On August 2, 2023, the National Labor Relations Board (NLRB) adopted a new standard for assessing whether workplace rules, including policies found in handbooks, infringe upon employees’ rights under Section 7 of the National Labor Relations Act (NLRA), in violation of Section 8(a)(1) of the NLRA.

This new burden-shifting framework, which was announced in the NLRB’s Stericycle, Inc., 372 NLRB No. 113 decision and applies to both union and non-union workplaces, focuses on whether a challenged rule has a “reasonable tendency” to chill employees’ Section 7 activity.

Section 7 expressly guarantees the right to self-organization; to form, join or assist labor organizations; to bargain collectively through representatives of their choosing; “and to engage in other concerted activities for the purpose of… other mutual aid or protection.” As a result of the broad language regarding “concerted activities,” Section 7 also applies to non-union workplaces. Stericyle addresses “facially neutral” workplace rules that may discourage employees from exercising those rights.

The Stericycle decision overturns previous precedent in which the NLRB had crafted a balancing test to evaluate such workplace rules and had held that certain types of policies were inherently lawful under Section 7, regardless of the precise language utilized in the policy.

Under the new standard, the NLRB’s general counsel is to evaluate an employer’s workplace policy or rule on a case-by-case basis from the perspective of a reasonable employee. If an employee could reasonably interpret the rule as “coercive,” the general counsel will have met its initial burden of establishing that the rule violates Section 7, regardless of the employer’s intent behind the policy.

An employer can rebut the presumption of an “unlawful” work rule by proving that (1) the rule advanced a “legitimate and substantial” business interest, and (2) the employer is unable to advance that interest with a more narrowly tailored rule.

Under the facts in Stericycle, the administrative law judge ultimately found that the employer violated the NLRA by maintaining employee rules that prohibited: personal conduct that would harm the employer’s business reputation; conflicts of interest that adversely affect the employer; required confidentiality in the investigation and resolution of harassment complaints; and camera and video use policies that require employees to refrain from using cameras during break time.

The NLRB’s decision is significant in light of the fact that these types of policies, which are common in workplaces, were previously deemed lawful. The NLRB’s case-by-case scrutiny of workplace rules requires employers to carefully consider whether policy objectives can be met with more narrowly targeted rules.

In light of this decision, employers should take the opportunity to review their employee handbooks and other sources of workplace rules to determine whether any rules or policies may tend to chill employees’ exercise of their Section 7 rights under the new standard and, at the very least, consider revisions that would narrow the scope of such rules.  

The NLRB did not provide guidance on what “business interest” it would consider sufficiently “legitimate and substantial” to overcome the presumption of illegality, nor has it addressed the sufficiency of Section 7 disclaimer provisions in employee handbooks stating that nothing in the employer’s policies or rules is intended to infringe upon employees’ rights.

The labor and employment attorneys at Murtha Cullina will continue to monitor NLRB activity on this issue, including whether its decision in Stericycle will be appealed.