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NLRB Judge Strikes Down Moonlighting Rule

A National Labor Relations Board Administrative Law Judge has invalidated an employer’s work rule prohibiting employees from working another job without the company’s approval. Nicholson Terminal & Dock Co., Case No. 07-CA-187907 (May 16, 2018).  Judge Elizabeth Tafe held that the  rule could be interpreted to prohibit employees from working for a union outside of working time and, therefore, unlawfully interfered with employee Section 7 rights.

The rule at issue was included in the company’s “Personnel Handbook, and read as follows:

Employees are expected to devote their primary work efforts to the Company’s business. Therefore, it is mandatory that they do not have another job that:
▪ Could be inconsistent with the Company’s interests.
▪ Could have a detrimental impact on Company’s image with customers or the public.
▪ Could require devoting such time and effort that the employee’s work would be adversely affected.
Before obtaining any other employment, you must first get approval from the Company Treasurer.

Applying the Board’s new balancing test for evaluating the lawfulness of facially neutral work rules, as set forth in The Boeing Company, 365 NLRB No. 154 (2017), Judge Tafe found that the employer’s justification for the rule did not outweigh the impact it had on Section 7 rights. Although the judge conceded that the employer had a legitimate interest in prohibiting employees from working for competitors and reducing the risk of fatigue, she concluded that the company could have achieved it goals with a more narrowly tailored rule.  Specifically, the vaguely worded prohibition on work that “could be inconsistent with the Company’s interests” or that “could have a detrimental impact on Company’s image” could be read to prohibit employees from working as union salts or supporting a union in a labor dispute during non-work time.

The Nicholson Terminal & Dock Co. decision is only an ALJ decision, and could very well be reversed by the NLRB on appeal. Nevertheless, it serves as a stark reminder that employers must remain cautious when drafting work rules, and must carefully craft language so as to avoid any impingement on the rights of employees to organize, associate, and affiliate with other employees and participate in union activity on non-work time without their employer’s interference.

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