WeWork Will Change Employee Handbook After Labor Board Dispute

(Bloomberg) -- WeWork Cos., the world's largest co-working startup, will change some sections of its employee handbook and tell workers that they have the right to form a union as part of a settlement in a National Labor Relations Board case.

The agreement, which WeWork signed Friday, comes after the labor board said in August that employees could interpret parts of the company's policies as forbidding them from engaging in legal activities, such as discussing wages and unionizing. One offending section of the handbook, titled "Do the Right Thing," told employees to weigh whether a situation may be unethical by asking themselves questions like, "How would I feel if it made headlines in news outlets?"

The New York company will e-mail employees and post notices in its offices around the U.S. saying federal law gives them the right to coordinate efforts with their colleagues and form unions, according to the settlement. A WeWork spokeswoman said the company doesn't believe its handbook prohibited employees from organizing but agreed to change the materials “to make sure this language is absolutely clear.”

Founded in 2010, WeWork has opened locations in about two dozen cities around the world, where members can rent desks or offices to work alongside freelancers, startups or remote staff of bigger companies. WeWork has raised more than $1.4 billion to fuel its swift rise, but there have been growing pains. It still faces at least one other labor board case involving former employee Tara Zoumer, who said she was fired after refusing to sign an arbitration agreement with the company. WeWork has said it believes the policy was lawful. The case is currently before the board awaiting a decision.

The changes to the employee handbook were welcomed by Seth Goldstein, a labor union representative who filed the original complaint. He said in a statement that the union, Local 153 of the Office and Professional Employees International Union, is "pleased that WeWork is finally being held accountable for violating federal labor law and will be required to maintain an open environment where employees have the freedom to speak out on work issues."

To contact the author of this story: Ellen Huet in San Francisco at ehuet4@bloomberg.net.

To contact the editor responsible for this story: Mark Milian at mmilian@bloomberg.net.