NLRB Creates New, Stricter Test For Evaluating Employee Handbook Rules

CATEGORY: Private Education Matters
CLIENT TYPE: Private Education
DATE: Aug 31, 2023

The National Labor Relations Board (Board) issued a decision this month in Stericycle, Inc., 372 NLRB No. 113 (2023), which evaluates challenges to employer work rules, such as policies in employee handbooks on recording and confidentiality.  Under Section 7 of the National Labor Relations Act (NLRA), employees have the right to unionize, to join together to advance their interests as employees, and to refrain from such activity.  It is unlawful for an employer to interfere with, restrain, or coerce employees in the exercise of their rights.

The Board’s previous precedent for evaluating work rules was a balancing test that weighed an employee’s rights under Section 7 of the NLRA against the employer’s legitimate justifications associated with the work rule.  The Board felt this balancing test gave too much weight to employer interests.

In Stericyle, the Board instead focused on making sure work rules do not chill employees’ exercise of their statutory rights for fear of discipline or discharge if they violate them.  The Board noted that there is an increased potential for intimidation because employees have an economic dependence on their employment and do not want to be terminated for breaking any workplace rules.  At the same time, employers have the right to maintain discipline and otherwise protect their legitimate and substantial business interests by evaluating employees’ workplace conduct.  The Board’s decision in Stericycle is meant to balance those competing interests, by allowing employers leeway to maintain rules of their own choosing that advance their business interests, while at the same time, making sure those rules are narrowly tailored to minimize or eliminate any coercive potential.

Under the Board’s new test, ambiguous work rules must be interpreted from the perspective an employee who wishes to engage in protected activity, but who also wishes to avoid the risk of being disciplined or discharged for violating this rule.  The test first requires a showing that an employee could reasonably interpret a rule to restrict or prohibit protected activity. If this showing is made, the work rule is presumptively unlawful.  This is true even if the employer did not intend for its rule to restrict employees’ rights.

If the rule is established as presumptively unlawful, the employer then has the burden to show the rule advances a legitimate and substantial business interest and the employer is unable to advance that interest with a more narrowly tailored rule.

The Board ruled that the evaluation of work rules should be done on a case-by-case basis, examining the specific language of the particular rules and the employer interests actually invoked to justify them.  The Board noted that the context and specific wording of the rules should also be considered. These rules apply retroactively to all pending cases.

Stericycle, Inc., 372 NLRB No. 113 (2023).

Note: This case is relevant for schools as they review their employee handbook policies.  LCW is prepared to assist schools in reviewing and revising their employee handbooks to ensure the rules are not restricting employee rights under the NLRB. 

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