As has been anticipated for some time, the National Labor Relations Board (NLRB), in Stericycle, Inc. (Aug. 2, 2023), adopted a new standard for determining whether workplace rules are lawful under the National Labor Relations Act. The new standard is similar to the analysis used prior to the Board’s 2017 decision in Boeing Co.
Under the Stericycle framework, the lawfulness of workplace rules under the NLRA turns on whether workers would view the workplace rule in question as restricting their rights to engage in protected concerted activity under the NLRA. The employees’ views are paramount in this regard. Employers can then prove that the rule is necessary to advance a legitimate business interest that cannot be achieved by a narrower policy. Boeing’s categorization of workplace rules into three categories is no longer the framework that the Board will use.
Section 7 of the NLRA affords workers the “right to self-organization, to form, join, or assist labor organizations, to bargain collectively . . . , and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157.
Under Stericycle, employers may promulgate workplace policies that are narrowly tailored to “advance legitimate and substantial business interests” and minimize the risk that such policies interfere with workers’ rights to engage in protected concerted activity. As explained in the decision, narrowly is meant to be just that – carefully proscribed policies that cannot be reasonably read to chill protected rights. The Stericycle decision states that employers “simply need to narrowly tailor [workplace] rules to significantly minimize, if not altogether eliminate, their coercive potential.”
If the NLRB were to find that employees reasonably view a workplace rule as restricting NLRA-protected rights, the Board will find the policy unlawful, even if there is no actual restriction on protected rights or if there is also a reasonable interpretation that such rights are not restricted. When prosecuting claims regarding workplace rules, the NLRB General Counsel is required to prove that the challenged rule has a reasonable tendency to chill employees from exercising their rights under the NLRA. If the General Counsel meets this burden, the rule will be considered presumptively unlawful. At that stage of the analysis, the employer’s ability to rebut the presumption kicks in and they may prove (1) that the rule advances a legitimate and substantial business interest; and (2) that the employer is unable to advance that interest with a more narrowly tailored rule. Policies for which employers successfully prove this defense will be considered lawful. This is no easy lift for employers. Workplace rules will be interpreted from the reasonable employee’s perspective while recognizing that employees are “economically dependent” on their employers. The “reasonable employee” is one who may be “inclined to interpret an ambiguous rule” as prohibiting protected activity the employee might otherwise engage in. It does not matter if the employer had no intent to restrict employee rights.
Board Chair Lauren McFerran explained that the Boeing decision “gave too little consideration to the chilling effect that work rules can have on workers’ labor law rights.” McFerran continued: “Under the new standard, the Board will carefully consider both he potential impact of work rules on employees and the interests that employers articulate in support of their rules.”
As a reminder, the NLRB applies to unionized and non-unionized workplaces. So, even if you do not have employees who are represented by a union the NLRA applies. Employers should review their policies and handbooks to assess whether they may chill or be interpreted as chilling NLRA protected rights. This includes, for example, policies regarding social media use, confidentiality of complaints and investigations, A/V recordings, cell phone use, workplace communications, conflicts of interest, standards of conduct, and more.
The NLRB’s views regarding workplace rules tend to change as the party in power in Washington changes – this may not be the last we have heard on this topic, depending on the outcome of the 2024 election.