On August 2, 2023, the National Labor Relations Board (NLRB) issued a highly-anticipated decision that sharply limits an employer’s ability to issue workplace rules and policies governing employee conduct in Stericycle, Inc. 372 NLRB No. 113 (2023). This decision applies to union and non-union employers alike and is a severe restriction on an employer’s ability to govern in its workplace.

The Board’s decision overruled case precedent in effect for the past six years, and prior to 2004, regarding promulgation and maintenance of workplace rules and policies, often contained in employee handbooks. The Board declared that any workplace rule that could “reasonably be interpreted” by employees as limiting protected activities is presumptively unlawful.

Protected activities include assisting other employees for “mutual aid or protection,” or employee rights to form, join, or assist a labor union.

The Board now deems a rule that “could” be interpreted to limit employee rights as unlawful, even if there is a reasonable alternative explanation that would be interpreted as lawfully protecting employee rights. Now, the rule is unlawful even if it has never been interpreted or applied in an unlawful manner.

Unlike the previous approach to evaluating employer work rules, the new test eliminates the standpoint of a “reasonable” employee interpretation and instead injects the viewpoint of an employee that is “economically dependent” on the employer. This seemingly extends to an employee who expresses mere fear or concern that running afoul of a work rule could result in discipline or discharge.

Once a work rule is found to be presumptively unlawful, an employer has the opportunity to defend its rule by establishing that it has a legitimate and substantial business interest and that there is no alternative way to advance that interest with a more narrowly tailored rule. The Board, however, did not define or explain how to tailor a rule to an employer’s legitimate interest.

This rule will have a debilitating impact on employers attempting to maintain discipline and order in the workplace, specifically regarding rules on workplace civility, employee access to the workplace during non-working hours and electronic recording.

While this decision is certain to be appealed, it is now the law governing all workplaces. In the meantime, all employers must immediately evaluate their work rules and policies and thoroughly review their employee handbooks. Employers should evaluate their legitimate interest in maintaining all rules and policies and evaluate whether there is a less restrictive manner in achieving the work rule.

Although the standard is very fluid, employers may expect significant challenges to their existing policies, even those that have been in place for years. There will be significant litigation in the near future regarding workplace rules and employers must be alert for employee challenges to workplace policies and rules.