The National Labor Relations Board’s (NLRB or the Board) decision in Stericycle, Inc. and Teamsters Local 628, 372 NLRB No. 113 (2023) adopts a more restrictive standard for facially neutral work rules for both union and non-union employers to comply with to avoid violating Section 7 of the National Labor Relations Act (NLRA).
Employers should evaluate their workplace rules in light of the new standard to determine risk for NLRA violations.
What Is Section 7 and Why Does It Matter To Non-Union Employers?
Section 7 protects employees’ rights to self-organize, to bargain collectively, and to engage in concerted activity, including activities like talking openly about pay and benefits, circulating a petition seeking better hours, participating in a collective refusal to work in unsafe conditions, and joining with co-workers to talk directly to the employer, an agency, or the media about problems in the workplace. Work rules, including facially neutral work rules, that interfere with, restrain, or coerce employees in exercising these rights are unfair labor practices under the NLRA.
Because Section 7 grants rights to employees in both unionized and non-unionized workforces, the decision will apply to most U.S. employers, including federal contractors.
Section 7 does not apply to most managers and supervisors, public employees, independent contractors, or certain agricultural employees.
How Are Work Rules Analyzed Under Stericycle?
Under Stericycle, any workplace rule or policy that reasonably could be interpreted to limit or interfere with employee Section 7 rights is considered “presumptively unlawful.”
Employer policies and rules will be considered from the perspective of an employee who contemplates engaging in protected concerted activity and is economically dependent on the employer. A rule would be presumptively unlawful “if an employee could reasonably interpret the rule to have a coercive meaning . . . even if a contrary, noncoercive interpretation of the rule is also reasonable.” An employer’s “intent” in adopting or implementing the rule is no longer a consideration.
The employer may rebut the presumption of unlawfulness by “proving that [the rule] advances legitimate and substantial business interests that cannot be achieved by a more narrowly tailored rule.”
How Does Stericycle Differ From The Rule In Place Previously?
The Stericycle decision overruled the more flexible standard adopted in Boeing Co. (2017), later revised in LA Specialty Produce Co. (2019), which evaluated work rules by balancing the nature and extent of the potential impact on NLRA rights and the legitimate justifications for the rule. Under Boeing, work rules were classified into categories—always lawful; sometimes lawful and subject to individual scrutiny; and never lawful—intended to provide employers with clarity.
The Stericycle standard is a modified version of the standard that was in place prior to Boeing (Lutheran Heritage Village-Livonia (2004)), which found rules unlawful if an employee could reasonably interpret a rule to restrict Section 7 rights.
Takeaways for Employers
Employers should review their workplace rules and employee handbooks in light of the new standard adopted in Stericycle. Policies and rules should be reasonably tailored and tied to legitimate business interests, to ensure that policies are not inadvertently seen as curtailing employee rights to engage in concerted activities.
Policies that require prompt attention under the new standard include non-disparagement or “civility” rules, and rules regarding the confidentiality of employee investigations or harassment complaints, both of which may be misinterpreted by employees as restricting conversations about workplace conditions with coworkers or with union representatives.
Some additional policies or rules that may be impacted are:
For any questions about how the new standard impacts your business, please contact the authors of this alert or the RJO attorney with whom you regularly work.