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NLRB Stericycle Decision Adopts Stringent New Standard Limiting Employer Workplace Rules That May Restrict Employee Concerted Activity



On August 2, 2023, in Stericycle, Inc., the National Labor Relations Board (NLRB) adopted a new legal standard for employer work rules that may have the effect of restricting employees' protected concerted activity. Employers will recall that Section 7 guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” These rights exist regardless of whether an employee is a member of a union. Section 8(a)(1) of the National Labor Relations Act (NLRA) makes it an unfair labor practice to interfere with employees who are exercising these rights.

Overturning prior precedent in Boeing and LA Specialty Produce, the NLRB will now presume an employment policy or rule is an unlawful labor practice if it “has a reasonable tendency to chill employees from exercising of their Section 7 rights.” In determining whether any employment policy has such a tendency to chill employee exercise of Section 7 rights, the NLRB will consider only the “perspective of an economically dependent, layperson employee,” regardless of employer intent or whether an alternative interpretation that does not violate Section 7 is also a reasonable interpretation.

Once the NLRB finds that an employer policy or rule is presumptively an unfair labor practice, the employer has an opportunity to rebut this presumption but only by showing the policy or rule “advances a legitimate and substantial business interest,” and then only if the employer shows that a more narrowly tailored rule could not achieve that same interest. The employer cannot rebut the presumption by showing there is a reasonable alternative interpretation that does not violate Section 7 rights.

The new Stericycle rule strongly tips the balance in favor of employees, while disregarding employer intent or other reasonable interpretations of the rule or policy at issue. In essence, if an employee could read the rule or policy to chill their Section 7 rights, then the NLRB will find that it does so regardless of evidence to the contrary.

Importantly, the NLRB determined this new rule would apply retroactively, including to all pending cases. The NLRB general counsel has yet to apply this new standard in a case because the Stericycle case was remanded for further proceedings.

Key Takeaways for Employers

What this means for employers is that all workplace policies and rules should be reviewed to consider whether an employee could read the policy or rule language to have any tendency to chill exercise of Section 7 rights. Additionally, it is important to revise the language accordingly so that it is “narrowly tailored” to avoid “unnecessary overbreadth.” In practice, employers should also consider posting (and including in their handbooks) language expressly stating that nothing contained in the employer’s policies or rules is intended to, or will, affect an employee’s rights under NLRA Section 7. Although this will not save overbroad rules and policies, the language added to any policies or rules that could conceivably affect employee’s Section 7 rights could minimize the potential that it could be perceived to chill such rights. Further, in practice, employers should continue to be very cautious in meetings or investigations of employee conduct that involves any type of “concerted activity” or activity potentially aimed at “mutual aid or protection.” The current leanings of the NLRB are not inclined to be generous towards employers—well-intentioned as they may be.

The legal issues impacting this topic are and will continue to be ever-changing (Employment Law in Motion!), and since publication of this blog post, new or additional information not referenced in this blog post may be available.

This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.

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