Workplace Policy Updates Required: What Employers Need to Know About the NLRB's Stericycle Decision

Are your employee handbooks and policies "chilling" employee conduct? This and other questions, answered

Employers should take note, the NLRB's recent Stericycle decision has broad implications for all U.S. employers with respect to workplace policies. As discussed in detail in our prior advisory, "Time for Employers to Review and Update Employee Handbooks (Again)," this decision heightens employee protections under Section 7 of the NLRA. Employers should act now and review and update policies to avoid including rules that the NLRB would consider to have a tendency of discouraging employees from engaging in protected concerted activities.

Here are some key considerations for employers to navigate Stericycle and make necessary workplace policy updates.

1. What is the new Stericycle standard? Handbooks and workplace policies that have a "reasonable tendency" to discourage employees from engaging in protected activity and "chill" such activity (such as discussing terms and conditions of employment) will presumptively violate the NLRA. An employer's intent regarding workplace policies is "immaterial" – instead the focus is on whether a worker could "reasonably interpret the [workplace] rule to have a coercive meaning." As is discussed in our prior advisory on August 10, 2023, this a significant departure from the prior standard.
2. What employers does the standard apply to? The National Labor Relations Act's protections apply to all employers, not just unionized employers. This means all employers need to evaluate whether their policies have a "chilling effect" on employees' "protected concerted activities."
3. How will the Board interpret and apply this standard? The Board explained it will "interpret the [new standard] from the perspective of an employee who is subject to the [workplace] rule and economically dependent on the employer[.]" Employers will have to show a legitimate and substantial business interest to have a workplace rule or policy that would otherwise be unlawful; and employers will have to show that no other narrower rule or workplace policy could be sufficient to protect the legitimate business interests. Some restrictions will be permissible, but the analysis needs to be fact-specific for the business, industry, and legitimate business concern requiring the rule that might have a chilling effect.
4. What policies and workplace rules may have a "chilling effect" on employee speech and conduct? The Board seemed particularly focused on rules that employees may view as prohibiting their rights to engage in protected concerted activity. This includes rules that were implemented in response to union activity, and workplace rules that are applied to restrict Section 7 rights. However, the implications are much broader, and could impact policies related to workplace conduct and expectations, including harassment and anti-bullying policies as well as policies that may be viewed to regulate conduct outside the workplace (e.g., social media policies).
5. Will a general disclaimer in a handbook be sufficient to address the new standard? No. A general disclaimer such as "Nothing in this policy is intended to limit or restrict an employee's right to engage in protected concerted activity" will likely not be sufficient in light of Stericycle. Instead, the Board will likely look for specific explanations in policies highlighting the business purposes for the restrictions that that may chill employees' Section 7 rights.
6. What actions can employees or the Board take to challenge workplace policies? Individual employees and labor unions may file unfair labor practice charges (ULP) with the NLRB against employers with handbooks or policies that may violate the NLRA under the Stericycle standard. This could result in the NLRB issuing bargaining orders if the Board determines that the employer's policies violate the NLRA. ULPs disrupt your workplace, requiring your business to spend time and money defending your policies and actions. If the NLRB determines that your policies violate the NLRA, you may also be ordered to take specific actions to "remedy" any harm your business caused by implementing unlawful policies, including (among other things) posting notices saying your business will not violate the law further and removing disciplinary actions implemented for employee conduct found unacceptable under the (now determined to be unlawful) former policies.
7. Why else does this matter? Statistics published by the NLRB show that strikes have risen sharply in 2023 in states like California, Oregon, and Washington and employers should anticipate this trend will continue. Unfair labor practice charges are up, petitions for elections are increasing, and employers are being ordered to bargain with unions without an election when the Board determines that an employer has committed an unfair labor practice while an election petition is pending. DWT detailed more of these real-world implications in this Employment Advisor post: "Non-Union Employers Face Triple Threat: Unfair Labor Practice Charges, Unionization, and Bargaining Orders."

What should employers do now?

Employers should review and update workplace policies and rules and consult with an attorney about risks and considerations that are particular to your business. Employers should also take note that there may have been other recent legal updates or laws going into effect on January 1, 2024, that may impact current workplace policies. With the NLRB's recent decisions and other legal changes on the horizon, now is the time to review and revise your handbooks and policies to ensure you are compliant and ready to face 2024's evolving legal obligations.

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