Employer Alert: Employee Handbooks in the Wake of NLRB’s Recent Stericycle Ruling

September 14, 2023

On August 2, 2023 the National Labor Relations Board (NLRB) decided Stericycle, Inc., overruling its prior decisions (in Boeing Co. and LA Specialty Produce Co.) regarding workplace rules and their impact on workers’ rights to engage in concerted activity. The ruling will impact most employers, whether or not they have unionized workforces, and will impact a range of workplace rules, particularly those that govern personal conduct, conflicts of interest, and the confidentiality of complaints of harassment or other misconduct. For this reason, employers should – once again –review their existing policies to ensure (or at least attempt) compliance with the latest swing of the NLRB pendulum. They also must be prepared to show how the rule serves a legitimate and substantial business interest that cannot be achieved through a more narrowly tailored rule.

Background:

Stericycle corrects what it describes as a standard that was tilted too heavily in favor of employers and failed to account for the impact of employees’ economic dependence on their employers. According to the majority opinion in Stericycle, these failings led to overbroad work rules that unreasonably chill employee rights to “self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” NLRA, §7.

New Standard:

Under the new standard, the NLRB will interpret a work rule from the perspective of a reasonable (non-lawyer) employee who is “economically dependent on her employer and thus inclined to interpret an ambiguous work rule to prohibit protected activity.” Under the standard, a workplace rule or policy is presumptively unlawful if such an employee could reasonably interpret it to have a coercive meaning so as to restrict or prohibit concerted activity. This presumption will apply even where the same employee could reasonably interpret the rule not to interfere with §7 rights. To rebut this presumptive unlawfulness, an employer must then prove that the rule “advances legitimate and substantial business interests” which cannot be achieved by a more narrowly tailored rule.

Challenges for employers:

The Stericycle decision was far from unanimous. The dissenting opinion regards the Board’s new test as virtually impossible for employers to navigate, given both the need for work rules that are general and broad enough to cover a range of circumstances, and the reality that many work rules could be interpreted to restrict an employee’s §7 rights even where it is unlikely that the rule would have such an effect. For example, a work rule requiring that employees conduct themselves civilly and with decorum could be interpreted to prohibit the disharmony and debate that often arises in the context of union organizing. While the new standard will pose a number of challenges for employers, there are a few areas that are more likely to trigger an alleged violation.

To address these areas, employers should give special consideration to the following:

  • Including handbook disclaimers stating clearly that the policies are not intended to restrict the exercise of §7 rights;

  • Whether there is a legitimate need for social media policies that limit what employees can communicate about the employer or workplace, and whether such policies can be more narrowly tailored;

  • Whether to revise or narrow confidentiality policies, especially with regards to workplace investigations;

  • Whether non-disparagement policies are necessary and appropriately tailored;

  • Whether workplace rules governing interpersonal conduct and civility are appropriately focused to exclude conduct that might be protected under the Act.

For every such policy, employers should be prepared to demonstrate the business interests served by the policy.


 For further information or with help updating your employer policies, contact us at Kurker Paget LLC.