as a surprise to those who have read his last GC Memo, 16-01, in which he notified the agency’s Regional Offices of the issues that they must submit to the Division of Advice in the General Counsel’s Office for guidance.  In that memo, issued last month, the General Counsel laid out the road map of his “initiatives and/or priority areas of the law and/or labor policy” and where in his view “there is no governing precedent or the law is in flux.”

Reading the model language included in GC Memo 16-03, it is clear that the General Counsel sees the question of what must happen before an employer may lawfully withdraw recognition to be such an area in “flux” as he references statements in the Levitz Furniture decision in 2001 that if “experience proved” to a future Board that employers were unilaterally withdrawing recognition in the absence of “evidence” clearly indicating that a union had lost majority support, the Board would revisit this question.  While the General Counsel implies that this is why he now wants the Board to revisit the question, GC Memo 16-03 and the model brief language does not point to such evidence.

What Does This Mean for Employers and Employees?

An employer faced with evidence that a majority of its employees no longer wish to be represented by their union has always faced a difficult choice – whether to petition for an election or to respect its employees’ request and take the risk of charges and litigation by immediately withdrawing recognition. Clear understanding of the law and facts, as well as the potential consequences of each course of action has always been critical.  By issuing this Memo and announcing his goal, the stakes have clearly been raised, and the right of employees to decide—perhaps the ultimate purpose of the National Labor Relations Act—has been placed at serious risk.

Invalid Appointment Did Not Invalidate Union Election, Says Third Circuit

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Two years ago, as we discussed here and here, in NLRB v. Noel Canning, 134 S. Ct. 2550 (2014), the U.S. Supreme Court held unconstitutional President Obama’s January 2012 recess appointments of Members Block, Flynn and Griffin to the National Labor Relations Board (“Board” or “NLRB”). The decision cast into doubt the validity of hundreds of NLRB orders and official actions.

Recently, in Advanced Disposal Services East Inc. v. NLRB, decided April 21, 2016, the employer, Advanced Disposal Services, unsuccessfully attempted to invalidate actions taken by Regional Director Dennis Walsh by arguing the invalid recess appointments meant the Board lacked a quorum when it appointed Walsh as a Regional Director for Philadelphia based Region 4. Advanced claimed Walsh’s appointment was therefore invalid, and he lacked authority to oversee the election involving Advanced’s employees in which those employees elected to be represented by the Teamsters Local No. 384 by a vote of 60-58. Because Walsh’s actions facilitating that election were beyond his power, the election was invalid. Following the Board’s certification of the bargaining unit, Advanced refused to bargain with the union, drawing an unfair labor practice charge.

Absent the Noel Canning-based argument concerning the validity of the Regional Director’s appointment, the case would present nothing more than a garden-variety refusal to bargain case, and the only legal issue would be whether substantial evidence supported the Board’s decision. However, the question as to the appointment of the Regional Director created a closely watched legal issue carrying potential implications for many other employers in similar situations.

The case worked its way to the Third Circuit Court of Appeals, which first had to determine whether Advanced had waived its challenge to Walsh’s appointment by failing to raise the issue prior to the election, as required by the Board. Before the Third Circuit, the Board asserted that had Advanced raised this issue prior to the election, it could have corrected it.

Following the D.C. Circuit while distinguishing contrary precedent from the Eighth Circuit, the Third Circuit held the argument was “not a mere procedural technicality,” but instead implicated the very power of the Board to act. Accordingly, it constituted an “extraordinary circumstance” under the National Labor Relations Act, allowing Advanced to raise the issue for the first time on appeal.

However, that was not the end of the matter. In July of 2014, about one month after Noel Canning was decided, all five members of a properly constituted Board ratified its prior personnel decisions, including Walsh’s appointment. Shortly thereafter, Walsh ratified his prior acts in office, including the election involving Advanced. The Board argued these ratifications meant that the employer’s procedural challenge to the election results must fail.

The Third Circuit held that both the Board and the Regional Director had properly ratified their earlier actions. Thus, the Court agreed with the Board that its actions were ultimately procedurally valid. The only remaining question was whether substantial evidence supported the Board’s decision to overrule Advanced’s objection and its refusal to grant a new election. Finding that the Board’s decision was backed by substantial evidence, the Court denied Advanced’s petition for review and granted the Board’s cross-application for enforcement.

This disposition may represent the likely end of the line for similar challenges to invalid, but subsequently ratified appointments. Unless an employer can show that the ratification was somehow tainted, courts may be inclined to accept that the subsequent ratification makes the challenged determination valid. Epstein Becker Green will continue to monitor this issue.

NLRB Argues “Misclassification” as an Independent Contractor Is Unfair Labor Practice

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Steven M. Swirsky

Steven M. Swirsky

In a further incursion into the area of the gig and new age economy, the Regional Director for the National Labor Relations Board’s Los Angeles office has issued an unfair labor practice complaint alleging that it is a violation of the National Labor Relations Act (the “Act”) for an employer to misclassify an employee as an independent contractor.

The Complaint, which is based on a charge filed by the International Brotherhood of Teamsters, through its’ Justice For Port Truck Drivers  campaign, asserts that Intermodal Bridge Transport (“IBT”) “has misclassified its employee drivers as independent contractors, thereby inhibiting them from engaging in Section 7 activity and depriving them of the protections of the Act. The theory behind the ULP charge and complaint is that the Act gives employees the right to unionize and engage in other protected, concerted activity, and that if an employer misclassifies a worker as an independent contractor, it unlawfully deprives the worker of those rights.

The issuance of the complaint in this case comes less than a month after the Board’s General Counsel issued General Counsel Memorandum 16-01, Mandatory Submissions to Advice, identifying the types of cases that reflected “matters that involve General Counsel initiatives and/or priority areas of the law and labor policy.”  Among the top priorities are “Cases involving the employment status of workers in the on-demand economy,” and “Cases involving the question of whether the misclassification of employees as independent contractors,” which as reflected in the IBT complaint the General Counsel contends violates Section 8(a)(1) of the Act.

Clearly organized labor is using the General Counsel Memorandum as an invitation to present cases raising the issues the General Counsel is seeking to litigate.  We will continue to report as additional cases emerge from the General Counsel’s wish list of priorities and initiatives.

NLRB GC Memo Offers Roadmap of His Targets for Expanding Union Protection, Cutting Back on Management’s Rights

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Steven M. Swirsky

Steven M. Swirsky

NLRB General Counsel Richard F. Griffin, Jr. has released a General Counsel Memorandum that offers an unusually frank insight into how he intends to use his office for the remainder of his term to pursue what he calls “initiatives and/or priority areas of the law and/or labor policy” to set an agenda to expand the rights of both represented and unrepresented employees and to pare back, substantially in many circumstances, the rights of employers in collective bargaining, responding to union organizing and to protect their businesses and reputations when they are attacked by employees and unions.

General Counsel Memorandum 16-01 also focuses on cases involving “difficult legal issues where the General Counsel contends “there is no governing precedent or the law is in flux.”  A closer examination of this group of cases in fact reveals that the legal principles involved have been long established by the National Labor Relations Board (“Board” or “NLRB”) with the approval of the courts, but in reality the GC and former pro-union Board members have argued that the law should be changed to expand union rights or cut back on employers’ rights.

The General Counsel has now directed the Board’s Regional Offices, which investigate and process Unfair Labor Practice charges, to submit all cases in which issues identified in the Memo to the Division of Advice, the unit in the General Counsel’s Office’s Division of Advice that provides legal analysis and guidance to the Regions on cases involving complex and novel legal issues.  While the Board’s Regional Directors routinely decide, after investigation of an Unfair Labor Practice charge whether a complaint should be issued, and what legal theory should be relied upon and what remedies should be pursued, in cases referred to Advice, the General Counsel’s office makes those decisions.

As the Memo explains, the General Counsel is looking for cases that will offer the opportunity for the General Counsel to seek to persuade the Board to change its interpretation of the National Labor Relations Act (the “Act”).

Types of Cases Involving “the General Counsel’s Initiatives or Policy Concerns

The Memo identifies 10 categories of cases that raise issues said to involve the General Counsel’s initiatives or policy concerns.  Among the most significant to employers and others interested in what changes in the interpretation and application of the Act and precedents the General Counsel and the Board are likely to focus on in the near term can be grouped in several categories.  A number of the Initiatives and/or Policy Concerns in fact call into several of these groupings.

  • Initiatives and Policy Concerns Curbing Employers’ Rights

Cases involving an allegation that an employer’s permanent replacement of economic strikers had an unlawful motive – while the Board and the courts have long recognized that an employer has a right to hire permanent replacement when employees go on strike to exert economic pressure during contract negotiations provided the hiring of replacements was not in retaliation for employees engaging in conduct protected by the Act, the General Counsel’s inclusion of this category of cases in the memo is both a clear signal to unions to raise such claims when permanent replacements for strikers are hired and a strong suggestion that the General Counsel is likely to relax the existing standards for finding replacement of strikers to be a ULP.  This is one of a number of cases that appear to reflect an initiative to shift the balance of power in contract negotiations towards unions.

Cases involving a refusal to furnish information related to a relocation or other decision subject to a Dubuque Packing analysis – the Memo suggests that the General Counsel is looking to expand unions’ rights when it comes to demanding that employers provide them with additional information where unions are seeking to challenge and resist employer plans to relocate unionized operations and to subcontract or outsource work performed by union represented workers.

Cases involving questions of whether an impasses over a single issue should constitute overall impasses because the issue is critical to one of both of the parties – this suggests the General Counsel intends to ask the Board to make it more difficult for an employer to declare an impasse in collective bargaining, which is a prerequisite to its implementing its last, best and final offer.

  • Initiatives and Policy Concerns Making It Easier for Unions to Organize

Cases that involve the application of Purple Communications to electronic systems other than email, cases where the employer has provided specific evidence of special circumstances privileging a denial of access to its email system, and when the Board issued its December 2014 decision in Purple Communication holding that in almost all instances in which employers granted their employees access to and use of company email systems, the Board noted that it was not addressing whether by the same reasoning employers would also be deemed obligated to allow workers to use other employer property and systems for union organizing and other protected concerted activity.  The General Counsel Memo makes clear that he is now looking for charges from unions and employees that will allow him to present the question to the Board and urge for an extension of Purple Communication to other employer property.  This could include text and other communication systems as well as conceivably the right to hold in person meetings for non-work purposes on an employer’s premises.

Cases presenting the question of whether the employer engaged in unlawful surveillance of employee emails – while the majority in Purple Communication held that employers may be able, in certain circumstances, to restrict or prohibit the use of the systems for communications concerning terms and conditions where such a restriction is necessary to “maintain production and discipline,” it also made clear that the burden is on the employer to establish why such a prohibition or restriction is necessary.  The Board has stated, while an employer may rebut the presumption (of the right to use the email systems) “by demonstrating special circumstances necessary to maintain production or discipline justify restricting its employees’ rights,” the burden will be steep and that “it will be the rare case where special circumstances justify a total ban on nonwork email use by employees,” and an employer seeking to meet that burden “must demonstrate the connection between the interest it asserts and the restriction.”  The General Counsel is now directing the Regional Directors to refer all cases in which this question arises to the Division of Advice, for close scrutiny and to identify cases in which the General Counsel can argue just how narrowly the standard should be applied and the burdens an employer will need to satisfy. 

Cases involving the whether extraordinary remedies such as access by non-employees to employer electronics communication systems , access by non-employees such as union organizers to work areas and providing unions with “equal time” to respond to employer “captive audience” speeches prior to representation elections –  this should be viewed in the context of the General Counsel’s interest in expanding Purple Communications beyond email systems; the General Counsel initiative should also be recognized as an effort to further change the way representation elections have changed under the “ambush election rules” that took effect in 2015.

  • Initiatives and Policy Concerns Expanding Rights of Unrepresented Employees

Cases involving the applicability of Weingarten principles in non-unionized settings today, under the Board’s Weingarten doctrine, union-represented employees have the right to request the presence of a shop steward, delegate or other union representative in investigatory interviews that have the potential to result in discipline.  Except for a brief interlude after the Board followed its 2004 IBM Corp. decision, that right was only afforded to those represented by a union.  By directing the Regional Offices to refer this category of cases to the Division of Advice, the General Counsel reveals his intention to ask the Board to expand Weingarten to unrepresented employees.

Cases involving allegations of “English-only” policies – The General Counsel appears likely to argue that a rule limiting employees to speaking English is an unlawful interference with the right to engage in concerted protected activity.

Cases involving the employment status of workers in the on demand economy  and Cases involving the question of whether the misclassification of employees as independent contractors violates Section 8(a)(1) – the General Counsel appears likely to argue that classifying an individual as an independent contractor when the General Counsel believes the worker should actually be considered as an employee inherently denies him or her the right or ability to engage in concerted protected activities concerning terms and conditions of employment.  This appears to be but one aspect of the General Counsel’s intention to pursue cases involving the gig and on demand economy.  We expect this to also reflect an effort to expand the application of the Board’s August 2015 Browning-Ferris Industries decision expanding the definition of joint employer.-

For additional insights concerning the General Counsel’s initiatives and goals as identified in General Counsel Memo 16-01, we suggest viewing the April 18, 2016 edition of Employment Law This Week.

We will continue to follow and report on the effort of the Board’s General Counsel to implement the initiatives identified in this GC Memo.

NLRB General Counsel Reveals Top Issues in Recent Memo – Employment Law This Week

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Steve Swirsky, one of the co-editors of this blog, is featured on Employment Law This Week. He discusses the NLRB’s General Counsel memo that outlines the agency’s top enforcement priorities for 2016.

The General Counsel for the National Labor Relations Board has issued an internal memo that offers employers insight into his office’s initiatives and emphasis this year. The memo describes the types of cases that must be submitted to the Division of Advice for review, rather than decided by the Regional Office where the charge was filed. Among other priorities, the General Counsel wants to expand employees’ rights to organize and communicate using company resources, cut back on employer rights in bargaining, and grant significant new rights to nonunion employees.

View the episode below.

DOL Releases Final Rule on Labor Relations Consultants – Employment Law This Week

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One of the featured stories in Employment Law This Week is the DOL’s publication of its controversial final rule around labor relations consultants.

The so-called “Persuader Rule” requires employers to disclose when they hire a consultant to help fight attempts at unionization. But the rule, as written, is potentially much broader and could require employers to disclose information about a wide range of consultants and others who they rely on for training and communication.

View the episode below or read more about the new rule in an earlier blog post.

NLRB Protects Non-Union Employee’s Foul-Mouthed Complaining, Slams Employer’s Separation Agreement

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Our colleagues Lauri F. Rasnick and Jonathan L. Shapiro, attorneys at Epstein Becker Green, have a post on the Financial Services Employment Law blog that will be of interest to many of our readers: “NLRB Finds a Non-Union Employee’s Foul-Mouthed Complaining About Clients Protected Activity and Slams Employer’s Separation Agreement.”

Following is an excerpt:

A recent National Labor Relations Board (“NLRB”) decision by an Administrative Law Judge (“ALJ”) found numerous violations of the National Labor Relations Act (the “Act”) stemming from the reaction of a mortgage brokerage firm to a conversation in which one of its bankers used profanity and complained about a client in an office restroom.  While this decision may seem extreme to some, it is also an example of the expansive view that the NLRB is taking in deciding what types of employee communication and activities, particularly with respect to non-unionized workforces, will be found to be protected by the Act as “concerted activity” relating to employees’ terms and conditions of employment.

Read the full post here.

Department of Labor Releases New Persuader Rule Intended to Aid Union Organizing

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The US Department of Labor has finally issued its long awaited Final Rule radically reinterpreting the “Advice Exemption” to the Labor Management Reporting and Disclosure Act of 1959 (“LMRDA.”).  The Final Rule eviscerates any meaningful use of the Advice Exemption, which would be swallowed up by the new expansive definition of persuader activity which could include discussion regarding strategy, reviews of employer drafts and myriad other ways labor attorneys currently aid their clients including essentially any meaningful advice or counsel provided by labor counsel. The move comes just over two years to the day from the DOL’s 2014 postponement of its issuance of the Final Rule.

The Advice Exemption

For over 50 years this Advice Exemption has been properly, effectively and simply administered by distinguishing direct communications with employees from an attorney’s counsel to an employer-client.  The existing regulations have provided a clear line of demarcation; as long an employer’s lawyer or consultant did not communicate directly with employees and as long as the employer remained free to accept or reject any draft materials prepared by them (speeches, letters, written communications, etc.), they were covered by the Advice Exemption and not subject to disclosure or reporting by the employer or the counselor.

The Final Rule will, for the first time, require employers and their outside law firms to file frequent reports concerning their relationships more frequently than under current law. Employers and their consultants must now file reports only when consultants have communicated directly with workers. But under the new rule, they will have to file reports even if the consultants are giving certain guidance to the employer without speaking or otherwise directly communicating with employees.

Although the most visible impact of the Final Rule is likely to be in connection with union organizing efforts and employer attempts to counter union promises and messages, the Final Rule is potentially much broader and may ultimately be deemed by the DOL to require employers to disclose information about a much wider range of consultants and others who they rely upon for training, communication and other activities.

Why Has the DOL Issued This Final Rule?

While the DOL claims the rule is necessary to provide workers with information it believes they need, many others believe the real goal is to assist unions in organizing.

According to Secretary of Labor Thomas Perez, “The final rule  .  . .  is designed to ensure workers have the information they need to make informed decisions about exercising critical workplace rights such as whether to form a union or join a union.”

The rule, first proposed by the Labor Department in 2011, will require employers and third-party lawyers and other labor consultants to disclose their relationships more frequently than under current law. Employers and their consultants must now file reports only when consultants have communicated directly with workers. But under the new rule, they will have to file reports even if the consultants are giving certain guidance to the employer without contacting employees directly.

What Comes Next

The new Final Rule, which was first proposed by the Obama Administration in June 2011, has been the subject for the past five years of intense criticism of everyone from Senators, to both employer and employee rights groups, to the American Bar Association raising serious ethical, economic and practical concerns. One consistent objection was the fact that the altered Advice Exemption contained first in the Proposed Rule and now in the Final Rule seriously interferes with and compromises the attorney-client relationship and mandates the release and disclosure of information long understood to be protected by the attorney-client, work product and other legal privileges.

It is almost certain that there will be immediate challenges in the Courts to the Final Rule as going far beyond what Congress had in mind when it passed the LMRDA almost 60 years ago, and as unwarranted and impermissible intrusion on the attorney-client relationship.

NLRB Finds Computer Use Rule Interfered with Union Election – Employment Law This Week

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A featured story on Employment Law This Week is the NLRB’s crackdown on employers restricting the content of personal emails sent through the employer’s email system.

In 2014, the NLRB ruled that employees who have email through their employers can use that email to communicate about union-related issues. In a recent election at Blommer Chocolate Company, the union claimed that company email rules interfered with the voting process. Employees were allowed to use the company’s email system for personal emails, but were prohibited from expressing personal opinions in their emails to coworkers. The NLRB found that this rule interfered with elections and that a second election should occur. One of the questions that arises from this ruling is the issue of where the line is between what employers can prohibit – harassment, for example – and what they cannot.

View the episode below or read more about the NLRB’s ruling in an earlier blog post.

NLRB Rejects Employer’s Attempt to Restrict Content of Employees’ Emails Sent Over the Employer’s Email System

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The recent decision by the National Labor Relations Board (“NLRB” or the “Board”) in Blommer Chocolate Company of California (PDF) addresses one of the issues left open in the wake of the Board’s earlier ruling in Purple Communications, Inc. – namely, the extent to which an employer may regulate the content of its employees’ emails sent over the workplace email system.  In Purple Communications, the Board concluded that an employee who is permitted to use the employer’s email system for non-work purposes is presumptively permitted to use that email system (during non-work time) to communicate with others about union-related issues.  While the Board did preserve an employer’s right to monitor its email system for “legitimate management reasons,” such as ensuring productivity or preventing harassment, it did not expressly define the contours of an employer’s ability to regulate the content of employees’ emails sent over the workplace email system.

In Blommer Chocolate Company of California, the Board addressed this very issue, and concluded that a work rule that allowed employees to use their work computers for personal reasons but prohibited them from expressing any personal opinions in their emails was impermissibly overboard.  The Board further concluded that this objectionable work rule (along with two others) interfered with a representation election, and directed that a second election take place.

Given the somewhat extreme nature of the work rule at issue in Blommer, the Board did not engage in much analysis before finding it overbroad.  Nonetheless, this decision demonstrates the Board’s willingness to review (and potentially invalidate) employers’ attempts to regulate or control the content of emails exchanged over the workplace email system.  It remains to be seen whether the Board will scrutinize an employer’s email usage rules in the same way that it has reviewed corporate social media policies in the last few years.  For example, will a work rule prohibiting an employee from using profanity in emails sent over the workplace email system be found to unlawfully restrict employees’ statutorily protected communication rights?  Indeed, as the Board and Second Circuit have recently made clear, employees’ Facebook and social media activity does not lose its protected status merely because it contains profanity.  Similarly, would work rules that attempt to regulate employees’ tone over email, or instruct employees to remain mindful that their communications reflect on their employer’s image withstand Board scrutiny?

As this area of the law continues to develop, employers should review their existing policies and practices regarding their employees’ use of the workplace email system, and give particular consideration to any policies or practices that restrict, regulate, or otherwise limit the content of employees’ emails.