NLRB Declares Chipotle Company Policies Unlawful

posted by Michael R. Fortney  |  Apr 19, 2016 09:52 AM in Employment Law

An Administrative Law Judge (ALJ) for the National Labor Relations Board (NLRB) issued her ruling in the Chipotle case last month, holding that Chipotle’s policies and actions violated the National Labor Relations Act (NLRA). Specifically, the NLRB held that Chipotle violated Section 8(a)(1) of the NLRA by maintaining unlawful policies in its handbook, prohibiting employees from engaging in concerted activity, and terminating an employee for engaging in concerted activities.

Section 8 of the NLRA makes it unlawful for an employer to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” Section 7 of the NLRA gives employees rights to organize, including forming or joining labor organizations and engaging in other concerted activities.

Chipotle maintains a number of policies that the ALJ took issue with and declared unlawful: its social media policy, solicitation policy, confidential information policy, ethical communications policy, and political activity policy. The ALJ found that each of these policies, as written, violate the NLRA and are therefore unlawful.

The Chipotle case involved an employee who used Twitter to make statements about his employer, including statements regarding his and other employees’ hourly wages. Chipotle noticed the tweets and asked the employee to take them down, because Chipotle said the tweets violated the social media policy the employee had agreed to upon being hired. After being asked to delete the tweets, the employee began to collect fellow employees’ signatures on a petition to demand that they be allowed to take their breaks as allowed by Chipotle’s company policy. The employee was collecting signatures of fellow employees before the restaurant was open and was confronted by a manager. The manager told the employee to stop circulating the petition, the employee refused, and the manager told the employee to leave. The employee was subsequently terminated.

The employee sued Chipotle over a number of issues. First was whether Chipotle’s company policies violated the NLRA. Next was whether Chipotle violated the NLRA by asking the employee to delete tweets. Third was whether Chipotle violated the NLRA by prohibiting the employee from engaging in concerted activity (soliciting signatures from fellow employees). And finally whether Chipotle violated the NLRA by terminating the employee.

Chipotle’s company policies

Social Media Policy

The social media policy sections at issue were the following statements:  “If you aren’t careful and don’t use your head, your online activity can also damage Chipotle or spread incomplete, confidential, or inaccurate information;” and “You may not make disparaging, false, misleading, harassing or discriminatory statements about or relating to Chipotle, our employees, suppliers, customers, competition, or investors.” The ALJ held that these sections of Chipotle’s social media policy violate the NLRA for a number of reasons.

First, false, misleading, or disparaging statements may not be prohibited by employers unless they are made maliciously. Second, a prohibition on the use of “confidential information,” without first defining the term, is overly broad and could be interpreted by an employee as infringing on his Section 7 rights. Third, the policy contained a disclaimer statement that reads “This code does not restrict any activity that is protected or restricted by the National Labor Relations Act, whistleblower laws, or any other privacy rights,” but the ALJ found that the disclaimer is not a remedy for the unlawfulness of the other provisions.  The prohibitions against discriminatory or harassing statements were found to be lawful provisions.

Solicitation Policy

Chipotle’s Solicitation Policy reads as follows: “Employees are not to solicit or be solicited during their working time anywhere on company property, nor are they to solicit during non-working time in working areas if the solicitation would be within visual or hearing range of our customers.” The ALJ found that the prohibition on solicitation during “non-working time in working areas” violates the NLRA because it is overbroad. Solicitation in work areas during non-working time can only be prohibited where the solicitation would disrupt ordinary business.

Confidential Information Policy

The problematic section of Chipotle’s Confidential Information Policy reads: “The improper use of Chipotle’s name, trademarks, or other intellectual property is prohibited.” The ALJ ruled that this provision has a chilling effect on employees’ Section 7 rights because Chipotle did not define what “improper use” means. An employee could easily construe this provision to limit the employee from ever using the company name in Section 7 activities, which constitutes a violation of the NLRA

Ethical Communications Policy

The portion of the Ethical Communications Policy at issue reads: “avoid exaggeration, colorful language, guesswork, and derogatory characterizations of people and their motives.” The ALJ held that the exaggeration, guesswork, and derogatory characterizations sections all violate Section 8 because each of these types of statements could chill employees’ discussions of their supervisors.

Political Activity Policy

The statement at issue in Chipotle’s Political Activity Policy reads: “It is said that to avoid arguments, one should never discuss politics or religion in public—and in this case at work.” Since employees’ exercise of Section 7 rights often involves political activity, such as petitioning, this policy can easily be read to restrict employees’ Section 7 rights, and was determined to be unlawful.

Chipotle’s Request of Employee to Delete Tweets

The tweets at issue in the Chipotle case concerned subjects such as hourly workers being required to work snow days when other salaried workers do not and public transportation is shut down, wages for Chipotle employees, and differences in prices between Chipotle and Qdoba. Section 7 rights consist of the right to engage in concerted activities for mutual aid or protection. The ALJ held that the employee was engaging in concerted activities because the tweets concerned wages and working conditions. The ALJ held that the tweets concerned mutual aid or protection because the employee was seeking benefits for all employees, not just him individually. Since the employee was engaging in Section 7 activity, Chipotle’s request that the tweets be deleted was unlawful.

The ALJ also found that the request to delete the tweets indirectly made it clear to the employee that no further tweets were to be made, which was also a violation of the NLRA because it implicitly prohibited the employee from engaging in protected activities.

Prohibiting Employee from Engaging in Concerted Activity

The ALJ found that the Chipotle manager who directed the employee to stop petitioning fellow employees before beginning work violated the NLRA because her stated reason for asking the employee to stop petitioning was unlawful. The manager was not worried that the petitioning was happening during working hours for the two employees being petitioned, but instead was concerned about the employees’ reaction to the petition, which is not a basis to restrict Section 7 activities.

Terminating Employee

The ALJ found that all of the protected activities discussed earlier were what led the manager in this case to terminate the employee. The manager claimed that the reason was insubordination, but an employee cannot be terminated when the insubordination amounts to the exercise of Section 7 rights, as was the case here.

How this affects your company

Employers and businesses should take time to review their handbooks for policies that directly or indirectly infringe on employees’ rights to engage in activities protected by Section 7. The attorneys at Fortney Law Group are well versed in drafting employee handbooks and handbook provisions according to the latest cases. If you have a question regarding whether or not your company’s handbook conforms to the NLRB’s standards, or if you would like us to review or draft a compliant handbook for your business please visit our website.

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