NLRB Increases Scrutiny of Employee Handbooks and Workplace Rules and Policies

Last week, the National Labor Relations Board (NLRB) issued a ruling in Stericycle Inc., 372 NLRB No. 113 (2023) (“Stericycle”), that significantly impacts employers’ implementation of workplace rules and policies. The new standard establishes a higher burden for employers to ensure that their workplace policies, rules, and employee handbooks do not restrict employees’ rights under the National Labor Relations Act (NLRA).

Regardless of status as a unionized or non-unionized employer, all employers are prohibited from restricting employees from engaging in “protected concerted activity” under Section 7 of the NLRA. Essentially, employers are prohibited from adopting workplace policies and rules that limit (or “chill”) an employee from exercising the right to act with co-workers, or on behalf of coworkers, to address work-related issues. In recent years, under the NRLB’s decision in The Boeing Company, 365 NLRB No. 154 (2017) (“Boeing”), in determining if a workplace rule or policy chilled an employee’s exercise of Section 7 rights, the NLRB weighed (i) the rule’s impact on an employee’s ability to exercise rights under the NLRA, and (ii) the employer’s legitimate business interests in the rule. With Boeing, and in subsequent NLRB rulings stemming from Boeing, employers had a certain degree of predictability regarding the lawfulness of certain workplace rules and policies.

Under the new standard in Stericycle, there is now a presumption that a policy or rule is unlawful if it “has a reasonable tendency to chill employees from exercising their Section 7 rights.” This presumption exists “even if a contrary, noncoercive interpretation of the rule is also reasonable.” Employers may rebut this presumption by proving that “the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.” In summary, if the General Counsel for the NLRB finds that there is a reasonable interpretation of a rule that would “chill Section 7 rights,” and the employer is not able to successfully rebut that presumption, then the rule will be found unlawful.

With the heightened standards, a number of workplace rules, policies, and provisions in employee handbook and confidentiality agreements are subject to additional scrutiny. For example, many employee handbooks have policies regarding workplace civility and office conduct, which often establish standards for conduct and a mechanism to address disputes. If the standards of such a policy could be reasonably interpreted to restrict an employee’s right to act with other employees to address a work-related issue, such policy will be presumed unlawful. Other similar policies that will be subject to additional scrutiny under the new standards may include, but are not limited to, policies addressing report/complaint procedures, confidentiality requirements, communications, solicitation, recording standards, on-duty/off-duty conduct, and conflicts of interest.

To address these updates, employers should review and update their employee handbooks, policies, and rules. Employers should also review any proprietary information or confidentiality agreements (e.g. PIIAs), as such agreements are also impacted by the new standards. Employers should ensure that the provisions of any policy or agreement are narrowly crafted to eliminate any “reasonable tendency” that such a policy or rule could chill an employee from exercising Section 7 rights. Additionally, employers should ensure that such provisions actually advance a legitimate and substantial business interest and that there is not a more narrowly tailored provision that could advance such interest. Employers should also add disclaimers that clarify that no rule, policy, or requirement is intended to restrict an employee’s rights under Section 7 of the NLRA. Such a disclaimer will not eliminate all risk, but could assist in preventing a “reasonable tendency” for a rule or policy to chill an employee’s Section 7 rights.

If you need assistance in reviewing and updating your agreements, employee handbooks, or other workplace policies and rules, please contact your Kunzler, Bean & Adamson attorney.

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