NLRB Adopts Strict New Standard for Assessing Lawfulness of Workplace Rules

By Alicia Ward, Peter Moser, Jeffrey Hirsch   August 11, 2023

Last week, the National Labor Relations Board (NLRB) issued its long-anticipated decision in Stericycle, Inc., heralding a return to more intense scrutiny of employer handbook policies. Stericycle is the latest in a string of pro-employee NLRB decisions, reflective of the NLRB’s current political make-up. The Stericycle decision overturned prior case law issued during the Trump administration.

In its August 2, 2023 decision, the NLRB announced a new legal standard to determine whether work rules (such as those in Stericycle, which addressed personal conduct, conflicts of interest, and confidentiality of harassment complaints) violate the National Labor Relations Act (NLRA). Under the new standard, if an employee could reasonably interpret a work rule to have a coercive meaning that would limit the right to engage in protected concerted activity under the NLRA, then the work rule is presumptively unlawful. It does not matter whether any employee actually did interpret the policy as being coercive, or whether there was actually any protected activity being engaged in or contemplated, or even whether there exist other more reasonable non-coercive interpretations of the work rule.

When this presumption of unlawfulness is met, the employer then has an opportunity to rebut the presumption by establishing that the workplace rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule. If the employer proves its defense, then the workplace rule will be found lawful.

Unfortunately, under this new standard even commonplace handbook policies having no intended connection to labor law could be found unlawful. It remains to be seen whether the Stericycle decision and its reasoning will withstand Supreme Court scrutiny on appeal, and how quickly and extensively the NLRB’s position will change in the event of a political change in administration. HRW will continue to monitor new developments regarding Stericycle.

In the meantime, there is no time like the present for employers to review their policies, and to make necessary changes to maximize the chance of surviving NLRB scrutiny. Generally, employers will want to avoid policy language that unintentionally suggests even a hypothetical or attenuated infringement on NLRA rights, and use policy language that confirms the legitimate and substantial business interests the policies are seeking to protect.

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For Questions / More Information

To discuss how the Stericycle decision affects your organization, and for assistance in reviewing and revising your workplace policies, please contact your HRW attorney or:

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