In Stericyle, Inc., issued on August 2, 2023, the National Labor Relations Board (NLRB) discarded an earlier decision and established a new test for determining whether an employer’s work rule constitutes an unfair labor practice in violation of the National Labor Relations Act (NLRA). Under this new standard, the NLRB will presume a work rule to be unlawful if “an employee could reasonably interpret the rule” as restricting the employee’s right to engage in concerted activities protected by the NLRA. This is so even if the rule could be interpreted otherwise, and even if the rule is not intended or enforced to interfere with employee rights.
The employer can rebut the presumption of unlawfulness by proving that the rule is justified by “legitimate and substantial business interests” that cannot be advanced with a more narrowly tailored rule. This will likely be a difficult burden for employers to meet, and the NLRB did not provide much guidance as to what might be a legitimate and substantial business interest.
The new test can apply to any workplace policy that does not expressly restrict employees’ protected rights. However, some types of policies are more likely than others to be suspect, such as employee-civility codes, harassment-investigation rules, and confidentiality policies.
Recent NLRB Decisions Affecting the Non-Union Workplace
It is common for the NLRB to reverse itself each time a new administration takes office: a Democratic NLRB will reverse the prior Republican NLRB, which in turn had reversed the previous Democratic NLRB, and on and on. In this regard, the Stericycle decision appears to be just another expected swing of the pendulum.
Looked at from another perspective, however, Stericycle represents the third major action over the past six months in which the NLRB has further inserted itself into the non-union workplace:
- In McLaren Macomb, decided last February, the NLRB ruled that employers violate the NLRA when they include non-disparagement and confidentiality provisions in severance agreements offered to furloughed employees. Such agreements are as likely, or more likely, to be offered to non-union employees as they are to unionized workers.
- On May 30, the NLRB General Counsel issued a memorandum stating that non-competition agreements are unlawful because they chill employees from exercising their protected rights to engage in concerted activity. Again, non-competition agreements are commonly found in non-union environments.
- The Stericycle decision affects nearly every employer, union and non-union, that maintains an employee handbook or personnel policies.
Employers in the private sector, union and non-union, ought to be deliberate in developing and maintaining policies and agreements for employees. The NLRB has made clear that, at least until the next change of administrations, it will critically examine such policies and agreements – regardless of whether or how they are enforced. We will continue to monitor the developments related to NLRB decisions and are available to assist employers in navigating the most current requirements.