On August 2, 2023, the National Labor Relations Board (NLRB) adopted a new standard for evaluating when employer workplace rules will be found to have a “reasonable tendency” to discourage employees from exercising their right under Section 7 of the National Labor Relations Act (NLRA) to form, join, or assist with labor organizations, to bargain collectively, and to engage in other concerted activities for the purpose of mutual aid or protection.
Out with the Old Boeing Standard
The Board’s new standard, which was issued in Stericycle, Inc., overrules its 2017 decision in Boeing Co., which had created a tiered-standard for evaluating the sufficiency of workplace rules by placing them into one of three categories: (1) rules that were always lawful; (2) rules that must be evaluated on a case-by-case basis to determine enforceability; and (3) rules that were always unlawful.
In with the New Stericycle Standard
Unlike the categorical approach under Boeing, the NLRB’s new standard articulated in Stericycle will, on a case-by-case basis, evaluate the legality of workplace rules. To establish that an employer workplace policy violates the NLRA under Stericycle, the NLRB’s General Counsel first must establish that the rule “has a reasonable tendency to chill employees from exercising their Section 7 rights” and is, therefore, presumptively unlawful. In doing so, the Board will consider the rule from a “reasonable employee” perspective, i.e., a worker who is a lay person, not a lawyer, and who is economically dependent on her employer and thus more susceptible to interpreting an ambiguous rule to prohibit protected concerted activity she would otherwise engage in.
If the Board’s General Counsel meets its burden of demonstrating that an employer’s workplace rule is presumptively unlawful, under the first prong of the Stericycle test, the employer is then given an opportunity to rebut the presumption of unlawfulness by proving (1) that the rule advances a legitimate and substantial business interest of the employer, and (2) that the employer is unable to advance that interest with a more narrowly tailored rule. A workplace rule that satisfies both prongs of the new test will be deemed to be in compliance with the NLRA under the Stericycle standard.
What are Practical Next Steps for Employers?
The new standard articulated by the NLRB in Stericycle is applicable retroactively. That means that many existing employer workplace rules that were lawful under the previous Boeing standard, may no longer be compliant with the NLRA under Stericycle. It may take some time for the NLRB to develop meaningful guidance for employers to follow, given the case-by-case evaluation necessitated by the new standard. While that is ongoing, it may be a good time for employers to proactively undertake a comprehensive review of their employee handbook policies and workplace rules. After review, employers should make appropriate revisions, especially to those policies that relate to employer surveillance and privacy interests of employees while at work, impose workplace civility or punish employee insubordination, restrict employee speech critical of their employer or company managers, or impose restrictions on employee video and/or cell phone recordings while at work.
Bean, Kinney & Korman’s labor and employment law practice group works proactively with union and non-union employers of all sizes, to craft a full range of employment policies and documents to meet the compliance challenges of the NLRA and all applicable federal, state, and local laws. If you have questions about the NLRB’s decision in Stericycle, Inc., or need assistance with your company’s employee policies or forms, please contact Doug Taylor at (703) 525-4000 or firstname.lastname@example.org, or your current Bean, Kinney & Korman attorney.
This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.