Court of Appeals Supports Handbook Rule Urging, But Not Requiring, Employees to Take Their Complaints Directly to Their Supervisor

November 16, 2015

A recent decision by the D.C. Circuit U.S. Court of Appeals reversed in part the National Labor Relations Board’s order against a private-sector employer regarding its employee handbook employee-complaint provision finding that the handbook rule was lawful and did not implicate employees’ Section 7 rights under the National Labor Relations Act or otherwise prohibit employees from engaging in protected concerted activity by discussing their complaints with each other.

In Hyundai America Shipping Agency, Inc., D.C. Cir., No. 11-135111-1413 (11/6/15), the Court agreed that the NLRB properly invalidated three out of five handbook rules because they interfered with employees’ Section 7 rights.  However, the Court reversed the NLRB’s order to invalidate two handbook rules, one on jurisdictional grounds, and the other because it did not interfere with employees’ Section 7 rights.  The Court disagreed with the NLRB and found lawful the following handbook provision:

[Employees should] [v]oice your complaints directly to your immediate superior or to Human Resources… [and c]omplaining to your fellow employees will not resolve problems.

The Court found that this language did not prohibit complaints protected by Section 7.  Rather, the language urged employees to voice their complaints to management, but “is neither mandatory or preclusive of alternatives.”  Further, the Court pointed out that the rule did not prescribe penalties if an employee discussed complaints with a fellow employee.  Thus, “a reasonable employee would not read the provision, with its exhortatory language and lack of penalties, to prohibit complaints protected by Section 7.”

There is no bullet-proof handbook language for how employees handle their internal complaints.  A rule’s language, its context, and a particular court may arrive at different results.  Nevertheless, employers should carefully review their handbooks for provisions on how employees voice their complaints.  If a handbook rule requires, or can be reasonably interpreted to require, that internal complaints affecting employees’ rights are only to be discussed with management and/or provides penalties for not doing so, then consideration should be given to modify such language so as to avoid a future challenge.

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