As I continue to highlight some important employment law developments from this summer, the National Labor Relations Board (NLRB) caused a mild stir for employment law lawyers when it issued a decision in Stericycle, Inc.
This ruling introduces a fresh legal standard for assessing employers’ workplace policies and rules, with far-reaching implications for businesses — and not just those with unions. Employers of all types need to be vigilant and consider a review of their policies and employee handbooks to ensure compliance.
During the Trump administration, the NLRB employed a two-factor framework based on the Boeing decision. This framework assessed rules by examining their potential impact on employees’ rights under the National Labor Relations Act (NLRA) and the legitimate justifications behind the employer’s policy. Notably, an overbroad rule alone was insufficient to trigger a violation of the NLRA. The Boeing framework also categorized rules into three groups: Category 1 (always lawful), Category 2 (warranting scrutiny on a case-by-case basis), and Category 3 (always unlawful), generally favoring employers.
The Stericycle Board found fault with the previous standard, asserting that it allowed employers to create overreaching policies that could deter employees from exercising their Section 7 rights under the NLRA.
Under the new standard, an employer’s policies may run afoul of the NLRA if they have a “reasonable tendency” to interfere with employees’ Section 7 rights. This encompasses rights such as self-organization, joining labor organizations, and engaging in collective bargaining activities.
The Board emphasized that the old standard leaned too heavily in favor of employers, often overlooking employees’ economic dependency on their jobs.
The revised standard, inspired by the 2004 decision Lutheran Heritage Village-Livonia, provides a clearer framework, at least according to the NLRB. It establishes a burden-shifting system where the General Counsel must show that an employer’s policies have a “reasonable tendency” to chill employees’ rights. Employers can then rebut this presumption by demonstrating that the rule serves a legitimate and substantial business interest and that a more narrowly tailored rule wouldn’t suffice.
Here are some key considerations for employers in light of this pivotal decision:
- Policy Review: Evaluate your existing policies to ensure they align with the new “reasonable tendency” standard. Policies should be narrowly tailored and connected to legitimate business interests.
- Clarity Matters: Ensure that policy language is clear and free from ambiguity to minimize the risk of unintended misinterpretations.
- Retroactive Application: Importantly, the new standard applies retroactively to pending cases, so immediate compliance is crucial.
This NLRB decision ushers in a significant change in how workplace policies are evaluated, emphasizing the protection of employees’ rights. Employers should stay informed and consider seeking legal counsel to navigate this evolving legal landscape effectively. For more on the decision, check out this post from my colleagues on our sister blog, Employment Law Letter.