Employee Handbook Language Under Scrutiny

The NLRB is changing (again) the rules about work rules and handbooks

A recent, divided decision by the National Labor Relations Board (NLRB, or “the Board”) has once again changed the standard of review for employee handbook policies and how those policies affect an employee’s “right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.”

In Stericycle, Inc., 372 NLRB No. 113 (Aug. 2, 2023), the Board held that employers violate the National Labor Relations Act (NLRA), Section 8(a)(1), when issuing rules that appear neutral on the surface — such as a no-camera policy in the workplace — that a “reasonable employee” could believe infringes on their Section 7 rights.  

It is going to be difficult for employers to refute that presumption. How did we get here? 

The philosophical tug of war 

The Board has been changing its mind for decades about how it should be assessing work rules and their potential effect on Section 7 rights. The Stericycle ruling replaces the Boeing ruling, issued in 2017, and Boeing replaced the Lutheran Heritage Village-Livonia ruling, issued in 2004. These rulings reflect a philosophical tug-of-war between a more predictable, categorical approach to assessment and a more subjective, case-by-case process. 

In Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), the Board found that — even if a rule itself did not expressly prohibit or limit protected activities — it could be unlawful if: 

1. Employees would reasonably construe the language of the rule to prohibit Section 7 activity;
2. The rule was promulgated in response to union activity; or
3. The rule has been applied to restrict the exercise of Section 7 rights.

Consistent application of the first assessment category in this testing methodology is quite difficult because it involves the analysis of an employee’s perspective and reaction to a particular work rule. When would a workplace rule violate Section 7 activity (i.e., the right to engage in concerted activity… for mutual aid or protection)? Could standard workplace rules — like those about civility and confidentiality — circumscribe protected speech?

Seeking some clarity, Boeing Co., 365 NLRB No. 154 (2017), and subsequent Board General Counsel Memorandum GC 18-04 established a three-category system for evaluating the legality of a work rule under Section 8(a) (1):  

• Universally legal,
• Conditionally legal, and
• Uniformly illegal.

Boeing also required the Board, when examining a “facially neutral” work rule, to evaluate: “(i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.” 

In Stericycle, the Board has restored the analytical framework of Lutheran Heritage Village-Livonia and arguably managed to inject even a higher level of uncertainty into the analysis. Under Stericycle, to invalidate a rule or policy the Board must only conclude that the challenged employment policy has a “reasonable tendency to chill” employees from exercising their Section 7 rights. And the proof of this “chilling effect” is based on the employee’s perspective. An employer may only refute a presumption of infringement by proving that the rule advances a legitimate and substantial business interest and that the employer cannot advance that interest with a narrower rule.  

Handbook revisions

The ruling applies to all workplaces, both union and nonunion. All employers should scrutinize their employee handbooks in light of this new standard. Policies about confidentiality and workplace communication need special attention. Narrow and sharpen any ambiguous policies and those that could be interpreted too broadly.

For example, general civility and communication rules that ban “controversial statements or conduct” will probably become a target of the NLRB in the months ahead — mainly because such statements aren’t “narrowly tailored” enough. Employers are also advised to adopt a policy stating, “no rule adopted by the employer should be interpreted as restricting the employee’s Section 7 rights” — and insert such disclaimers into any policy that could be interpreted as restricting such activity.

Given its broad language, the Stericycle ruling calls into question existing social media, non-disparagement, confidentiality, photography and recording, appearance and dress code, anti-harassment, and many other standard workplace policies.

Need help?  

While it’s still unclear exactly how the NLRB will ultimately apply this new test, employers can get ahead of the curve by identifying and addressing potentially ambiguous policies before they stir up litigation. Don’t hesitate to contact Orr & Reno if you would like assistance reviewing and updating your employee handbook.  

About the authors: Steven L. Winer & Elizabeth C. Velez

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