Sept. 20, 2023 – A new standard for work rules issued by the National Labor Relations Board (NLRB) has employment lawyers wetting the tips of their blue pencils.

The NLRB issued the standard in the Stericycle Inc. decision in August. The standard governs work rules challenged under section 8(a)(1) of the National Labor Relations Act (NLRA) and means that many employers will have to re-think provisions in their employee handbooks.

Under the new standard, the NLRB general counsel must prove that a challenged rule reasonably tends to chill employees from exercising their rights under section 7 of the NRLA. If the general counsel meets that burden of proof, the rule is presumptively illegal.

An employer may rebut the presumption by demonstrating that: 1) the rule furthers a business interest that’s both legitimate and substantial; and 2) the employer can’t further that interest with a rule more narrowly tailored.

Section 7 protects the rights of workers – union and non-union – to engage in concerted activities, defined as when two or more workers act for their collective benefit or protection regarding the terms and conditions of their employment.¹

Decision Overruled 2017 Decision

“Look at your reporting mechanisms, look at your civility rules, look at your work rules, things that specifically affect employees day-to-day.” – Mercedes de la Rosa, associate at MWH Law Group

By issuing the Stericycle decision, the NLRB overruled Boeing Co. (2017).

Under the Boeing decision, which was later refined in LA Specialty Produce Co. (2019), the standard used by the NLRB in judging claims under section 8(1) focused on the rule’s effect on the employer.

“For years, employers would ask only ‘Is there a business reason why we wrote the rule like this … is it articulable, does it make sense?’” said Mercedes de la Rosa, an associate with MWH Law Group in Milwaukee.

De la Rosa, who represents employers, said the new standard flips that script.

“Now it’s viewed from the employee’s standpoint: could the NLRB counsel argue that it has a chilling effect on a reasonable employee?” de al Rosa said.

“The whole idea is to make sure that employees can express complaints to the NLRB without it having a negative effect on them at work.”

‘As Narrow as Possible’

Nicholas Fairweather, a shareholder at Hawks Quindel S.C. in Madison who represents employees, said the new standard will likely force employers to re-write portions of their employee handbooks, which these days are largely distributed via company intranet.

“Those rules need to be as narrow as possible, and the employer needs to articulate its business reason for having the rule in the first place,” Fairweather said. “That’s where I really think the re-drafting is going to have to happen.”

De la Rosa said the first step for employers is to read their employee handbooks with new eyes.

“Instead of reading it the way you’ve been reading it the last couple of years, read it from the employees’ side,” de la Rosa said. “Is there anything in there that, read from their side, could have a chilling effect on them going to the NLRB or engaging in concerted activities?”

“Look at your reporting mechanisms, look at your civility rules, look at your work rules, things that specifically affect employees day-to-day,” de la Rosa said.

Blanket Rules Now Suspect

“Categorical rules just aren’t going to fly anymore. The employer has to make an effort to show that the rule is necessary in a specific case.” – Nicholas Fairweather, shareholder at Hawks Quindel S.C.

The new standard is most likely to affect several types of rules commonly found in employee handbooks, for instance, a blanket prohibition on bringing cell phones to work, or a rule that prohibits using the employer’s email for non-work purposes.

“A broad rule on email would probably be struck down because it would prevent employees from communicating about a protected, concerted activity on the job,” Fairweather said.

“Those kinds of categorical rules just aren’t going to fly anymore,” Fairweather said. “The employer has to make an effort to show that the rule is necessary in a specific case.”

Under the new standard, confidentiality provisions are also likely to get a closer look by the NLRB, Fairweather said. Employers often make confidentiality rules to protect trade secrets and other information.

“But a confidentiality rule could also prevent employees from communicating with each other or with their unions about working conditions,” Fairweather said. “And that’s one that may have been acceptable before Stericycle but is now going to be pretty closely scrutinized.”

Rules on Confidentiality, Social Media

What about rules regarding the confidentiality of human resources investigations?

“Those are going to be interesting because typically that rule is there to protect the employee from retaliation,” de la Rosa said.

“It will be interesting to see how the NLRB interprets those rule because while confidentiality, in my mind, is meant to protect the employee as well as the employer, I can see an employee’s lawyer making the argument that the confidentiality rules means that if they get a settlement for something and the company doesn’t admit that it did anything wrong, the employee should be able to talk about that.”

De la Rosa said that many employers will need to revisit their social media policies in the wake of the Stericycle decision.

“It was pretty common to have a rule that said, ‘Don’t use social media to talk about work,’” de la Rosa said.

“Well, you can’t do that anymore. If workers are on social media talking about how much they make or asking, ‘Are you guys unionizing over there?’ employers can’t have a blanket rule about social media.”

Case-by-case Basis

De la Rosa said that after Stericycle, the NLRB is likely to take a fine-toothed comb to employee handbooks.

“Each and every rule is being reviewed on a case-by-case basis, on whether it would have a chilling effect,” de la Rosa said.

Fairweather, whose practice is limited to representing unions, said he expects the Stericycle decision to spur a number of new cases.

“I would imagine that unions in the private sector are going to start challenging these handbooks pretty quickly,” Fairweather said.

Endnotes

¹ Railroad and airline employees, along with state and local government employees, are not covered by the NLRA.