On Wednesday, August 2, 2023, the National Labor Relations Board (“the Board”) continued its retreat from many of the decisions issued by its Trump-era iteration. In Stericycle, Inc, 372 NLRB No. 113 (2023), the Board abandoned its decision in Boeing Co., 365 NLRB No. 154 (2017), which had announced a new business-friendly test for workplace rules, in favor of a framework derived by the Obama Board from Lutheran Heritage Village-Livonia, 343 NLRB No. 646 (2004).
Work rules, such as those addressing employee use of social media, interactions with co-workers, confidentiality, and use of employer’s logos, may be challenged as unlawfully infringing on employees’ rights under Section 7 of the National Labor Relations Act (“NLRA”). The 2017 Boeing framework balanced the nature and extent of a potential impact on those rights with the legitimate business justifications associated with the work rule. However, in Stericycle, Inc, the Board said that Boeing’s balancing test gives “too much weight to employer interests” by adopting overbroad work rules and “too little weight to the burden a work rule could impose on employees’ Section 7 rights.”
Instead, the Board modified the 2004 Lutheran Heritage standard, which primarily focused on NLRA protected rights, and clarified in the new standard how an employer’s interest is factored into the Board’s evaluation of the challenged rule.
Moving forward, the Board will interpret the work rule from the perspective of a “reasonable employee”– a layperson – and not a lawyer. If the employee could reasonably interpret the work rule to prohibit employees from engaging in protected activities, the work rule is presumptively unlawful. The employer may rebut the presumption by proving that 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.
The Board further opined that the new standard does not place an unreasonable burden on the employer, as employers are the drafters of their work rules, and should know what their employees’ rights are under the NLRA and factor that into the writing of their rules.
In his dissent, Member Marvin E. Kaplan argued that the majority’s opinion “fails to pay more than lip service to the required balancing of employees’ rights and employers’ legitimate interests,” because the new standard makes it “nearly impossible for employers to defend their rules in furtherance of legitimate employer interests” as it “inherently privileges employee rights” over the employers. (Emphasis in original).
How Stericycle is applied in practice, and how employee-friendly it turns out to be, of course, remains to be seen, but there is no question that its application will result in far more successful challenges to employer work rules than occurred under Boeing. Ballard Spahr regularly advises and reviews its clients’ workplace policies for compliance with not only the National Labor Relations Act, but with relevant state and federal laws.
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