The NLRB Sets New Standard For Evaluating Employer Policies

Key Takeaways:

• The National Labor Relations Board ("NLRB") recently issued a decision that sets forth a new standard for evaluating whether employer policies and workplace rules comply with the National Labor Relations Act ("NLRA").
• Under the new standard, a workplace rule is presumed unlawful if it has a reasonable tendency to chill employees' exercise of their rights under Section 7 of the NLRA.
• An employer, however, can rebut this presumption if it can show that the workplace rule at issue is narrowly tailored to advance legitimate, substantial business interests that cannot be achieved with a more a narrowly-tailored rule.
• In light of the decision, employers should consider reviewing their policies and rules to ensure that they meet the NLRB's new standard.

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On August 2, 2023, the NLRB issued a decision in Stericycle, Inc., 372 NLRB No. 113 (2023) which adopts a new legal standard for evaluating whether employer workplace policies violate the NLRA. The decision supplants a more employer-friendly standard set by the Trump-era NLRB in 2017. In light of the decision, which impacts unionized and non-unionized workplaces alike, employers will want to review their policies and rules to ensure they pass muster under the Stericycle standard.

Under this new standard, the NLRB will now assess workplace rules by determining whether a challenged workplace rule has a reasonable tendency to dissuade (i.e. "chill") employees from exercising their rights under Section 7 of the NLRA. Section 7 of the NLRA gives employees the right to form and participate in labor organizations, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid. When assessing the employer's workplace rule, the NLRB will interpret the rule from the perspective of an employee who is subject to it, economically dependent on the employer, and who also contemplates engaging in protected concerted activity. According to the NLRB, the employer's intent in maintaining a rule is "immaterial." Rather, if an employee could reasonably interpret the rule to have a coercive meaning, it will be found presumptively unlawful.

However, this presumption is rebuttable. An employer can refute this presumption by proving that the workplace rule advances a legitimate, substantial business interest and the employer cannot advance that interest with a more narrowly tailored rule. If the employer meets this burden, then the workplace rule will be found lawful to maintain.

The NLRB's decision overrules NLRB precedent set in Boeing Co. (2017), under which certain types of workplace rules were categorized as always lawful. According to the NLRB, the previous standard set out in Boeing condoned overbroad workplace rules by not requiring employers to narrowly tailor their rules to only promote legitimate, substantial business interests. Boeing itself overruled a more employee-friendly standard set by the Obama-era NLRB.

The new Stericycle standard will apply retroactively to pending cases. Accordingly, employers should review their handbooks, workplace rules, and employee policies to assess whether any of their workplace policies could be interpreted to chill employees from exercising their Section 7 rights. If so, employers will want to make sure the policy in question is narrowly tailored and supported by legitimate business justifications.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.