On August 2, 2023, the National Labor Relations Board (NLRB) issued a decision in Stericycle, Inc., 372 NLRB No. 113 (2023), which creates a new standard for evaluating whether a company's workplace rules violate the National Labor Relations Act (NLRA). This decision overturns the standard set in the 2017 decision Boeing Co., 365 NLRB No. 154 (2017), which, in turn, reversed the previous standard set in Lutheran Heritage Village – Livonia, 343 NLRB 646 (2004). The new standard, which the Board purports is a modified version of the framework established under Lutheran Heritage, applies to all private employers regardless of the unionization status of its workforce and is decidedly more employee-friendly than previous precedent.
Overturning Boeing
Under Boeing, the Board would evaluate whether a facially neutral work rule unlawfully infringed on concerted employee activity protected by Section 7 of the NLRA by balancing (1) the nature and extent of the potential impact on NLRA rights, and (2) legitimate justifications associated with the rule. The Board would look at a rule from the perspective of an "objectively reasonable employee who is aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job." Boeing also established a categorial classification system whereby certain rules were deemed either always lawful, sometimes lawful, or never lawful.
In Stericycle, the NLRB holds that Boeing gave too little weight to the burden a work rule could impose on employees' protected rights, while giving too much weight to employer interests. According to the Board, Boeing also condoned overbroad work rules by not forcing the employer to narrowly tailor its rules to avoid burdening employee rights. The standard in Stericycle takes a different approach. Now, instead of seeking to balance the interests of the employer and employee, the Board first determines whether a given work rule could be reasonably interpreted to "chill" employees from exercising their Section 7 rights. If so, the rule is deemed presumptively unlawful, even if the rule could just as easily be interpreted to not infringe on any concerted activity, and even if the employer had no intention of impacting Section 7 rights whatsoever. Unlike the "objectively reasonable employee" used in the Boeing standard, the Board under Stericycle looks at the rule from the perspective of a reasonable employee who is "economically dependent" on his or her employer and "thus inclined to interpret an ambiguous rule to prohibit protected activity [he or she] would otherwise engage in."
Once a rule is deemed presumptively unlawful, an employer may rebut that presumption by showing that the rule advances a "legitimate and substantial business interest" that could not otherwise be protected by a more narrowly tailored rule. The Board also rejects the "rigid and arbitrary" categorical approach utilized under Boeing, and instead poses to evaluate the language of every rule on a case-by-case basis.
Dissenting Opinion
If the new standard seems like a radical shift from previous precedent, at least one other Board member agrees. Writing in dissent, Board member Kaplan states that creating a standard whereby a rule is deemed unlawful if it could be interpreted as infringing Section 7 rights, as opposed to whether an employee would interpret it as such, creates the "labor-law equivalent of tort law's eggshell skull plaintiff." Under this standard, Kaplan theorizes, simple rules that broadly seek to enforce workplace decorum and civility, for example, would be deemed unlawful, since union organizing can occasionally become heated and involve contention in the workplace. The dissent posits that "legally sufficient disclaimers" added to handbooks speaking specifically to the impact on Section 7 rights are the only reliable way to predictably protect an employer's rules from invalidation by the Board. However, whether the Board would consider that practice satisfactory remains an open question.
Employer Implications
While Stericycle leaves many questions as to how exactly the Board will use its new standard, it is clear that any rule that seeks to control employer behavior or speech will come under increased scrutiny. Where a rule may have previously been protected under Boeing's categorical system, employers can no longer feel secure. For example, the Board specifically mentions the rule from Boeing prohibiting cameras in the workplace as one that had previously been categorically accepted by the board as lawful, and which would likely fail under the new standard, because of the "importance of photo or video documentation of unfair labor practices, protected concerted activity, and the like." Accordingly, there are some steps that employers should take now to address the new standard.
- Search out any workplace rule or policy that addresses employee conduct, behavior, social media use, or speech and begin the process of redrafting those rules to be more narrowly tailored, if possible.
- Add disclaimer language to any handbook specifically addressing a policy's non-application to protected Section 7 rights. While there is no guarantee these types of disclaimers or "safe harbor" language will be deemed sufficient by the NLRB to validate an otherwise unlawful rule, it is a proactive step that can be taken until the Board makes a decision one way or the other.
- Evaluate any pending unfair labor charges that have been brought against the employer. This standard is retroactive and would apply to any charge currently pending as of the date of the Stericycle decision. Accordingly, employers should review those charges and begin to think about how this decision may affect them.
- Most importantly, employers should contact experienced employment counsel to aid in the redrafting of any workplace rules or policies.
