Whenever I present on franchise issues, at least one audience member invariably raises a question respecting what franchisors and franchisees can and cannot do vis-a-vis monitoring and controlling the discussions of their employees. A recent decision from an Atlanta Administrative Law Judge with the National Labor Relations Board (Laurus Technical Institute, Case 10-CA-093934) reminds us that the answer is “very little”.
The Laurus Technical Institute is a for-profit technical school with 3 campus locations in the Greater Atlanta area. Laurus first had an oral “no gossip” policy, pursuant to which employees were prohibited from discussing any work issues with anyone other than their supervisor or the CEO of Laurus. Later, Laurus added a written “no gossip” policy to its employee handbook. The written policy stated that “Gossip is not tolerated at Laurus”. Gossip was defined to include things such as:
- Talking about a person’s personal life when they are not present.
- Talking about a person’s professional life without his or her supervisor being present.
- Negative, untrue or disparaging comments or criticisms of another person or persons.
Consequences of violating the policy included placing a written letter of reprimand in the employee’s personnel file all the way up to termination. A senior employee of Laurus’ admissions department was fired, in part for violating the “no gossip” policy.
In her opinion, Administrative Law Judge Dawson concluded that the “no gossip” policies, oral and written, violated the National Labor Relations Act (the “Act”) because they were overbroad. Judge Dawson explained that the written policy in particular “narrowly prohibits virtually all communications about anyone, including the company or its managers”. Thus, Judge Dawson concluded that the policy would “reasonably chill” employees ability to engage in protected, concerted activities designed to promote mutual aid or protection.
Because Laurus terminated an employee for violating an illegal policy, it was ordered to reinstate the employee with full benefits and back pay. Laurus was further ordered to remove any reference to the policy from its employee handbooks and prominently post notices around its offices stating that the “no gossip” policy was no longer valid and would not be enforced.
While the Laurus decision is on appeal, it provides another reminder that the NLRB is on heightened watch for what it perceives to be violations of the Act by employers who attempt to limit employee speech. In that way, the Laurus decision is like the Advice Memorandum the NLRB issued in American Medical Response, where the Board advised that a company rule against making “disparaging comments” about supervisors and coworkers online was unlawful. The bar for prohibiting such discussions remains very high. The few policies that have been approved by the Board usually involve clearly illegal things such as harassment, abuse, intimidation or coercion.
The Takeaway: All employers need to have policies that permit, and adequate training of supervisors to ensure, employees may reasonably discuss work matters in person and online, even if those discussions are negative or disparaging. Moreover, as any such cases involving franchisees almost invariably involve the franchisor as well, franchisors should take care to ensure their franchisees are aware of the potential legal consequences of failing to obey the law.