New NLRB Standard Puts Employer Handbooks Under Microscope

On Aug. 2, 2023, the National Labor Relations Board (NLRB) issued a decision in Stericycle Inc., that subjects employer handbooks and policies to a new and higher level of scrutiny. Under the NLRB’s analysis in Stericycle, employer policies that previously seemed routine or standard may now be considered violations of the National Labor Relations Act.

Section 8(a)(1) of the act prohibits employers from interfering with, restraining or coercing employees from exercising their rights under Section 7 of the act. Section 7 protects an employee’s right to form, join or assist labor organizations. In the past few years, the NLRB has made clear that it will consider employer policies it deems overbroad or restrictive to be an improper restraint on employees’ Section 7 rights.

Under Stericycle, the NLRB will evaluate employer policies and rules to determine whether an employee could “reasonably interpret the rule” to restrict employees from freely taking collective action with their coworkers pursuant. If the board can demonstrate that an employee is reasonably likely to interpret a company rule to have a chilling effect on his or her Section 7 rights, then the rule will be presumptively unlawful, even if a “non-coercive” interpretation is also reasonable.

In other words, if the board determines a work rule could be reasonably considered to restrict an employee’s right to take collective action, the board will consider the rule presumptively unlawful.

Once the NLRB determines a rule is presumptively unlawful, the employer will have the opportunity to rebut the presumption by demonstrating 1) the rule advances a legitimate and substantial business interest, and 2) the employer is unable to advance that interest with a more narrowly tailored rule. The board’s decision in Stericycle provides little insight into what might be considered a “legitimate and substantial business interest.”

Key Takeaways

The NLRB’s Stericycle decision is likely to affect most employers’ current policies and handbooks, particularly policies that were previously considered standard. Employers should consider reviewing their employee handbooks and other workplace policies to ensure they are compliant with the board’s new emphasis on striking down policies it considers to be chilling on employees’ workplace rights.

For more information, please contact the Barnes & Thornburg attorney with whom you work or John Kuenstler at 312-338-5924 or john.kuenstler@btlaw.com or Michael Witczak at 310-284-3764 or michael.witczak@btlaw.com.

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