Last week, the National Labor Relations Board’s Office of General Counsel released this Advice Memorandum. It involves a Missouri law firm that required all newly-hired support staff and attorneys to sign an employment agreement containing the following non-disparagement provision:
“[D]uring and after Employee’s employment or association with Law Firm ends, for any reason, Employee will not in any way criticize, ridicule, disparage, libel, or slander Law Firm, its owners, its partners, or any Law Firm employees, either orally or in writing. However, nothing in this Section 3.2 shall be deemed to limit or prohibit Employee from engaging in concerted group activity and communications with co-employees to try to improve his or her working conditions, as provided under Section 7 of the National Labor Relations Act.”
The law firm took this provision seriously, Indeed, it ended up suing two former employees in state court alleging that they had violated the non-disparagement provision after making negative posts about the law firm on Glassdoor.
Some could view this as having a chilling effect on recruitment and retention. But, that’s not the point of this post. Rather, the focus here is whether the non-disparagement provision is illegal. And, according to Jayme L. Sophir, Associate General Counsel, it is because it infringes on employee’s rights to engage in Section 7 activity also known as protected concerted activity. Section 7 activity involves the right employees have to act together to try to improve their pay and working conditions, with or without a union. (There was no union here.)
Here is why this rule is unlawful, according to the Board’s Associate General Counsel:
The requirement that employees not “criticize, ridicule, [or] disparage” the Employer restricts core Section 7 activity. The rule is not limited to criticism of other employees, or the Employer’s products and services, which would not have the same impact on Section 7 activity. The Employer’s asserted interest in maintaining the rule, that it relies on its online reputation to advertise for clients and that negative reviews could hurt its business prospects, is not a unique interest nor strong enough to outweigh the significant interference the rule has with employee rights.
So, if the law firm had narrowed the non-disparagement provision to relate solely to disparaging co-workers and the products or services of the law firm, it could have survived Board scrutiny.
But what about that extra language at the end of the non-disparagement provisions, what we often refer to as a savings clause:
However, nothing in this Section 3.2 shall be deemed to limit or prohibit Employee from engaging in concerted group activity and communications with co-employees to try to improve his or her working conditions, as provided under Section 7 of the National Labor Relations Act.
Why doesn’t that save the employer here? I’ll let the Associate General Counsel explain:
The purported “savings clause” does not make the rule lawful. For a clause to cure a workplace rule that otherwise has an unlawful impact on Section 7 rights, the Board has said that the clause must do more than generally refer to the Act or Section 7 rights. An effective savings clause should address “the broad panoply of rights protected by Section 7” as well as be prominent and proximate to the rule that it purports to inform. While the clause here does include a plain language explanation of Section 7 activities that a reasonable employee would understand (“concerted group activity and communications with co-employees to try to improve his or her working conditions”), it does not include the “full panoply” of rights protected by Section 7. For example, the clause only addresses communications with “co-employees” and does not include third parties, such as unions. Therefore, a reasonable employee would still understand the Employer’s non-disparagement clause as prohibiting him or her from going to a union and saying anything negative about the Employer.
Perhaps ironically, in the same advice memo, the Board’s Associate General Counsel concluded that the folks posting bad reviews on Glassdoor about the law firm were not engaged in Section 7 activities and the law firm did not sue these individuals because they engaged in Section 7 activities (i.e., no retaliation). Rather, the mere maintenance of the rule violated the National Labor Relations Act.
It appears; however, that this case between the law firm and the Board has since settled.
Lots of takeaways here for employers. But, most notably, be careful about workplace rules that have the intent or effect of chilling employees from discussing working conditions with one another. I recognize that’s not always easy. But, this situation shows that even a law firm can find itself in the Board’s crosshairs.