NLRB Increases Scrutiny of Workplace Rules
In its recent Stericycle decision, the National Labor Relations Board (NLRB) modified its framework for evaluating whether employer work rules that do not expressly restrict employee Section 7 activity are unlawful under Section 8(a)(1) of the National Labor Relations Act (NLRA). In doing so, it overruled the Board’s decision in Boeing, which used a balancing approach to evaluate work rules. In place of Boeing, the Board’s ruling restored and modified the Lutheran Heritage framework to create a new threshold for interpreting challenged work rules. We anticipate that, like the Lutheran Heritage framework, the new Stericycle test will lead the Board to scrutinize even routine employer rules with exacting precision and will lead to an increase in litigation, and headaches, for employers.
ANALYZING WORK RULES: PRE-STERICYCLE CASES
Under the now-overruled Boeing standard, the Board balanced employer interests with employee interests and applied a categorical classification system for evaluating workplace rules. The scrutiny placed on work rules depended on whether it fell into one of three types: rules that were always lawful to maintain (e.g., insubordination or non cooperation), rules that were always unlawful to maintain (e.g., express prohibitions on discussing working conditions), and rules that could be lawful depending on the circumstances in a given workplace (e.g., media relations). In the new Stericycle decision, the Board found that Boeing gave too much weight to employer interests and too little weight to the effect overbroad work rules may have on chilling an employee’s decision to engage in Section 7 activity.
THE BOARD'S NEW STERICYCLE STANDARD FOR ANALYZING WORK RULES
In Stericycle, the Board reverted to and then modified the standard that existed prior to Boeing, the Lutheran Heritage test. Under Lutheran Heritage, work rules were illegal if a worker could “reasonably construe” them to infringe NLRA rights. Under the newly modified Stericycle standard, the Board will first assess whether a challenged work rule has a “reasonable tendency” to chill employees from exercising their Section 7 rights. Then, if the “economically dependent employee” can reasonably interpret a rule to restrict Section 7 activity, the rule will be presumptively unlawful. This will be the case even if the rule could also reasonably be interpreted not to restrict Section 7 rights.
If the employee can make this initial showing, the employer may prove that the rule advances legitimate and substantial business interests and that it is unable to advance that interest with a more narrowly tailored rule. The modified standard returns to a case-by-case approach that depends on the specific language of particular rules and the employer interests actually invoked to justify them. The stated goal is to ensure employers do not maintain unlawfully overbroad work rules that have a reasonable tendency to chill employees from exercising their statutory rights. In practice, though, previous Lutheran Heritage case law suggest employers may have a difficult time meeting the Board's affirmative defense.
Among others, the new standard will be applied to confidentiality, civility, social media, and anti-harassment policies, and it will be applied retroactively to all pending cases at any stage of litigation. It does not, however, disturb doctrines covering work rules that address union solicitation or distribution.
Ultimately, the Board’s latest decision places a heavy burden on employers. It heightens the restrictions on an employer’s ability to implement work rules regulating neutral workplace conduct. Once again, therefore, employers need to review the current language of their work rules to ensure compliance under the Board's ever-evolving standards.