The National Labor Relations Board swung to a Democratic majority after the 2020 election of President Joe Biden. That majority has been almost continually dismantling standards established by the Republican majority Board appointed by President Donald Trump.

Earlier this month, the Board announced a new legal standard for assessing whether an employer’s maintenance of a facially neutral workplace rule or policy is an unfair labor practice because it “interferes” with employee rights under the National Labor Relations Act. (For simplicity, this bulletin will refer to workplace rules or policies as “rules.”) As anticipated by most observers, the new standard swings the burden back to employers to justify many types of commonly used workplace rules – and possibly swings it so far that almost no rule has an absolute safe harbor going forward.

The new standard (Stericycle, Inc.)

Under the new standard, which the Board is applying retroactively, any employer workplace rule that could (not “would”) reasonably be interpreted by an employee as restricting or interfering with any sort of protected concerted activity or other employee rights protected by the NLRA is presumptively unlawful “interference.” This is so even if there exist more reasonable interpretations of the rule, and even if there is no evidence that the rule actually caused any “interference.”

As stated by the Board,

We clarify that the Board will interpret the rule from the perspective of an employee who is subject to the rule and economically dependent on the employer, and who also contemplates engaging in protected concerted activity. Consistent with this perspective, the employer’s intent in maintaining a rule is immaterial. Rather, if an employee could reasonably interpret the rule to have a coercive meaning, the General Counsel will carry her burden, even if a contrary, noncoercive interpretation of the rule is also reasonable.

(Emphasis added.)

Once the Board finds that the rule could have such a chilling effect, the burden of proof shifts to the employer to justify it. The employer may rebut the presumption of “interference” only by proving (1) that the rule advances a legitimate and substantial business interest and (2) that the employer is unable to advance that interest with a more narrowly tailored rule. If the employer is unable to prevail on both parts of the defense, then the workplace rule will be found unlawful.

The Stericycle decision overrules The Boeing Company, a 2017 Trump-era Board decision that took a more employer-friendly position. According to a statement of Chairman Lauren McFerran after Stericycle was issued,

Boeing gave too little consideration to the chilling effect that work rules can have on workers’ Section 7 rights. Under the new standard, the Board will carefully consider both the potential impact of work rules on employees and the interests that employers articulate in support of their rules. By requiring employers to narrowly tailor their rules to serve those interests, the Board will better support the policies of the National Labor Relations Act.

Democratic Members Gwynne A. Wilcox and David M. Prouty joined Democratic Chairman Lauren McFerran in the majority. Member Marvin E. Kaplan, the only Republican remaining on the Board, dissented.

What Stericycle may mean for employers (and employees)

Based on Board history, it’s up for debate whether the Board truly will “carefully consider” in any serious, objective fashion “the interests that employers articulate in support of their rules.”

First, nearly any type of employer workplace rule “could” reasonably be interpreted to restrict or interfere with some form of protected concerted activity. The forms of protected concerted activity are often limited only by the creativity of the worker, a labor union, or the minds of attorneys for the workers and unions. For example, even typical work attendance policies can be interpreted by employees to take time away from, or restrict and interfere with, employee engagement in protected concerted activity. If an employee is absent from work because of participation in a protest that is protected concerted activity, then the employee cannot lawfully be disciplined based on that absence, even under a neutral, consistently enforced attendance policy. The typical attendance policy does not expressly make exceptions for absences related to protected concerted activity, even assuming that it could.

The reality is that under the new standard, the General Counsel is arguably relieved from any burden of proving an essential element of “interference”: either proof of interference based on the evidence, or proof of interference based on a reasonable inference from the evidence.

Second, the recent Democratic-majority Boards have, in practice, demonstrated that they seldom see employer interests that they consider “legitimate” or “substantial.” Rather, they have focused almost exclusively on employee rights under the NLRA. For example, workplace rules plainly focused on achieving common employer and employee interests have been given little weight and regularly found to “interfere.” This includes rules relating to honesty, preserving confidentiality in sensitive investigations, protection of employees from sexual or other forms of harassment, protection of trademarks and other valuable employer goodwill, uniform and appearance rules, and protection of employees from abusive, disrespectful, uncivil, offensive, profane or obscene language and threatening conduct.

Third, in the real world there are generally multiple views and paths as to what workplace rules should exist, what they should say, and how they should be written. Thus, many if not all rules could arguably be more “narrowly tailored,” and it may be nearly impossible for an employer to demonstrate that its rule was as “narrowly tailored” as possible.

What should employers do?

How the Regions of the Board and the General Counsel will apply the Stericycle standard remains to be seen. Thus, employers are left with little practical guidance for issuing or revising their workplace rules and polices to maintain productive, employee-friendly, safe, and legally-sound workplaces.

It is nearly certain that the Regions and the General Counsel will aggressively put employers to the test to defend rules that are alleged to interfere with Section 7 rights. Employers can expect increased administrative and litigation costs as a result of the new standard. The Regions and the General Counsel can be expected to use the new standard and increased defense costs to extract settlements from employers, with requirements that the rules be revised or withdrawn, or that discipline issued under the rules be reversed and fully remedied.

The Board is applying the new standard retroactively, and unfair labor practice charges can reach back for a six-month limitations period. Thus, employers would be wise to promptly begin reviewing their employee handbooks, policy manuals, and policy statements and memoranda to assess how their rules might fare under the new standard. In some cases, it might be advisable to revise or rescind rules. Likewise, in some cases, disciplinary actions imposed through application of the rules may also warrant reconsideration and modification. We would expect the NLRB and the General Counsel to give particular scrutiny to rules focused on the following:

  • Workplace civility and respect
  • Access to the employer’s facility during non-working time, and loitering
  • Use of cameras or recording devices
  • Use of mobile phones or devices
  • Obscenity, profanity, and abusive language
  • Harassment
  • Conflict of interest
  • Outside employment (“moonlighting”)
  • Non-competition
  • Use of employer’s trademarks or logos
  • Leaving work without permission; rules prohibiting strikes, walkouts, or slowdowns
  • Posting without permission
  • Attendance
  • Non-disparagement
  • Confidentiality of investigations
  • No solicitation/distribution
  • Social media, internet, and communications systems and device use
  • Professionalism, attitude, and loyalty to employer
  • Interference with productivity or meetings
  • Uniforms and professional appearance

For rules that are being retained, employers should consider adding an explanation of the employer interest served by the rule and noting that the rule does not apply to protected concerted activity. Adding this language may not sway the current Board, but it could arguably help to (1) demonstrate that no employee could reasonably interpret the rule or policy as interfering with Section 7 rights, or (2) persuade a court not to enforce an adverse Board decision and order based on a strained interpretation of a workplace rule.

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