Employee rights under the NLRA

Section 7 of the NLRA guarantees employees the right to self-organization, to form and/or join a union, to bargain collectively, to engage in concerted activity, and the right to refrain from all such activities. Section 8(a)(1) prohibits employers from interfering with, restraining, or coercing their employees in the exercise of Section 7 rights. For example, threatening employees with adverse consequences, incentivizing them to refrain from exercising such rights, or promulgating or enforcing workplace rules that inhibit employees from exercising their rights, are all alleged violations of Section 8(a)(1).

Workplace rules and the NLRB – A recent history

Workplace rules, especially ones provided to employees in handbooks and employee policies, have long been in the crosshairs of the NLRB. Over the years, the standards for assessing policies, as well as which policies are considered permissible, have changed and been redefined depending on the makeup of the NLRB.

For instance, in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), the Board held that maintaining facially neutral work rules that do not explicitly restrict employees’ rights to engage in Section 7 activities violates Section 8(a)(1). The Board noted that employees could “reasonably construe” facially neutral rules as prohibiting them from exercising their Section 7 rights. Lutheran Heritage involved a workplace civility rule. During the Obama administration in 2015, the Board expanded its applicability to additional types of workplace rules. The General Counsel of the NLRB at that time issued a memorandum outlining such examples and applications. In 2017, during the Trump administration, this memorandum was withdrawn.

The withdrawal of the memorandum was a precursor to the Trump-era Board officially overturning Lutheran Heritage in Boeing Co., 365 NLRB No. 154 (2017). Boeing established a new, more employer-friendly standard for assessing whether workplace rules violate Section 8(a)(1). Specifically, when reviewing a facially neutral rule that would potentially interfere with Section 7 rights, the Board decided to evaluate the nature and extent of the impact and the legitimate justification associated with the rule. As a result of the Boeing decision, three categories of rules were prescribed.

Category 1 included rules that were always lawful because, when reasonably interpreted, such rules did not interfere with NLRA rights. For example, rules prohibiting posting photos of co-workers without their written consent. Category 1 also included rules where the justifications for the rule outweighed the potential adverse impacts, such as rules prohibiting the use of recording devices in workplaces and facilities.

Category 2 included rules that required individualized scrutiny, weighing the rule’s justifications against its adverse impacts. For example, rules requiring employees to maintain confidentiality of non-public information, such as names and contact information of other employees, were included in this category.

Finally, Category 3 included rules that are always unlawful. For example, rules prohibiting employees from discussing wages or requiring employees to keep employee handbook contents confidential.

A subsequent decision, LA Specialty Produce Co., 368 NLRB No. 93 (2019), clarified Boeing. There, the Board held: (i) a rule should be interpreted from the perspective of a reasonable employee, not an employee viewing the rule through the prism of the NLRA; and (ii) the General Counsel has the initial burden to demonstrate the rule has a potential chilling effect on Section 7 rights.

Stericycle and the new landscape

In a divided decision, the current Board in Stericycle did away with the Trump-era Boeing standard, bringing back a modified Lutheran Heritage standard. The Board found that the “primary problem” with the Boeing standard was that it allowed “employers to adopt overbroad work rules that chill employees’ exercise of their rights under Section 7.” The Board noted that employees tend to interpret ambiguous rules as prohibiting “statutorily protected activities” and may refrain from engaging in protected behavior to avoid any risk of violating such rules. This tends to happen, the Board stated, because of employees’ economic dependency on their employers and their fear of being discharged or disciplined for violating any rules. That anxiety, in turn, results in employees interpreting ambiguous rules to be more restrictive.

The Stericycle standard shifts the burden onto the employer after the General Counsel shows that a challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights. This is viewed from the perspective of an employee subject to the rule, economically dependent on the employer, and who also contemplates engaging in protected activity. If the General Counsel meets that burden, the workplace rule is presumptively unlawful. The employer gets a chance to rebut the presumption by proving the 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 is successful, the rule will be deemed lawful. 

The Board’s decision is clear that Boeing and its progeny, including decisions finding work rules to be categorically valid under the previous Boeing standard, are no longer good law. The Board unfortunately did not provide examples of rules that would violate Section 8(a)(1) under its new standard. The Board also did not elaborate on what it considers a “legitimate and substantial” interest or when a work rule is sufficiently “narrowly tailored.” Thus, there is significant uneasiness among employers about how far-reaching the Stericycle decision is.

In what seems to be one of the first applications of the rule, an administrative law judge (ALJ) recently found a Starbucks’ civility rule to violate Section 8(a)(1). The rule prohibited “vulgar or profane language” and required employees to communicate with other employees and customers “in a professional and respectful manner at all times.” The ALJ held that the terms “respectful” and “professional” are “overly broad” and “vague” and can “reasonably be construed to intrude on Section 7 communications.” In fact, managers had applied the rule to restrict protected conduct. The ALJ recognized that Starbucks had a legitimate and substantial business interest in “maintaining basic standards of civility” in the workplace. However, without explanation, the ALJ determined that the company did not carry its burden to show that this interest could not be advanced with a “more narrowly tailored rule.” 

Next steps

As of now, employers should understand the new NLRB landscape related to employee policies and rules. Employers must be aware that there are increased risks using certain language in employee handbooks and workplace rules. Although we do not recommend a wholesale rewrite of employment policies and handbooks, we recommend assessing the potential risk and determining whether your company has any policies that should be re-drafted in view of Stericycle. Please consult with any Hogan Lovells employment lawyer for advice on these and any other labor matters regardless of whether your company is unionized or not.