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.

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Photo of Emily McDonough Souza Emily McDonough Souza

Emily McDonough Souza is counsel in the Labor & Employment and Litigation practices at Murtha Cullina.  Her experience includes representing clients in a broad range of disputes involving insurance coverage, business torts, and contractual rights, as well as representing employers in claims involving…

Emily McDonough Souza is counsel in the Labor & Employment and Litigation practices at Murtha Cullina.  Her experience includes representing clients in a broad range of disputes involving insurance coverage, business torts, and contractual rights, as well as representing employers in claims involving discrimination and retaliation, breach of non-compete and restrictive covenants, and wage and hour violations.  Emily has regularly appeared on behalf of clients in both state and federal court matters, including oral arguments, mediations, depositions, and pretrial conferences.

Prior to joining Murtha Cullina, Emily clerked for the Honorable Eliot D. Prescott of the Connecticut Appellate Court.  She received her J.D. magna cum laude from Quinnipiac University School of Law, where she served as the Executive Managing Editor of the Quinnipiac Law Review. Emily earned her B.S. magna cum laude from the University of Connecticut, where she was a member of the Honors Program.

Photo of Salvatore G. Gangemi Salvatore G. Gangemi

Salvatore G. Gangemi is a Partner in the Litigation Department of Murtha Cullina and a member of the Labor and Employment Practice Group. He advises clients with respect to state, federal and local employment laws. In addition, he litigates matters involving misappropriation of…

Salvatore G. Gangemi is a Partner in the Litigation Department of Murtha Cullina and a member of the Labor and Employment Practice Group. He advises clients with respect to state, federal and local employment laws. In addition, he litigates matters involving misappropriation of trade secrets, restrictive covenants, breach of employment contract, fiduciary duty, and other work-related common law claims. Sal also counsels clients on day-to-day issues involving workplace management and administration, including requests for reasonable accommodation for disabilities, for family and medical leave, and wage and hour issues.  He conducts employment law training on a variety of topics, including sexual harassment prevention and wage/ hour compliance.  He also drafts employment policies and agreements, and assists clients in auditing worker classification practices and policies both in the context of the Fair Labor Standards Act and state laws governing independent contractor determinations.

Photo of Patricia E. Reilly Patricia E. Reilly

Patricia E. Reilly, Chair of the Labor and Employment Practice Group, is an experienced litigator who represents clients in a wide range of cases including, employment discrimination and related torts, non-compete and restrictive covenants, wage and hour, breach of contract, unfair trade practices…

Patricia E. Reilly, Chair of the Labor and Employment Practice Group, is an experienced litigator who represents clients in a wide range of cases including, employment discrimination and related torts, non-compete and restrictive covenants, wage and hour, breach of contract, unfair trade practices, and business disputes. In addition to maintaining a thriving litigation practice, Tricia counsels clients on a variety of employment-related issues including hiring, firing, and discipline; wage and hour; state and federal FMLA; sexual harassment investigations and prevention; Title IX; pregnancy and disability accommodation; and avoidance of employment discrimination liability.

Tricia is listed as a leading Labor and Employment Lawyer in Chambers USA.  She is listed in Best Lawyers in America®, and in 2017, Best Lawyers in America® recognized her as “Lawyer of the Year”, New Haven, Litigation – Labor and Employment. Tricia is a member of the American Bar Association, the Connecticut Bar Association and the New Haven County Bar Association.  She received her B.A. from Wesleyan University and her J.D. from University of California, Berkeley School of Law.