Employers should reevaluate handbooks following NLRB's 'Stericycle' ruling
Employers should reevaluate their rules from the perspective of a “reasonable” employee who is economically dependent and an NLRB that is aggressively pursuing employee interests.
The National Labor Relations Board’s recent decision in Stericycle, 372 NLRB No. 113 (Aug. 2, 2023), establishes a new standard for determining whether employer work rules violate the National Labor Relations Act. All employers — whether union or non-union — should take a second look at their work rules and handbooks with this decision in mind.
Section 7 of the NLRA protects the rights of employees to organize, form, join or assist labor organizations, to bargain collectively and “to engage in other concerted activities for the purpose of bargaining or other mutual aid or protection.” It is applicable to union and non-union employees alike. The question of what work rules infringe on Section 7 rights has been a topic of considerable dispute and controversy. For example, does a rule mandating civility in the workplace or non-disparagement of the employer on social media infringe on employees’ right to engage in concerted activity? Sometimes? Always? Never?
In Boeing Co., 365 NLRB No. 154 (2017) the board created a three-category system for evaluating work rules, deeming them universally legal, conditionally legal or universally illegal. For facially neutral rules that may be conditionally legal, it applied a balancing test between the employer’s legitimate business interests (such as maintaining discipline) and the employee’s right to exercise Section 7 rights.
Stericycle does away with that test and holds that a work rule is presumptively invalid if a reasonable employee can view the rule as an infringement of their Section 7 rights, taking into account the employee’s economic dependence on the employer. The employer can rebut that presumption by proving that the rule advances a legitimate and substantial business interest and that it cannot pursue that interest with a narrower rule. The employer’s innocent intent in establishing the rule is “immaterial”.
Related: NLRB memo puts spotlight on unfair labor practices in severance agreements
For better or worse the relative certainty of Boeing is gone. Employers should reevaluate their rules from the perspective of a “reasonable” employee who is economically dependent and an NLRB that is aggressively pursuing employee interests.