In a pivotal move that again reshapes the landscape of employer-employee relations, the National Labor Relations Board (NLRB) recently issued a significant decision in the case of Stericycle, Inc. and Teamsters Local 628. This ruling (372 NLRB No. 113, 2023) ushers in a new era for evaluating employer work rules and policies, marking a departure from previous standards and a notable shift toward prioritizing employee rights. In Stericycle, the Board reviewed the decision of an administrative law judge who found that the Respondent violated Section 8(a)(1) by maintaining certain rules for its employees that addressed personal conduct, conflicts of interest, and confidentiality of harassment complaints. In making those findings, the judge applied the standard established by a divided Board in Boeing Co., 365 NLRB No. 154 (2017) and revised in LA Specialty Produce Co., 368 NLRB No. 93 (2019), which reversed the standard announced in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004).
The case centered on an employee handbook policy requiring “civil” conduct to safeguard the company’s reputation. The NLRB concluded that this policy violated the rights of the employee, highlighting a recurring problem with the earlier Boeing and LA Specialty Produce Co. decisions, finding that these prior standards permitted employers to adopt overly broad work rules that impeded employees from exercising their rights.
Under the newly established standard, the perspective of a lay employee contemplating participation in protected concerted activity takes center stage. This perspective is that of an employee who fears economic consequences that might hinder their ability to meet basic needs, such as paying rent or providing food for their family. The NLRB’s revision also includes a crucial departure from the previous approach: no longer will the employer’s intent behind adopting or maintaining rules be taken into account. This dramatic shift in focus underscores the NLRB’s commitment to safeguarding employee rights and mitigating potential infringement. The implications of this decision are far-reaching. Workplace rules are now deemed “presumptively unlawful” if they have the potential to encroach on employee rights. Employers can challenge this presumption by demonstrating that a rule serves a substantial business interest and that there exists no narrower alternative. In other words, guilty until proven innocent.
Notably, Board member Marvin Kaplan voiced dissenting opinions. He expressed concerns that the decision lacks a balanced consideration of legitimate employer interests alongside the rights of employees. For instance, Kaplan questioned the majority’s view that keeping workplace investigations confidential might breach employee rights, as it could conflict with guidelines set by Equal Employment Opportunity (EEO) and the Occupational Safety and Health Administration (OSHA).
The Stericycle, Inc. ruling underscores the NLRB’s broader trend of relaxing employee restrictions, which is evident in previous decisions related to non-disparagement and confidentiality clauses. In its holding, the Board adopted an approach to assessing facial challenges to employer work rules under Section 8(a)(1) that “builds on and revises the Lutheran Heritage standard.” The ramifications of this decision are manifold. Employers found to maintain unlawful rules could face a spectrum of consequences, from rule removal or replacement, to potential accusations of anti-union bias during union organizing campaigns, or by affected employees challenging adverse employment actions.
As the dust settles, employers are urged to review their workplace policies AGAIN through the new lens set by the NLRB. It is crucial to review and revise your policies so that they are reasonably tailored to serve genuine business interests and in alignment with local, state, and federal laws, as well as the evolving standards of administrative agencies. The Stericycle decision has significantly altered the dynamics of employer work rules, ushering in an era where employee rights are firmly placed at the forefront, again whipsawing employer compliance attempts from one administration to the next.
REMEMBER: the National Labor Relations Act applies to all employers and employees, whether unionized or not.