A New Chapter
By John S. Gannon, Esq.
Last month, the National Labor Relations Board (NLRB) issued a decision altering the standard used to determine whether employer handbook policies and work rules infringe on employee rights in the workplace. The NLRB will now use an employee-friendly test that asks whether workers could reasonably interpret the policy or rule as one that restricts rights protected under the National Labor Relations Act (NLRA), such as discussing wages and working conditions, or forming unions.
Put in plain, non-legalese terms, the decision significantly increases the likelihood that one or more of your handbook policies are unlawful in the eyes of the NLRB. It also applies to all private-sector employers — including those without a union presence. Violations can lead to federal penalties, lawsuits, and more. So now is as good a time as ever to review your existing employee handbooks and work rules in order to ensure compliance.
Over the years, the NLRB has used a medley of tests when reviewing employee-handbook provisions to determine if a violation exists. Traditionally, the test shifts from employee/union-friendly to employer/management-friendly depending on whether the majority of board members are appointed by a Democrat or Republican president.
“Put in plain, non-legalese terms, the decision significantly increases the likelihood that one or more of your handbook policies are unlawful in the eyes of the NLRB. It also applies to all private-sector employers — including those without a union presence.”
For example, in 2015, the ‘Obama board’ issued decisions and guidance suggesting that common and well-accepted work rules on topics like confidentiality and civility in the workplace (like rules prohibiting ‘picking fights’ and ‘insulting’ co-workers) were problematic. Then, in 2017, under the ‘Trump board,’ the NLRB essentially undid this by establishing an employer-friendly standard that “overruled past cases in which the board held that employers violated the NLRA by maintaining rules requiring employees to foster ‘harmonious interactions and relationships’ or to maintain basic standards of civility in the workplace.”
The Work-rules Saga Continues
On Aug. 2, the NLRB issued its latest decision in this long-running saga on how to evaluate whether employee handbook provisions and work rules are unlawful. In a case called Stericycle Inc., the board, which has tilted toward the left under President Biden, adopted a new test to use when workplace rules and policies are challenged on the grounds that they interfere with or restrict employees’ rights to join together and improve terms and conditions of employment. These rights are often referred to as ‘Section 7 rights,’ as they are protected by Section 7 of the National Labor Relations Act.
The Stericycle decision expressly overrules the previous standard set forth by the Trump board in 2017, and (not surprisingly) was decided on a 3-1 basis, with the lone Republican board member (Marvin Kaplan) dissenting.
In Stericycle Inc., the majority held that the prior standard established by the Republican-dominated Trump board permitted employers to adopt overly broad work rules that chill employees’ exercise of their Section 7 rights. Under the new Stericycle standard, employers can maintain workplace rules only if they are narrowly tailored to “advance legitimate and substantial business interests” and minimize the risks of interfering with workers’ Section 7 rights (i.e., the right to act together to improve the workplace).
Similar to the old test under the Obama board, employer rules and policies can (and likely will) be ruled unlawful if the NLRB believes that an employee can reasonably interpret them as restricting their Section 7 rights. These put the following types of policies at risk:
• Restricting employee use of social-media platforms and communication;
• Demanding confidentiality of investigations and other workplace discussions;
• Restricting the use of cameras or recording devices in the workplace;
• Prohibiting negative comments or limiting an employee’s right to criticize the employer’s management, products, or services;
• Promoting civility in the workplace and/or prohibiting insubordination; and
• Restricting use of company communication tools such as email, Zoom, and Teams.
Under the Stericycle decision, an employer policy or rule is presumptively unlawful if an employee could reasonably interpret it to limits Section 7 rights. For example, if an employee reads a work rule requiring confidentiality of investigations as limiting their rights to discuss work-related issues with co-workers, it will likely be viewed as presumptively unlawful. The employer can then rebut that presumption by proving that (1) the work rule advances a legitimate and substantial business interest; and (2) the employer cannot advance that interest with a more narrowly tailored rule.
The first prong of this test does not seem particularly difficult for employers to establish, as most work rules presumably are put in place to advance a business-based interest. However, succeeding on the second prong will not be as simple. How often can it be argued that the goal of a work rule could be accomplished in a narrower fashion?
Consider a rule that prohibits workers from using video devices in the workplace. The business-based justification may be as simple as “we want to protect confidential information about how we do business from competitors.” This seems legitimate, to me, at least. But, moving to the second prong, could this goal be achieved by requiring employees to sign a non-disclosure agreement, or something of the like, that prohibits sharing confidential information or trade secrets in public domains? Probably.
As such, a handbook policy penalizing employees for taking unauthorized videos at work is probably invalid under the current ‘Biden board’ test of work rules.
Takeaways and What’s Next
In light of the new standard set forth by the NLRB in Stericycle Inc., both union and non-union businesses should expect more challenges to their work rules on Section 7 grounds. Employers and human-resources professionals should review their employee handbooks and work rules to make sure policies comply with the new NLRB standard. Businesses are also encouraged to consult with experienced labor and employment counsel, and keep an eye out for future updates.
John Gannon is a partner with the Springfield-based law firm Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including family and medical leave laws, the Americans with Disabilities Act, the Fair Labor Standards Act, and the Occupational Health and Safety Act; (413) 737-4753; [email protected]