On August 2, 2023, the National Labor Relations Board (NLRB) decided Stericycle, Inc., wherein it revisited the legality of certain workplace rules. In Stericycle, Inc., the NLRB replaced the existing legal standards set forth in Boeing Co. and LA Specialty Produce Co. for determining the lawfulness of an employer’s work rule that does not expressly restrict employees’ protected concerted activity under Section 7 of the National Labor Relations Act (Act). The new standard is applied retroactively to all pending cases.
Prior to Stericycle, Inc., work rules were placed into one of three categories. Category 1 consisted of rules that were always lawful to maintain, category 2 consisted of rules that were sometimes lawful to maintain, and category 3 consisted of rules that were always unlawful to maintain. This approach designated all rules of a generalized type regardless of the precise phrasing of the rule, the specific industry or workplace of the employer, or the particular interests advanced by the employer.
According to the NLRB in Stericycle Inc., the prior standard was problematic because it gave too much weight to employer interests, failed to account for the economic dependency of employees on their employers, and failed to require employers to narrowly tailor their work rules to minimize any infringement of employee rights. Moving away from the categorical approach adopted in Boeing, the NLRB has returned to a case-by-case approach and will examine the specific language of each work rule and the employer interests invoked to justify it.
The test for evaluating whether an employer’s conduct or statements violate Section 8(a)(1) of the Act is whether they have a reasonable tendency to interfere with, restrain, or coerce employees who may engage in activities protected by Section 7. As explained in Stericycle, Inc., the new standard begins by assessing whether the General Counsel has established that a challenged work rule has a reasonable tendency to chill employees from exercising their Section 7 rights. If an employee could reasonably interpret a rule to restrict or prohibit Section 7 activity, the General Counsel has satisfied its burden and the rule is presumptively unlawful. Such is the case even if the rule could also reasonably be interpreted not to restrict Section 7 rights and even if the employer did not intend for its rule to restrict Section 7 rights.
An employer may rebut the presumption that a rule is unlawful by proving that it advances a legitimate and substantial business interest, and that the employer is unable to advance that interest with a more narrowly tailored rule. If the employer is successful in its rebuttal, then the work rule will be found lawful to maintain.
When analyzing the rule, the NLRB will review it through the perspective of an employee who is subject to the rule, economically dependent on the employer, and contemplates engaging in Section 7 activity. It is important to remember that any ambiguity in a work rule will be construed against the employer as the drafter of the rule.
McMahon Berger will continue to monitor the General Counsel’s and the NLRB’s actions with respect to work rules. Employers should consult trusted labor counsel and review existing handbooks and work rules to determine if they present possible conflicts with the NLRB.
The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.
