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So far this year, we have seen the National Labor Relations Board (NLRB) issue opinions reversing or significantly altering labor law standards established under the previous White House administration. On August 2, 2023, the NLRB continued this trend by adopting a new legal standard for evaluating employer workplace rules challenged as facially unlawful under Section 8(a)(1) of the National Labor Relations Act (NLRA).  

The NLRB’s decision in Stericycle, Inc. heightens scrutiny of employers’ workplace rules and policies, impacting both unionized and non-union employers. Under the previous standard set forth by Boeing Co., 365 NLRB No. 154 (2017), the NLRB assessed whether factually neutral employer workplace rules (e.g., employee handbook policies) interfered with employee rights based on two factors: (1) extent and nature of the impact on employees’ rights to engage in unionization, collective bargaining, and other concerted activities, and (2) the employer’s legitimate justifications for the workplace rule. 

In Stericycle, the NLRB introduced a new burden-shifting framework for use when analyzing neutral workplace rules. Under the newly adopted standard, the Board’s general counsel (GC) must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If an employee could reasonably interpret a rule as coercive, the GC can meet its burden, even if the rule could be viewed in a non-coercive manner. In other words, the employer’s intent is irrelevant. 

The employer, however, may rebut the presumption that the rule violates the NLRA by showing that the rule advances a legitimate and substantial business interest and that the employer’s business interest cannot be achieved through a more narrowly tailored rule or policy. 

Under those circumstances, the rule may be held lawful. Applying its new standard, the Board affirmed an administrative law judge’s decision that the employer’s rules governing conflicts of interest, personal conduct, and confidentiality of harassment complaints violated the NLRA.  

Practical Takeaways for Employers

The next question for many employers is how this ruling could impact their employee handbooks. The Board provided no concrete guidance or examples to assist employers in determining what language may be consistent with an employer's legitimate and substantial business interest.  

Accordingly, employers should audit their workplace rules on a case-by-case basis to determine whether they are narrowly tailored to their business interests. Employers should consider whether an employee could feel a workplace rule limits their right to protected concerted activities with their coworkers.

Employers Council is reviewing sample handbook policies and whitepapers that may be impacted by this new standard. Where necessary, these will be updated; watch for future update articles. For assistance with compliance under the new Stericycle standard, please contact the Employers Council Member Experience Team.