Goodbye, No-Gossip Policies?

As the NLRB targets employee-communications policies that are overly broad or potentially ambiguous, experts say no-gossip policies are the next to come under similar scrutiny.

Tuesday, May 13, 2014
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A National Labor Relations Board administrative law judge recently ruled that Laurus Technical Institute, a for-profit technical school in Georgia, broke federal law with a no-gossip policy because it was overly broad, ambiguous and restricted employees from discussing or complaining about any terms and/or conditions of employment, even though nothing in the institute's policy directly addressed discussions about wages, hours or other employment terms and conditions.

Though the NLRB has been focused on other policies that could violate an employee's right to engage in protected concerted activity -- such as social media or confidentiality policies -- no-gossip policies can be especially problematic, says Kate Gold, a labor and employment partner at Drinker Biddle & Reath in Los Angeles.

She says that, while gossip policies are not typical at most organizations -- and often unnecessary -- some HR service providers (or similar advisors) still recommend them, and even provide templates for organizations to create their own.

"I would not include it among the top 10 or even the top 20 essential policies an employer should include in a handbook or policy manual, such as an at-will, anti-harassment or reasonable accommodation policy," she says. "However, given the type of concern raised by a no-gossip policy, there could be other employer policies that are problematic for the same reasons. The issue raised by an overbroad no-gossip policy is whether it constitutes an unlawful restriction on an employee's right to engage in protected concerted activity under Section 7 of the National Labor Relations Act."

If an employer does not already have a no-gossip policy, there is little incentive to adopt one, she says, especially given the NLRB's scrutiny of policies restricting employees' rights to discuss wages and working conditions. Employers should consider discarding a no-gossip policy or at least reviewing it for overly broad language or potential violations, Gold says.

"An employer should also consider how effective a policy can be in regulating age-old human behavior," she says. "If individuals are prone to gossip, a policy is not likely to stop that behavior and, while gossip can undermine workplace morale, so can policies that appear intrusive or unnecessarily heavy-handed.

"In the Laurus Technical Institute case," she says, "the policy provided that an employee could be disciplined or terminated for 'gossip,' which was defined in part as 'talking about a person's personal life when they are not present' or 'repeating a rumor about another person.'  Many employers reasonably could conclude that the difficulties in defending or enforcing this type of policy (both internally and at a potential NLRB proceeding) are more burdensome than is justified by the benefits."

An NLRB spokesperson declined to comment on either the issue or the recent decision, but did offer guidance from a decision in April on The Kroger Co. of Michigan's online-communications policy that an administrative law judge found to be overbroad.

Even in cases where gossip seems to create legitimate -- and costly - problems for organizations, the NLRB has found fault in no-gossip policies, as outlined in a post by Human Resource Executive Managing Editor Kristen B. Frasch. The hospital was found to be in violation of federal law with new work rules prohibiting negative comments and requiring all workers to represent the hospital "in the community in a positive and professional manner" -- even though back-biting, back-stabbing and gossiping at the acute-care hospital were linked to a loss of customers.

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Though they are not as common as other potentially troublesome policies, some industries, such as manufacturing or non-profits, still use no-gossip policies -- though they are sometimes couched within a code of conduct or similar document, says Bryan P. Neal, a partner at Thompson & Knight in Dallas.

"Rules similar to the Laurus policy, such as spreading 'negative, or untrue, or disparaging comments or criticisms of another person or persons' are more generally contained in an employer's general list of prohibited activities, or perhaps a code of conduct," he says. "Also, some employers' confidential information policies may contain prohibitions that could be construed as prohibiting gossip, such as restrictions against disclosing certain personnel information. Any of those policies should be on a list of policies for HR leader review."

Neal, who blogged about the Laurus case with Barbara-Ellen Gaffney, an attorney at the same firm, says employers should approach the issue cautiously and narrowly. "Falsehoods" may be one area where there is room for a policy, but even that is not safe ground, Neal says.

For example, the NLRB has previously upheld policies as lawful that prohibit abusive and profane language, harassment or conduct that is injurious, offensive or coercive of coworkers or clients.

"In the light of those decisions, I don't believe a specific prohibition against the dissemination of malicious falsehoods about fellow employees would run afoul of employees' NLRA Section 7 rights," he says. "I would also recommend that the policy both include examples of prohibited conduct, as well as clearly define permissible conduct such that it does not cause employees to refrain from engaging in protected activities.

"I do caution, however," he says, "that the NLRB has been quite active lately, and there is no guarantee that the NLRB or one of its administrative law judges would not find even such a narrowly drafted policy to be permissible in every situation."

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