Following new decision, is your employee handbook unlawful?

Business people discussing paperwork sitting around a conference table

Two years ago, in a memo issued by the National Labor Relations Board, the agency’s general counsel signaled that one of the Board’s main priorities would be to scrutinize whether certain workplace policies unlawfully infringed on employees’ rights to engage in protected activity under Section 7 of the National Labor Relations Act. Common examples of protected activity include organizing and joining a union, as well as discussing the terms and conditions of one’s employment. Just last week, the Board made good on that promise, reversing the more employer-friendly standard that had been in place since 2017 and adopting a new standard that potentially calls into question the lawfulness of many employer policies.

Last week’s decision in Stericycle, Inc. and Teamsters Local 628, which will be applied retroactively, potentially affects all workplaces, unionized or not, and will require employers to review their existing work rules, policies and procedures to ensure compliance with the new standard.

What’s in, what’s out

Stericycle overruled prior standards regarding a categorical approach to work rules, under which certain types of rules were always considered lawful. Stericycle also overruled prior standards that permitted employers to adopt overbroad work rules that chilled employees’ exercise of their Section 7 NLRA rights.

Under the new standard, the NLRB considered whether an employee “would reasonably construe” the work rule or policy in question as chilling protected conduct. Work rules and policies are to be interpreted from the perspective of an employee who could potentially engage in protected Section 7 activity. If an employee could reasonably interpret an employer’s policy to be coercive and chill an employee’s desire to discuss the terms and conditions of employment (even if there is also a reasonable noncoercive interpretation), the employer must show the policy is justified. To avoid a violation, employers must now show that workplace conduct rules are narrowly tailored to advance a legitimate and substantial business interest and that it is not possible to have a more limited rule.

The NLRB stated that future policies will be examined on a “case-by-case” basis and will examine the specific language of a particular rule and the employer interest invoked to justify them. In making this case-by-case analysis, the Board will examine: (1) the specific wording of the rule; (2) the specific industry and workplace context in which it is maintained; (3) the specific employer interests it advances; and (4) the specific statutory rights it may infringe.

Employer action required now

Importantly, the NLRB stated that this new standard will be applied retroactively. This means that all employers should review their employee handbooks and policies now to make sure that they comply with the NLRB’s Stericycle decision. Certain handbook provisions, particularly those related to confidentiality, social media, disciplinary rules, workplace civility rules, loitering rules, restrictions on recording in the workplace, and NLRA disclaimers, need to be reviewed and possibly revised.

Employer assistance and resources

For assistance in reviewing your employee handbook and company policies for compliance with this new standard, please contact your McAfee & Taft Labor & Employment Group attorney.

For more insights as to the current NLRB landscape, including how the Labor Board exercises significant authority over non-union employers, please check out our recent complimentary webinar, “Unions, Union Avoidance, and the Labor Board: What’s in store for employers.”