The Trump Corp. (02-CA-183801)

United States Government

National Labor Relations Board

OFFICE OF THE GENERAL COUNSEL

Advice Memorandum

DATE:

October 31, 2017

TO:

Nicholas H. Lewis, Acting Regional Director

Region 2

FROM:

Jayme L. Sophir, Associate General Counsel

Division of Advice

SUBJECT: The Trump Corporation a/k/a The Trump

Organization, Inc., and Donald J. Trump for

President, Inc.

Case 02-CA-183801

Trump for America, Inc.

Case 02-CA-191078

280-8650

512-5012-0125-0000

240-0150

240-0167-6700-0000

177-2401-6750-0000

The Region submitted these cases for advice concerning whether Donald J.

Trump for President, Inc. (“Trump Campaign”); Trump for America, Inc. (“Trump

Transition”); and The Trump Organization, Inc., and related charged parties,

promulgated and maintained unlawfully overbroad work rules in violation of Section

8(a)(1), and whether the Board has jurisdiction over the Trump Campaign and the

Trump Transition. We conclude that the charges should be dismissed, absent

withdrawal.

The Trump Campaign is the Federal Election Commission-registered political

action committee supporting the Republican Party ticket of Donald Trump and Mike

Pence in the 2016 United States Presidential Election. The Trump Organization is

the privately-held international conglomerate composing the business interests of

Donald Trump and his family. The Trump Transition was an organization

established under Section 501(c)(4) of the Internal Revenue Code to prepare for the

new administration’s leadership following President Trump’s election victory

Pence in the 2016 United States Presidential Election. The Trump Organization is

the privately-held international conglomerate composing the business interests of

Donald Trump and his family. The Trump Transition was an organization

established under Section 501(c)(4) of the Internal Revenue Code to prepare for the

new administration’s leadership following President Trump’s election victory.

On September 2, 2016,1 the Committee to Preserve the Religious Right to

Organize (the “Charging Party”) filed a charge alleging that the Trump Organization

violated Section 8(a)(1) by promulgating and maintaining overbroad work rules in a

document (the “Confidentiality Agreement”) that purports to bind any employees,

independent contractors, and volunteers to various confidentiality, non-

disparagement, and mandatory arbitration provisions, among others. On September

1 All dates hereinafter are in 2016 unless otherwise indicated.

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16, the Charging Party amended the charge to name the Trump Campaign as an

additional charged party, and further amended the charge on November 21 to include

certain Trump family members and a thirty-four page list of Trump-related business

entities. The November 21 amended charge further alleged that the terms of the

Confidentiality Agreement apply to the Trump Campaign, the Trump Organization,

and all of the additional charged parties or, alternatively, that the charged parties are

joint employers, single employers, and/or single integrated enterprises. On January

9, 2017, the Charging Party filed a separate charge against the Trump Transition,

alleging that certain work rules contained in its Code of Ethical Conduct are

unlawfully overbroad, in violation of Section 8(a)(1)

ation,

and all of the additional charged parties or, alternatively, that the charged parties are

joint employers, single employers, and/or single integrated enterprises. On January

9, 2017, the Charging Party filed a separate charge against the Trump Transition,

alleging that certain work rules contained in its Code of Ethical Conduct are

unlawfully overbroad, in violation of Section 8(a)(1).

Regarding the allegation against the Trump Campaign, we conclude that, even

assuming that the Board has jurisdiction over that entity and that the Confidentiality

Agreement contains overbroad work rules that have been applied to statutory

employees at some point within the 10(b) period, it would not effectuate the policies

and purposes of the Act to issue complaint. First, the Trump Campaign was created

for a specific and limited purpose, its primary function ended with the election, and

there is no evidence that it has employed workers covered by the Act since November

15. The Trump Campaign acknowledges that it had 200 paid employees at its peak

staffing level in the ninety days prior to the election, all of whom were required to

adhere to the allegedly unlawful Confidentiality Agreement, but asserts that it has

not employed any statutory employees since November 15 and does not anticipate

altering current staffing levels. Rather, it states that its remaining fourteen

employees are “managerial employees” excluded from the Act’s coverage.2 The Board

defines “managerial employees” as those who “formulate and effectuate high-level

employer policies,” have “discretion in the performance of their jobs independent of

their employer’s established policy,” and/or otherwise take or recommend

“discretionary actions that effectively control or implement employer policy.”3 The

Charging Party has provided no evidence to suggest that the fourteen remaining

2 See, e.g., NLRB v. Bell Aerospace Co., 416 U.S

nd effectuate high-level

employer policies,” have “discretion in the performance of their jobs independent of

their employer’s established policy,” and/or otherwise take or recommend

“discretionary actions that effectively control or implement employer policy.”3 The

Charging Party has provided no evidence to suggest that the fourteen remaining

2 See, e.g., NLRB v. Bell Aerospace Co., 416 U.S. 267, 289 (1974) (concluding that “the

Board’s early decisions, the purpose and legislative history of the [Act], the Board's

subsequent and consistent construction of the Act for more than two decades, and the

decisions of the courts of appeals all point unmistakably to the conclusion that

‘managerial employees’ are not covered by the Act”); Columbia University, 364 NLRB

No. 90, slip op. at 5 (Aug. 23, 2016) (giving employee status to managers, who would

be expected to be on the employer’s side in bargaining, would violate the NLRA’s

“design and purpose of facilitating fairness in collective bargaining” by “eviscerat[ing]

the traditional distinction between labor and management”).

3 Wolf Creek Nuclear Operating Corp., 364 NLRB No. 111, slip op. at 3 (Aug. 26, 2016)

(internal quotations omitted).

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staffers are statutory employees, and there is no reason to question the Trump

Campaign’s assertion that this small group of staffers are all managerial employees.

Second, the Charging Party does not purport to have filed its charge on behalf of

any of the Trump Campaign’s employees. While the Board administers public policy

and its processes may be invoked by any person who believes such policies have been

violated,4 the absence of any connection between the Charging Party and any Trump

Campaign employees further supports exercising the General Counsel’s Section 3(d)

prosecutorial discretion to decline to issue a complaint here

of

any of the Trump Campaign’s employees. While the Board administers public policy

and its processes may be invoked by any person who believes such policies have been

violated,4 the absence of any connection between the Charging Party and any Trump

Campaign employees further supports exercising the General Counsel’s Section 3(d)

prosecutorial discretion to decline to issue a complaint here.

We similarly conclude that the allegation against the Trump Organization and

related charged parties should be dismissed on non-effectuation grounds. The

Charging Party has submitted no evidence indicating that the Trump Organization or

related charged parties has ever applied the Confidentiality Agreement to statutory

employees. In this regard, we note that the employee handbook used by the Trump

International Hotel, Las Vegas (Case 28-CA-176943), one of the businesses within the

Trump Organization, contains none of the Confidentiality Agreement’s allegedly

unlawful work rules. In addition, the Charging Party does not purport to have filed

the charge on behalf of any particular Trump Organization employees.5

Finally, as to the charge against the Trump Transition, we conclude that, even

assuming the Board has jurisdiction over that entity and that the Code of Ethical

Conduct has been applied to statutory employees,6 the charge lacks merit because the

rules are not unlawfully overbroad. The mere maintenance of an overly broad work

rule violates Section 8(a)(1) because it “tends to inhibit or threaten employees who

desire to engage in legally protected activity but refrain from doing so rather than

risk discipline.”7 The Board has developed a two-step inquiry to determine if a work

4 See, e.g., Castle Hill Health Care Center, 355 NLRB 1156, 1190 (2010) (anyone may

file a charge with the Board); NLRB v. Ind. & Mich. Elec. Co., 318 U.S. 9, 17-18 (1943)

(even a “stranger” to the dispute may file a Board charge)

e to engage in legally protected activity but refrain from doing so rather than

risk discipline.”7 The Board has developed a two-step inquiry to determine if a work

4 See, e.g., Castle Hill Health Care Center, 355 NLRB 1156, 1190 (2010) (anyone may

file a charge with the Board); NLRB v. Ind. & Mich. Elec. Co., 318 U.S. 9, 17-18 (1943)

(even a “stranger” to the dispute may file a Board charge).

5 Moreover, the Charging Party’s claim that the Trump Organization and related

charged parties are joint or single employers with the Trump Campaign is also

without evidentiary support.

6 We note that the Charging Party found the unsigned Code of Ethical Conduct as a

stand-alone document without any context on a news website, and could provide no

evidence that it had been applied to statutory employees.

7 Beverly Health & Rehabilitation Services, 332 NLRB 347, 349 (2000), enforced, 297

F.3d 468 (6th Cir. 2002). See also Lafayette Park Hotel, 326 NLRB 824, 825 (1998)

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rule would reasonably tend to chill protected activities.8 First, a rule is clearly

unlawful if it explicitly restricts Section 7 activities. Second, if it does not, the rule

will violate Section 8(a)(1) only upon a showing that: (1) employees would reasonably

construe the language to prohibit Section 7 activity; (2) the rule was promulgated in

response to union activity; or (3) the rule has been applied to restrict the exercise of

Section 7 rights.9 In determining how an employee would reasonably construe a rule,

particular phrases should not be read in isolation, but rather considered in context.10

Rules that are ambiguous as to their application to Section 7 activity and contain no

limiting language or context that would clarify to employees that the rule does not

restrict Section 7 rights are unlawful.11 Indeed, any ambiguity in an employer’s rule

(finding that the mere maintenance of a rule that would reasona

rases should not be read in isolation, but rather considered in context.10

Rules that are ambiguous as to their application to Section 7 activity and contain no

limiting language or context that would clarify to employees that the rule does not

restrict Section 7 rights are unlawful.11 Indeed, any ambiguity in an employer’s rule

(finding that the mere maintenance of a rule that would reasonably have a chilling

effect on employees’ Section 7 activity violates Section 8(a)(1)), enforced mem., 203

F.3d 52 (D.C. Cir. 1999).

8 Lutheran Heritage Village-Livonia, 343 NLRB 646, 646-47 (2004). See generally

Memorandum GC 15-04, “Report of the General Counsel Concerning Employer

Rules,” dated Mar. 18, 2015.

9 343 NLRB at 646-47. In Lutheran Heritage, the Board expressly warned that it will

not conclude that a reasonable employee would read a rule to apply to Section 7

activities “simply because the rule could be interpreted that way.” Id. at 647

(emphasis in original).

10 Id. at 646.

11 Compare 2 Sisters Food Group, 357 NLRB 1816, 1817 (2011) (finding rule that

subjected employees to discipline for “inability or unwillingness to work harmoniously

with other employees” unlawful, absent definition of “work harmoniously,” because

rule was sufficiently imprecise that it would encompass any disagreement or conflict

among employees, including discussions or interactions protected by Section 7), and

University Medical Center, 335 NLRB 1318, 1320-22 (2001) (finding work rule that

prohibited “disrespectful conduct towards [others]” unlawful because it included “no

. . . limiting language [that] removes [the rule’s] ambiguity and limits its broad

scope”), enforcement denied in relevant part sub nom. Cmty. Hosps. of Cent. Cal. v.

NLRB, 335 F.3d 1079 (D.C. Cir

protected by Section 7), and

University Medical Center, 335 NLRB 1318, 1320-22 (2001) (finding work rule that

prohibited “disrespectful conduct towards [others]” unlawful because it included “no

. . . limiting language [that] removes [the rule’s] ambiguity and limits its broad

scope”), enforcement denied in relevant part sub nom. Cmty. Hosps. of Cent. Cal. v.

NLRB, 335 F.3d 1079 (D.C. Cir. 2003), with Copper River of Boiling Springs, LLC,

360 NLRB 459, 459 n.3, 471 (2014) (finding rule prohibiting “lack of respect and

cooperation with fellow employees or guests” lawful, because there was sufficient

limiting language to clarify that challenged rule only prohibited unprotected conduct

that interfered with employer’s legitimate business concerns).

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is construed against the employer as the promulgator of that rule.12 In contrast, rules

that clarify and restrict their scope by including examples of clearly illegal or

unprotected conduct, such that they would not reasonably be construed to cover

protected activity, are not unlawful.13

The Code of Ethical Conduct contains twelve numbered rules, which address,

among other things, conflicts of interest, lobbying activities as defined by the

Lobbying Disclosure Act, use of non-public information, use of federal property,

receipt of gifts, and representation of foreign governments or political parties. The

Charging Party alleges four provisions to be unlawful, two of which (Items 6 and 7)

restrict the use of “non-public information,” and two of which (Items 8 and 9) restrict

appearances before federal departments or agencies:

6.

I

will

keep

confidential

any

non-public

information

provided to me in the course of my duties with the transition and

will use such information exclusively for purposes of the

transition.

7

to be unlawful, two of which (Items 6 and 7)

restrict the use of “non-public information,” and two of which (Items 8 and 9) restrict

appearances before federal departments or agencies:

6.

I

will

keep

confidential

any

non-public

information

provided to me in the course of my duties with the transition and

will use such information exclusively for purposes of the

transition.

7.

I will not use or permit to be used any non-public

information provided to me in the course of my duties with the

transition, in any manner, for any private gain for myself or any

other party, at any time during or after the transition.

8.

During my service with [the Trump Transition], I will not,

on behalf of any person or entity, communicate with or appear

before, for compensation, any federal department or agency

seeking official action for such person or entity with respect to a

particular matter for which I have direct and substantial

responsibility as part of [the Trump Transition].

9.

If Donald J. Trump wins the election and I continue

working with [the Trump Transition], for 6 months after I leave, I

will not on behalf of any other person or entity communicate with

or appear before, for compensation, any federal department or

12 Lafayette Park Hotel, 326 NLRB at 828 (citing Norris/O’Bannon, 307 NLRB 1236,

1245 (1992)).

13 See Tradesmen International, 338 NLRB 460, 460-62 (2002) (determining that

prohibition against “disloyal, disruptive, competitive, or damaging conduct” would not

be reasonably construed to cover protected activity, given rule’s focus on other clearly

illegal or egregious activity and absence of any application against protected activity).

radesmen International, 338 NLRB 460, 460-62 (2002) (determining that

prohibition against “disloyal, disruptive, competitive, or damaging conduct” would not

be reasonably construed to cover protected activity, given rule’s focus on other clearly

illegal or egregious activity and absence of any application against protected activity).

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agency seeking official action for such person or entity with

respect to a particular matter for which I had direct and

substantial responsibility during my service with [the Trump

Transition].

We conclude that Items 6 and 7 of the Code of Ethical Conduct are facially

lawful. Both rules require staff to keep non-public information obtained in the course

of their duties with the Trump Transition confidential. A confidentiality rule that

broadly encompasses “employee” or “personnel” information, without further

clarification, will reasonably be construed by employees to restrict Section 7-protected

communications.14 In contrast, broad prohibitions on disclosing confidential

information have been found lawful when they did not reference information

regarding employees, wages, or anything that would reasonably be considered a term

or condition of employment, because employers have a substantial and legitimate

interest in maintaining the privacy of certain business information.15

Here, although Items 6 and 7 broadly restrict the use of non-public information,

they contain no references to employees or anything that employees would reasonably

consider to be a term or condition of employment

bly be considered a term

or condition of employment, because employers have a substantial and legitimate

interest in maintaining the privacy of certain business information.15

Here, although Items 6 and 7 broadly restrict the use of non-public information,

they contain no references to employees or anything that employees would reasonably

consider to be a term or condition of employment. Moreover, both rules limit the non-

public information employees are prohibited from using to that which is provided to

employees “in the course of [their] duties with the transition.” For these reasons,

employees would not reasonably construe the “non-public information” prohibition to

encompass Section 7-related information concerning employees, wages, or other terms

and conditions of employment.16 Furthermore, although Item 7’s language

concerning “private gain for myself or any other party” could be interpreted to refer to

employee attempts to secure more favorable wages or working conditions, employees

14 See Schwan’s Home Service, 364 NLRB No. 20, slip op. at 2-3 (June 10, 2016) (rule

prohibiting disclosing information concerning customers, vendors or “employees”

unlawful); Flamingo-Hilton Laughlin, 330 NLRB 287, 288 n.3, 291-92 (1999) (rule

prohibiting revealing confidential information about customers, “fellow employees,” or

the business unlawful).

15 See Lafayette Park Hotel, 326 NLRB 824 at 826 (rule prohibiting divulging “Hotel-

private information” lawful); Super K-Mart, 330 NLRB 263, 263-64 (1999) (rule

prohibiting disclosing of “company business and documents” lawful).

16 Cf. Verizon Wireless, 365 NLRB No. 38, slip op. at 2-3 (Feb. 24, 2017) (finding rule

unlawful, in part, because it prohibited employees from “disclosing nonpublic

company information,” which, in the context of that particular rule and in the absence

of any limiting language, implicated terms and conditions of employment).

l).

16 Cf. Verizon Wireless, 365 NLRB No. 38, slip op. at 2-3 (Feb. 24, 2017) (finding rule

unlawful, in part, because it prohibited employees from “disclosing nonpublic

company information,” which, in the context of that particular rule and in the absence

of any limiting language, implicated terms and conditions of employment).

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would more reasonably construe that language to refer to conduct unrelated to

Section 7 activity, i.e., using confidential information for personal enrichment. This

construction of the rule is further supported when viewed in context, as the other

items in the Code of Ethical Conduct address legal and ethical issues that are

unconnected to Section 7 activity.17

We also conclude that Items 8 and 9 of the Code of Ethical Conduct are facially

lawful. The Charging Party asserts that these rules would prevent an employee from

leaving the Trump Transition to work for a union, for instance by salting.18 No

reasonable employee would interpret these rules to prohibit salting, as they do not

even implicitly reference organizing an employer on behalf of a labor union. These

rules do place some limits on employees’ rights to “communicate with or appear”

before a federal agency, and, in other contexts, restrictions on employees’ access to

federal agencies have been found unlawful.19 However, the rules clearly only prohibit

a paid communication, on behalf of others, on a matter that would present a conflict

of interest given the employee’s work while employed by the Trump Transition.

Viewed in this context, including the types of restrictions contained elsewhere in the

Code of Ethical Conduct, employees would not reasonably construe Items 8 and 9 to

restrict their ability to vindicate their protected workplace rights, or to generally

assist other employees, before federal agencies

nt a conflict

of interest given the employee’s work while employed by the Trump Transition.

Viewed in this context, including the types of restrictions contained elsewhere in the

Code of Ethical Conduct, employees would not reasonably construe Items 8 and 9 to

restrict their ability to vindicate their protected workplace rights, or to generally

assist other employees, before federal agencies.

17 See, e.g., NPC International, Inc., d/b/a Pizza Hut, Case 15-CA-105178, Advice

Memorandum dated Dec. 3, 2013, at 11 (finding provision prohibiting disclosure of all

“information acquired in the course of one’s work” to be lawful, because it did not

reference “employees” or similar phrases that would chill employee discussion of

wages or other terms or conditions of employment, and it was situated among other

rules and language that restricted use of proprietary business information and did not

touch upon Section 7 activity).

18 “Salting” involves a union paying an individual to work at a non-union employer

with the goal of spurring union organizing efforts there. See, e.g., NLRB v. Town &

Country Elec., 516 U.S. 85, 96-97 (1995).

19 See U-Haul Co. of California, 347 NLRB 375, 377-78 (2006) (provision requiring

employees to arbitrate all disputes, including any “legal . . . claims and causes of

action recognized by . . . federal law or regulations,” interfered with employees’ right

to access Board processes in violation of Section 8(a)(1)), enforced, 255 F. App’x 527

(D.C. Cir. 2007); see also NLRB v. Scrivener, 405 U.S. 117, 121 (1972) (Congress

sought for employees to be “completely free” to file charges with the Board, participate

in a Board investigation, or to testify at a Board proceeding).

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In accordance with the foregoing, the charges should be dismissed, absent

withdrawal.

/s/

J.L.S.

H:ADV.02-CA-183801.Trump.

(b) (6), (b)