August 10, 2023 – On August 2, 2023, the NLRB announced its new analysis for whether a work rule or handbook provision violates the NLRA in Stericycle, Inc. 372 NLRB No. 113 (2023). The case explicitly overruled a line of cases from the previous Republican administration, most notably The Boeing Co., 365 NLRB No. 154 (2017), regarding how the NLRB will balance employees’ right to freely determine if they want to engage in activities protected by Section 7 of the NLRA, against an employer’s interest in maintaining work rules that do not explicitly restrict the protected activity. The upshot of Stericycle is that NLRB counsel will have a very easy initial burden of proof and there will be more NLRB litigation about arguably vague work rules that could be interpreted as impacting employees’ rights to form, join or assist unions or engage in collective action aimed at expressing employees’ complaints, and improving their working conditions or other terms of employment as defined in Section 7.
Specifically, under Stericycle there is a presumption that a work rule or handbook provision is unlawful if a “reasonable employee” who is “economically dependent” on their employer and “inclined to interpret an ambiguous rule to prohibit protected activity they would otherwise engage in,” could view the rule as possibly limiting their right to engage in protected activity. The NLRB was explicit that: (a) vagueness will be construed against the drafter (the employer); (b) the presumption of unlawfulness is established even if the rule could be interpreted not to restrict Section 7 rights; and (c) the presumption of unlawfulness is established even if there is no evidence of an employer’s intent to inhibit statutory rights of its employees. The resulting burden of rebuttal on employers is to show that there is a legitimate and substantial business interest and that those interests cannot be accomplished with a more narrowly tailored rule.
The NLRB will likely target a variety of policies in American employers’ handbooks, many of which were drafted in reliance on the old standards in the Boeing cases and based on a modern common-sense approach to professional conduct in the workplace. Unfortunately, what many would consider common sense, the NLRB considers to be unlawfully coercive. In practice, the NLRB has created a presumption that any rule which it deems arguably vague in a way that discourages employees from collective advocacy about their work and pay will be closely scrutinized and may result in administrative proceedings and mandated handbook revisions unless an employer has a well-articulated, legitimate and substantial business interest and precise drafting.
Therefore, review of your existing policies is recommended. Your current rules may be justified even under the new standard, but you should be prepared for NLRB scrutiny any time you face any kind of NLRB charge. Labor prosecutors will be looking to weave handbook rule issues into cases even if that rule had nothing to do with the initial complaint to the NLRB.
Based on the history of this area of NLRB precedents, some rules that are likely to be scrutinized are rules requiring civility, respect of supervisors, rules protecting the company’s reputation, investigative-confidentiality, confidentiality of employee information, no recording rules, no camera rules, no cell phone rules, rules against outside employment, rules restricting social media use, and rules about speaking to media or third parties. Again, rules in this realm may be lawful, but only if narrowly drafted to achieve only legitimate and substantial business interests that do not conflict with NLRB Section 7 rights.
We anticipate that the General Counsel of the NLRB, Jennifer Abruzzo, could issue a memo in coming months to publicly state a strategy for enforcement. Unfortunately, the NLRB itself did not provide much in the way of guidance about a prophylactic savings/disclaimer clause for rules or handbooks in the case itself. Additionally, the NLRB has been sitting on many other ‘rules cases’ for the past two years, so we also anticipate a steady stream of new decisions building on Stericycle in the coming months. The cases may provide further guidance, but they are undoubtedly not going to be favorable for employers.
